By Ted Mann
The Justice Department is seeking up to $148 million in damages
and fines from United Technologies Corp. over allegations that
subsidiaries of its helicopter business overbilled the U.S. Navy
for spare parts.
The company had previously disclosed the complaint against two
subsidiaries of Sikorsky Aircraft, the helicopter unit. In a filing
Friday morning, United Technologies said it was notified July 13
that the Justice Department had opened a criminal complaint into
the matter.
Sikorsky is the maker of helicopters for commercial and military
use, including the Black Hawk and the next iteration of Marine One,
the presidential helicopter.
United Technologies said it is cooperating fully with the
investigation. The company says it doesn't think it is likely to
lose the case.
At issue is whether the two subsidiaries of Sikorsky were within
their rights to include profit and overheard in billings to the
Navy from 2006 to 2012, when the company had a contract to supply
spare parts for two types of fixed-wing training aircraft.
The Justice Department has said the companies violated the False
Claims Act. United Technologies contends that including the
overheard costs in its billings to the government was legal.
The criminal investigation comes as United Technologies hopes to
complete its announced sale of Sikorsky to Lockheed Martin Corp.
for $9 billion. The deal, which would net United Technologies about
$6.2 billion after taxes, must still be approved by the
government.
Write to Ted Mann at ted.mann@wsj.com
Access Investor Kit for United Technologies Corp.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US9130171096
Subscribe to WSJ: http://online.wsj.com?mod=djnwires