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An ITT Inc. unit has agreed to pay $11 million to settle False Claims Act allegations that it supplied inadequately tested electrical connectors to the military, with a whistleblower to be awarded $2.1 million in the matter, the U.S. Department of Justice said Tuesday.
The Justice Department said in its statement that Irvine, California-based ITT Cannon sold the untested connectors both directly to the government and through distributors and other government contractors that incorporated them into technology and equipment sold to their government.
The Justice Department alleged that from September 2008 to March 21, 2017, ITT Cannon did not conduct the required periodic testing on six models of electrical connectors.
It said in December 2010, after the government learned the testing had not been conducted, ITT Cannon promised it would conduct remedial testing and report the result to the government.
Then in February 2011, ITT experienced several failures in its remedial testing. But instead of immediately disclosing these failures, it represented to the government it was merely behind in the remedial testing, the Justice Department said.
The federal Defense Logistics Agency, which is the U.S. Department of Defense's combat logistics support agency, issued a March 2017 order stopping shipment of the six connectors, the statement said.
The Justice Department said the settlement resolves allegations in a whistleblower lawsuit filed by Ralph Tatgenhorst, the former regional quality manager at ITT’s Santa Ana, California, facility, who will receive $2,090,000 as his share of the settlement amount.
“Failure to comply with testing requirements undermines the integrity of essential government equipment and technology, and thereby reduces its durability and reliability,” Jody Hunt, assistant attorney general for the Department of Justice’s Civil Division, said in the statement.
“This settlement demonstrates that we will hold contractors accountable when they fail to deliver what they were paid to deliver.”
ITT Cannon did not immediately respond to a request for comment.
Last month, an American International Group Inc. unit prevailed in coverage litigation with Office Depot Inc. in a whistleblower case it had previously successfully appealed to a federal appeals court.
A U.S. Department of Justice memo, revealed last week, that guides its attorneys on when they should seek dismissal of False Claims Act whistleblower cases could lead to a decline in the soaring number of lawsuits filed, although its ultimate impact remains unclear, observers say.