U.S. GENERAL ACCOUNTING OFFICE-Continued
SCHEDULE I.-Summary of cases reported to the Congress and the Department of Justice disclosing excessive prices negotiated or costs erroneously claimed and paid under Government contracts and status of Department of Justice action thereon, period July 1, 1958-Dec. 31, 1964-Con.
Status of Department of Justice action
After a full review it was determined by the Department of Justice that a fraud was not perpetrated on the Government and the Army was authorized to nego- tiate an administrative settlement. 208, 000 As a result of conferences with company officials, an offer has been submitted. The Department of Justice received GAO's recommendation on Apr. 6, 1965, and is now processing this offer.
327,000 The Department of Justice requested by letter of Dec. 8, 1964, that the Air Force furnish a full report and its comments on any irregularities in the performance of the contract. This information was re- ceived on Mar. 11, 1965, and is being reviewed.
The Department of Justice advised Clevite Corp. of intention to enter a fraud suit for recovery of $4,419,500 plus damages, penalties, and forfeitures. A compromise settlement of $2,800,000 was accepted by the Department of Justice. Air Force has furnished data to support a claim of mutual mistake in pricing and this claim was forwarded to the U.S. attorney for the eastern district of New York for suit on Mar. 25, 1965.
132,000 Suit has been instituted against the cor- poration in the U.S. District Court for the Southern District of New York alleging violations of the False Claims Act. The U.S. attorney is presently engaged in pretrial discovery.
Clevite Corp., Brush Electronics Co. Division, Cleveland, Ohio.
Conferences were held with GAO auditors to elicit more detailed information. The file is being reviewed again with particu- lar reference to the additional information to determine whether there is a cause of action for fraud or for restitution of exces- sive payments.
1,084, 000 GAO is in the process of replying to the Department of Justice request of Mar. 26, 1965, to furnish comments on Depart- ment of the Air Force memorandum of Mar. 18, 1965.
143,000 A detailed inquiry was directed to the Army. The data received from GAO and Army is being studied to determine whether there is a probable cause of action.
The Department of Justice has obtained further reports from both the Army and GAO together with copies of the contract, the repair contract, interview reports, inspection reports, related correspond- ence interview sheets, specifications, and drawings. The reports and data are being studied.
242,000 The Department of Justice has concluded that suit could not be based on the terms of the contract, and that the facts will not support a quasi-contract theory of the
149, 000 The Department of Justice made a claim upon Kearfott Co., Inc., in the amount of $507,721.45. Kearfott offered to settle the claim by payment of $350,000 and this offer was accepted by the Department of Justice. 56,000 A collection suit to recover indebtedness of $89,639.64 was instituted in the U.S. District Court, Southern District of California. A compromise settlement of $33,368 was accepted and the action dismissed with prejudice. 303,000 Negotiations with representative of Systron-Donner to explore the prospect of settlement were unsuccessful. Suit against Systron-Donner was filed under the False Claims Act in the U.S. District Court for the Northern District of California.
U.S. GENERAL ACCOUNTING OFFICE-Continued
SCHEDULE I.-Summary of cases reported to the Congress and the Department of Justice disclosing excessive prices negotiated or costs erroneously claimed and paid under Government contracts and status of Department of Justice action thereon, period July 1, 1958-Dec. 31, 1964-Con.
Suit has been filed in the U.S. District Court for the Southern District of New York under the False Claims Act and alternatively for breach of contract. The case was tried in March 1965 before a court without a jury and a decision has not yet been rendered.
Suit was filed in the U.S. District Court for the District of Minnesota in Sep- tember 1963 under the False Claims Act. There have been extensive pretrial dis- covery proceedings. The case is on the court's current trial calendar.
The Department of Justice accepted an offer in compromise in the amount of $327,300 submitted by Philco Corp. In accepting this offer, it was specified that acceptance did not prejudice or affect negotiations between Philco and the Department of the Navy as to any facet of the contract other than the alleged inclusion by Philco in the proposed costs for that contract the estimated cost of items which Philco had previously agreed with the Navy would not be furnished. The Department of Justice held discussions with representatives of RCA and ac- cepted an offer in compromise in the amount of $258.000 as settlement of any claims arising from the allegations con- tained in the GAO report. The accept- ance did not prejudice or affect negotia- tions between RCA and the Air Force as to any facet of the Air Force contract other than the alleged withhclding of pertinent cost information during con- tract negotiations which was the subject of the GAO report. The Navy has been requested to furnish a report which has not yet been received. 183,000 The Department of Justice, after con- sideration of information obtained in the case, concluded that under the circum- stances of the settlement by the Depart- ment of the Air Force the likelihood of success in a civil action against the con- tractor for fraud was negligible. Accord- ingly, the Department of Justice closed its civil file in this matter.
U.S. GENERAL ACCOUNTING OFFICE-Continued
SCHEDULE I.-Summary of cases reported to the Congress and the Department of Justice disclosing excessive prices negotiated or costs erroneously claimed and paid under Government contracts and status of Department of Justice action thereon, period July 1, 1958-Dec. 31, 1964-Con.
The Department of Justice requested comments from GAO on a report from the Air Force. Comments on the Air Force report were forwarded to the Department of Justice on Apr. 19, 1965. The Department of Justice solicited the comments of the Defense Department. A conference was held with representa- tives of the Department of Defense and a request was made for copies of certain additional documents.
The General Accounting Office has been advised by the Department of Justice that an offer in compromise was tendered by Westinghouse Electric Corp. on Apr. 22, 1965, in the amount of $1,025,000. Extensive reports have been received by the Department of Justice from the respective Departments and conferences have been held with agency and com- pany representatives. Some additional investigation has been necessary and undertaken. Conferences have been held with counsel for the subject and additional materials submitted. These matters are currently being analyzed and evaluated by the Department of Justice,
Westinghouse Electric Corp., Lima, Ohio.
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