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The Justice Department has announced that Lockheed Martin has agreed to settle allegations of inflating contract prices for the F-35 fighter jet.
Some shit you should know before you read: Back in 2013 to 2015, the Department of Justice (DOJ) alleged that Lockheed Martin engaged in a scheme to inflate contract prices for the F-35 fighter jet by knowingly withholding critical cost and pricing data from the Pentagon’s F-35 Joint Program Office (JPO). According to the DOJ, Lockheed had access to supplier cost information that should have been disclosed under the Truth in Negotiations Act (TINA), a law requiring contractors in sole-source, non-competitive deals to provide accurate and complete pricing data to prevent government overcharges. Instead, Lockheed allegedly failed to share lower cost estimates from its suppliers, leading to inflated pricing proposals that resulted in the Pentagon awarding five contracts at higher-than-necessary prices for the F-35’s production and sustainment. The DOJ claimed that Lockheed’s actions misled government negotiators, ultimately causing the US military and taxpayers to overpay for the fighter jet program. The allegations were initially brought to light through a whistleblower lawsuit filed in East Texas, which prompted federal authorities to investigate and file a civil complaint against the defense contractor.
What’s going on now: In an announcement, the DOJ confirmed that Lockheed Martin has agreed to pay $29.74 million to settle allegations that it knowingly withheld pricing data and inflated contract costs for the F-35 fighter jet program. This payment comes in addition to the $11.3 million the company had previously repaid to the Department of Defense (DOD) for similar undisclosed cost issues. While Lockheed Martin did not admit to any wrongdoing, the settlement resolves allegations under the False Claims Act and the TINA act.
In a statement, Acting Assistant Attorney General Brett A. Shumate said, “Those who do business with the government must do so fairly and honestly. We will pursue contractors that knowingly misuse taxpayer funds.” Acting US Attorney Abe McGlothin, Jr., for the Eastern District of Texas, also stressed the importance of transparency, stating, “The United States relies on contractors such as Lockheed Martin to provide accurate, complete, and current information, including pricing data, when negotiating contracts with the government. If a contractor fails to do so, and that failure affects the value of its contract with the government, the Eastern District of Texas will take steps to ensure that the contractor is held accountable.”
This all comes as the F-35 program continues to face intense scrutiny for being massively over budget and plagued with delays. Initially projected to cost far less, the program’s total lifecycle cost has ballooned to an estimated $1.7 trillion, making it the most expensive weapons system in US history. Lawmakers from both parties have repeatedly criticized the program’s soaring costs and persistent technical issues, with some even arguing that the Pentagon should cut its losses and scrap the jet altogether. Senator Chuck Grassley (R-IA) has called the F-35 a “rathole” for taxpayer money, while Congressman Adam Smith (D-WA), former chair of the House Armed Services Committee, has argued that the military should shift focus away from the F-35 due to its excessive costs and maintenance problems.
