Judge sends Deepwater false claims lawsuit to trial

A False Claims Act whistleblower lawsuit against the prime contractors for the Coast Guard’s $26 billion Deepwater acquisition program will go to trial in November 2010, a U.S. District Court judge has ruled.

Former Lockheed Martin Corp. engineer Michael J. DeKort filed the complaint against Integrated Coast Guard Systems, a joint venture of Lockheed Martin and Northrop Grumman Corp. DeKort accused the companies of being seriously deficient in carrying out the contract and caused major safety, security and national security problems and wasted taxpayers' money.

U.S. District Judge Reed O’Connor of U.S. District Court for the Northern District of Texas, on Oct. 2 rejected a request from the defendants to dismiss the case, saying their request for dismissal was “moot.”

On Oct. 5, O'Connor issued a schedule for pleadings, naming of expert witnesses, identifying evidence, and a trial. He also instructed the parties to hire a mediator and attempt to come to an agreement to resolve the case. The trial will take place upon two days’ notice at any time during the four weeks that start Nov. 1, 2010.

Lockheed Martin officials have previously said the allegations are without merit and said they would “vigorously defend” against the lawsuit.

DeKort previously worked on Deepwaater’s command, control and communication systems. He left Lockheed Martin in 2004. He is seeking damages of up to $720 million along with civil penalties, legal costs and other relief in the lawsuit, according to his attorney.

Deepwater is the Coast Guard’s largest acquisition program. It includes the production of new assets including national security cutters and patrol boats.

The Coast Guard has acknowledged several significant problems with the program, and in 2007 the service rejected eight new patrol boats due to structural problems with the hulls. The Coast Guard is seeking a refund for $96 million for unsound patrol boats produced under Deepwater.

In False Claims Act lawsuits, plaintiffs can either pursue a case with or without the Justice Department. If the plaintiff wins, the government can collect damages of up to three times its losses and the plaintiff can collect 25 to 30 percent of the recovery amount. The Justice Department has not joined the Deepwater case.