PORTLAND, Ore. — Aerial drone manufacturer Insitu will pay $25 million to settle allegations that its military drones were outfitted with used components instead of new ones.
U.S. attorney Brian Moran said cases such as this one should be seen as a warning to defense contractors that false claims have no place in military purchasing. Moran announced the settlement Tuesday, The Oregonian/OregonLive reported.
The allegations originated with a former Insitu manager, D R O’Hara, who filed a whistleblower complaint in federal court and will receive $4.6 million of the settlement. Investigators, who took over the case under provisions of the whistleblower law, allege that Insitu billed the military for new parts and components but actually used less expensive recycled and refurbished parts.
Insitu said it cooperated with the investigation and that its disclosures to the government met all requirements.
“At all times, Insitu provided superior ISR services to the Navy and Special Operations Command, a fact the government does not dispute,” the company said in a statement. “Insitu continues to provide mission-ready systems and supports the nation’s warfighters by providing world-class service.”
Owned by Boeing, Insitu is based in the town of Bingen, Washington, along the Columbia River. It employs about 1,500 people with two-thirds of them in the Bingen and Hood River, Oregon, area.
