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Insitu to pay USD25 million to settle UAV overcharge case

Boeing’s Insitu company has agreed to pay USD25 million to settle allegations it overcharged the US military to supply and operate ScanEagle unmanned aerial vehicles (UAVs) for intelligence, surveillance, and reconnaissance (ISR) missions, the US Justice Department announced on 12 January.

Insitu’s ScanEagle UAV. (Boeing)

Insitu’s ScanEagle UAV. (Boeing)

According to the department, Insitu “knowingly induced” the US Navy Department and US Special Operations Command (SOCOM) to award seven no-bid contracts at “inflated prices” from 2009 to 2017. While Insitu told the two agencies it was going to use new parts to conduct its work, it actually used less expensive “recycled, refurbished, reconditioned, and/or reconfigured parts” instead, violating the federal False Claims Act, the department alleged.

“Taxpayers deserve to get what they paid for – especially in significant no-bid military contracts,” said Brian Moran, US attorney for the Western District of Washington state. “Cases such as this one should be seen as a warning to defence contractors that false claims have no place in military purchasing.”

Insitu denied the allegations but said the settlement “resolves a complex case”. The company insisted that the information it disclosed to the US Navy and SOCOM “satisfied all requirements”. It also said it provided “superior ISR services” to both entities “at all times”.

The allegations surfaced in a lawsuit that former Insitu executive D R O’Hara filed in federal court in Seattle, Washington, in 2015, the department said. While the federal government ultimately took over the case, whistleblower law entitles O’Hara to receive USD4.6 million of the recovered funds.

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