Military Contract Giant Investigated for Sale of Fragile Flares; Could Pay Hundreds of Millions

The New York Times reported on the investigation of the aerospace and military contract giant ATK Thiokol for violation the False Claims Act. Whistleblower Kendall Dye, a former ATK engineer, discovered that the company was cheating taxpayers by selling fragile flares to the United States Army and Air Force and so endangering the soldiers who used them.

Through the False Claims Act, the government is entitled to recover three times its damages. Should the government win this case, Mr. Dye’s lawyers estimate that the total recovery could reach hundreds of millions of dollars for the purchases of tens of thousands of the flares. Of this settlement, the whistle-blower is able to receive up to 30 percent of the total amount recovered.

Mr. Dye discovered that the flares, which were required to withstand a fall of at least 10 feet, could actually explode after a fall of only 11 inches. After notifying ATK superiors of his discovery, the company failed to correct the problem and continued to sell the flairs. “Ethics and values got thrown out the window when there was a lot of money at stake,” Dye said.

There have been growing concerns about the Department of Defense’s ability to monitor the more than $408 billion it pays for goods and services from companies such as ATK. Last March, the Department’s own inspector general issued a report to Congress that warned of an “increasing gap between resources and oversight, which results in a corresponding increase in risk for fraud, waste and abuse.”

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