A subsidiary of BAE systems has been charged by the US Department of Justice (DoJ) for overcharging $20 million in a contract to build 20,000 military trucks for the US Army, Reuters Reported Saturday.
Texas based subsidiary, BAE Systems Tactical Systems LP is accused of inflating the cost of parts and materials during contract negotiations with the US army, the department of Justice said on Friday.
BAE Systems however has denied the charges. "We intend to vigorously defend our position," spokesman Neil Franz said in a press statement.
The dispute is before the Armed Services Board of Contract Appeals. BAE has violated the False Claims Act in 2008 by knowingly submitting inaccurate costs which includes hiding of lower price estimates for 40 parts, according to the prosecutors.
As per the lawsuit, the contract’s overall bill would have been $20 million lower if BAE had disclosed the lower quotes.
"The conduct alleged in this complaint is akin to charging $600 for a hammer," Reuters quoted US Attorney Barbara McQuade of the Eastern District of Michigan, one of the prosecutors in the case as saying.