ULA settles lawsuit that said it defrauded government of $90 million
ULA has settled a lawsuit with a whistleblower who claimed the company had defrauded the federal government of at least $90 million by overbilling employee work hours.
Unlike the commercial marketplace where prices of goods and services are determined by market forces including competition, sellers in the aerospace industry face little or no competition and contract pricing is based largely on a contractor’s estimated costs, the lawsuit says.
ULA charged the government tens of millions of dollars for work that was never performed and inflated the estimated labor hours including the time required to buy parts and materials from vendors, the lawsuit says.
ULA retaliated against Scott [the whistleblower] by forcing him out of the company after he revealed the alleged illegal activities. ULA officials placed a camera above his desk, monitored and questioned his cell phone and computer use, and suggested he violated the law or engaged in improper bidding practices himself, the lawsuit says.
ULA used a system called the Keith Crohn model that creates a grid using the cost of equipment to reach an employee cost. A labor value was placed on the grid for every item ordered through the company’s purchasing department. For example, any item that cost between $1 and $1,000 would be assigned a labor value of 8 hours. It didn’t matter what part it was, the lawsuit said. The U.S. bans arbitrary cost estimates when actual data is available that establishes the cost.
The first paragraph of the quote above actually describes the bad deal that the Air Force made with ULA back in the early 2000s, giving the company a monopoly on launches while subsidizing it to the tune of $1 billion per year. That deal is now dead, and ULA is instead forced to compete with SpaceX (and soon others I hope) for launch contracts. Not surprisingly, their prices have dropped considerably.
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ULA has settled a lawsuit with a whistleblower who claimed the company had defrauded the federal government of at least $90 million by overbilling employee work hours.
Unlike the commercial marketplace where prices of goods and services are determined by market forces including competition, sellers in the aerospace industry face little or no competition and contract pricing is based largely on a contractor’s estimated costs, the lawsuit says.
ULA charged the government tens of millions of dollars for work that was never performed and inflated the estimated labor hours including the time required to buy parts and materials from vendors, the lawsuit says.
ULA retaliated against Scott [the whistleblower] by forcing him out of the company after he revealed the alleged illegal activities. ULA officials placed a camera above his desk, monitored and questioned his cell phone and computer use, and suggested he violated the law or engaged in improper bidding practices himself, the lawsuit says.
ULA used a system called the Keith Crohn model that creates a grid using the cost of equipment to reach an employee cost. A labor value was placed on the grid for every item ordered through the company’s purchasing department. For example, any item that cost between $1 and $1,000 would be assigned a labor value of 8 hours. It didn’t matter what part it was, the lawsuit said. The U.S. bans arbitrary cost estimates when actual data is available that establishes the cost.
The first paragraph of the quote above actually describes the bad deal that the Air Force made with ULA back in the early 2000s, giving the company a monopoly on launches while subsidizing it to the tune of $1 billion per year. That deal is now dead, and ULA is instead forced to compete with SpaceX (and soon others I hope) for launch contracts. Not surprisingly, their prices have dropped considerably.
Readers!
Every February I run a fund-raising drive during my birthday month. This year I celebrate my 72nd birthday, and hope and plan to continue writing and posting on Behind the Black for as long as I am able.
I hope my readers will support this effort. As I did in my November fund-raising drive, I am offering autographed copies of my books for large donations. Donate $250 and you can have a choice of the hardback of either Genesis: the Story of Apollo 8 or Conscious Choice: The origins of slavery in America and why it matters today and for our future in outer space. Donate $200 and you can get an autographed paperback copy of either. IMPORTANT! If you donate enough to get a book, please email me separately to tell me which book you want and the address to mail it to.
Please consider supporting my work here at Behind the Black. My analysis of space, politics, and culture, taken from the perspective of an historian, is almost always on the money and ahead of the game. For example, in 2020 I correctly predicted that the COVID panic was unnecessary, that the virus was apparently simply a variation of the flu, that masks were not simply pointless but if worn incorrectly were a health threat, that the lockdowns were a disaster and did nothing to stop the spread of COVID. Every one of those 2020 conclusions has turned out right.
Your help allows me to do this kind of intelligent analysis. I take no advertising or sponsors, so my reporting isn't influenced by donations by established space or drug companies. Instead, I rely entirely on donations and subscriptions from my readers, which gives me the freedom to write what I think, unencumbered by outside influences.
You can support me either by giving a one-time contribution or a regular subscription. There are four ways of doing so:
1. Zelle: This is the only internet method that charges no fees. All you have to do is use the Zelle link at your internet bank and give my name and email address (zimmerman at nasw dot org). What you donate is what I get.
2. Patreon: Go to my website there and pick one of five monthly subscription amounts, or by making a one-time donation.
3. A Paypal Donation or subscription:
4. Donate by check, payable to Robert Zimmerman and mailed to
Behind The Black
c/o Robert Zimmerman
P.O.Box 1262
Cortaro, AZ 85652
You can also support me by buying one of my books, as noted in the boxes interspersed throughout the webpage or shown in the menu above.
Will there be criminal charges filed against the ULA people that retaliated against Scott?