JUSTICE DEPARTMENT ACCUSES NSS OF MISCHARGING TANKER COSTS

JUSTICE DEPARTMENT ACCUSES NSS OF MISCHARGING TANKER COSTS    The U.S. Justice Department has filed suit against Newport News Shipbuilding Inc. in Newport News, Va., alleging the shipbuilder improperly charged the Navy for research and development costs for double-hull tankers that Newport News was building for commercial customers from 1994 to 1999.
   The government alleges that Newport News charged the Navy more than $72 million “related to the design and development of commercial tankers,” costs that were “passed through as overhead on major Navy shipbuilding contracts,” a Justice Department statement said.
   The suit claims that Newport News continued mischarging “even after being warned in 1995 by senior staff and by its outside consultant, Arthur Andersen & Co.,” that such practices could make Newport News “subject to suit under the False Claims Act.”
   The U.S. government, under the False Claims Act, may recover three times the amount of its losses, plus civil penalties.
   The Justice Department’s suit [Civil No. 1:03-CV-142] “illustrates the determination of the United States to recover funds inappropriately billed on defense contracts,” said Robert D. McCallum Jr., assistant attorney general for Justice’s civil division.
   Newport News Shipbuilding has been a wholly owned subsidiary of Northrop Grumman Corp. since November 2001.