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Insitu Settles for $25M After Claims It Sold Drones With Used Parts to US Military

Insitu, a Boeing-owned aerial drone manufacturer in Columbia River, has agreed to pay $25 million to settle allegations that its military drones were made with used parts instead of new materials.

Between 2009 and 2017, the company was awarded a total of seven contracts to supply drones for the United States Special Operations Command and the Department of the Navy. Insitu promised to use new parts for the drones but a former executive claims the company used recycled and rehabilitated pieces instead.

“Taxpayers deserve to get what they paid for — especially in significant no-bid military contracts,” said US Attorney Brian Moran in a statement released on Tuesday. “Cases such as this one should be seen as a warning to defense contractors that false claims have no place in military purchasing.”

Insitu Whistleblower

R. O’Hara, a former Insitu executive, filed the original complaint in federal court in 2015. Four years prior, Boeing Corporate sent O’Hara to Insitu to assist in the intricate compliance processes associated with government contracts but prevented him from uncovering important pricing data to validate said contracts.

O’Hara told The Seattle Times that he filed complaints to Boeing’s ethics hotline against the alleged accounting misconduct back in 2014 and was fired soon after.

The lawsuit was filed under the qui tam or whistleblower provisions of the False Claims Act which allow individuals to sue on behalf of the government for false claims and to share in any recovery this will yield. This act also allows the government to take over and, seeing as the case has been resolved, O’Hara is set to receive $4.6 million from the settlement.

Meanwhile, the drone manufacturer said that it has fully cooperated with the investigation. The company said, “At all times, Insitu provided superior ISR services to the Navy and Special Operations Command, a fact the government does not dispute. Insitu continues to provide mission-ready systems and supports the nation’s warfighters by providing world-class service.”

Acting Assistant Attorney General of the Justice Department’s Civil Division Jeffrey Bossert Clark reminded private companies seeking to work with the federal government that honesty is still the best policy.

“We expect companies that seek to do business with the government to provide complete and accurate information so contract prices can be negotiated on a level playing field. This settlement demonstrates the Justice Department’s commitment to take appropriate action when it determines that taxpayer dollars have been misused,” he said.  

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