The details of a whistleblower lawsuit against defense contractor Navistar have been unsealed, accusing the company of bilking nearly $1.3 billion from the government.
In 2013, a former Navistar Defense employee accused the company of fraudulent and inflated pricing for the mine-resistant, ambush-protected vehicles it sold to the U.S. Marine Corps.
The MRAPs as they're commonly called were built via several contracts from 2007-2012. About 4,000 were built, with their finishing done at Navistar's plant in West Point.
The whistleblower, Duquoin Burgess, filed suit in 2013, claiming the company violated the False Claims Act by forging invoices, catalog prices and other information used in negotiations to sell the MRAPs.
The case remained seal until recently, and the U.S. government intervened in the case Dec. 3 with its own filing, which is sealed.
Burgess claims top company executives were aware of the fraud.
Navistar said it will respond to the charges. In the meantime, it told Bloomberg News, “We believe our pricing was fair, reasonable and competitive, and we are disappointed the government has chosen to intervene in this matter. The company intends to defend itself as necessary and appropriate."
“There is nothing more important than the safety of those serving our country, and we take tremendous pride in the vehicles we manufacture," the company added. “We value our long-standing partnership with the military and are proud to provide safe, reliable military vehicles of superior quality.
According to Defense News, over the course of the MRAP contract’s five-year life cycle, the government paid Navistar approximately $9 billion for its MaxxPro MRAPs, according to the complaint, but a conservative estimate alleges that roughly $1.28 billion of that was based on fraud. According to the complaint, the government could be entitled to up to three times the actual damages suffered if the judge finds Navistar guilty of fraudulent conduct – a total of $3.84 billion.
In 2007, International Military and Government, a subsidiary of Navistar, won contracts worth more than $2.7 billion to build almost 4,500 MaxxPro MRAPs. The biggest deal – a $1.1 billion contract to build 1,500 MaxxPro MRAPs for the U.S. Marine Corps – was announced in December of that year.
The MaxxPro MRAP was designed with a V-shaped frame that better deflects explosions caused by mines and roadside bombs, which were responsible for most of the U.S. troop casualties in Iraq. The West Point facility handled the assembly and armor plating of the MaxxPro. The truck chassis was built in Garland, Texas.
The West Point plant at it peak employed more than 1,000 workers.