Case Document 1 Filed 1 of 36 PageID 1 IN THE UNITED STATES DISTRICT COURT 99V FOR THE MIDDLE DISTRICT OF FLORIDA . a - JACKSONVILLE DIVISION UNITED STATES OF AMERICA, UNDER SEAL PURSUANT 0 31 Ex rel Ari Lawrence, (1.3. C. ?3 730(b)(2) Relator-Plaintiff, v. Do Not Place In Press Box or Enter On Publicly Accessible System (PACER) HUNTINGTON INGALLS INDUSTRIES, INC., HUNTINGTON INGALLS INCORPORATED, NORTHROP GRUMMAN CORPORATION, Defendants. FALSE CLAIMS ACT COMPLAINT AND DEMAND FOR JURY TRIAL On behalf of the United States of America, Relator-Plaintiff, Ari Lawrence (hereina?er ?Relator?), by counsel, ?les this quz? tam Complaint against Huntington Ingalls Industries, Inc. (?Huntington Ingalls?), Huntington Ingalls Incorporated (?Huntington Ingalls Incorporated?) and Northrop Grumman Corporation (?Northrop Grumman?) (herein collectively referred to as ?Defendants?), and alleges as follows: I. INTRODUCTION 1. This is an action to recover treble damages and civil penalties in excess of $100? million on behalf of the United States of America ?'om Defendants for knowingly and/or recklessly presenting false claims to the United States government in violation of the federal False Claims Act 31 U.S.C. 3729, et seq. Defendants falsi?ed testing and certi?cations on multi-billion dollar submarine contracts, which induced the Government to pay :baobilwo 1 5d Case Document 1 Filed 2 of 36 PageID 2 Defendants in-full for submarines with dangerous defects that put American lives at risk. More speci?cally, as to critical components of the submarines, including the application of the sound- dampening exterior hull coating, the Defendants: 1) failed to develop a ?rst particle testing procedure; 2) failed to produce sample test articles; 3) failed to perform mechanical and physical property tests on said samples; 4) failed to demonstrate processing ability; 5) failed to receive ?rst article quali?cation from the applicable technical authority prior to commencement of work; 6) failed to develop and maintain a training program that ensured that all personnel were properly educated and certi?ed; and 7) failed to develop and maintain internal processing handling and quality inspection procedures. Nevertheless, the Defendants certi?ed in their payment applications that all such certi?cations and procedures had been met. II. JURISDICTION AND VENUE 2. Prior to the ?ling of this Complaint, and required by the FCA, 31 U.S.C. 373 Relator has previously provided to the Attorney General of the United States and the United States Attorney for the Middle District of Florida, a Sworn Disclosure Statement containing all material evidence and information related to this complaint. The Sworn Disclosure Statement is supported by material evidence known to the Relator establishing the existence of Defendants? false claims. Because the Sworn Disclosure Statement includes attomey-client communications and work product of Relator?s attorneys, and is submitted to the Attorney General and the United States Attorney in their capacity of potential co-counsel in the litigation, the Relator understands this disclosure to be Con?dential. 3. The Relator, Ari Lawrence, is a citizen of the United States and a resident of the Commonwealth of Virginia. He is a Senior Engineer in the Submarine Engineering Department Case Document 1 Filed 3 of 36 PageID 3 with technical expertise related to the construction of Virginia-class attack submarines at the Huntington Ingalls Newport News Shipbuilding facility in Virginia. 4. Northrop Grumman is an aerospace and defense technology company and is the ?fth largest defense contractor in the world as of 2015. Northrop Grumman employs over 68,000 people worldwide. The company is headquartered in Falls Church, Virginia. For 2015, the company?s net earnings totaled approximately Two Billion Dollars Northrop Grumman has operations throughout the United States and the world and further has of?ces located at 5401 West Kennedy Boulevard, #1000, Tampa, Florida; 4500 NW 27th Avenue, Gainesville, Florida; and 5000 US 1, Saint Augustine, Florida. On November 7, 2001, Northrop Grumman entered into an agreement to purchase Newport News Shipbuilding for a total of $2.6 billon, which created Northrop Grumman Newport News. In January of 2008, Northrop Grumman realigned it two shipbuilding sectors (Northrop Grumman Newport News and Gulf Coast-based Northrop Grumman Ship Systems) to create a single sector Northrop Grumman Shipbuilding. On March 31, 2011, Northrop Grumman Shipbuilding spun off its shipbuilding division to create Huntington Ingalls Industries. 5. Huntington Ingalls Industries, Inc. (?Huntington Ingalls?) is a corporation organized and existing under the general corporation law of the state of Delaware. Huntington Ingalls is America?s largest military shipbuilding company with its headquarters in Newport News, Virginia. Huntington Ingalls employs approximately 37,000 people operating both domestically and internationally. Huntington Ingalls also performs work in Pascagoula, Mississippi; Virginia Beach, Virginia; Brooms?eld, Colorado; Panama City, Florida; Houston, Texas; and San Diego, California and also has employees in various places throughout the nation, including Groton, Connecticut; Kingston, Rhode Island; and at a subsidiary company Case Document 1 Filed 4 of 36 PageID 4 (Universal Pegasus International) in Tampa, Florida. Many of the acts complained of herein occurred both prior to and after the spin-off of Huntington Ingalls from Northrop Grumman. 6. Huntington Ingalls Incorporated is a Virginia Corporation. Furthermore, Huntington Ingalls Incorporated has ?led a ?ctitious name statement with the Virginia State Corporation Commission indicating that it also operates under the name of Newport News Shipbuilding, a Tenneco Company. Huntington Ingalls Industries publicly advertises that NeWport News Shipbuilding is a division of Huntington Ingalls Industries. As a result, upon information and belief, Huntington Ingalls Incorporated is a division and wholly-owned subsidiary of Huntington Ingalls Industries, Inc. 7. The United States District Courts have exclusive jurisdiction over actions brought under the FCA pursuant to 31 U.S.C. ?3732, and otherwise have jurisdiction under 28 U.S.C. ??l331 and 1345. At all times relevant hereto, the Defendants regularly conducted substantial business in Florida and maintained and operated sales division of?ces in this District and Division. Accordingly, the Defendants are subject to personal jurisdiction in this District. Venue is appropriate in the Middle District of Florida pursuant to 31 U.S.C. ?3732(a) and 28 U.S.C. ?l391(b)(1) and (2). 8. Section 3732(a) of the FCA provides that ?any action under Section 3730 may be brought in any judicial district in which the defendant or, in the case of multiple defendants, any one defendant can be found, resides, transacts business, or in which any act proscribed by Section 3729 occurred.? The acts complained of herein occurred throughout the United States, the State of Florida and within the geographic area encompassed within the Jacksonville Division of the United States District Court for the Middle District of Florida. I Case Document 1 Filed 5 of 36 PageID 5 9. Relator began employment with Huntington Ingalls? predecessor (Northrop Grumman Corporation) in October of 2001 as an Engineering Associate I . He has continued with his employer to the current date and is currently a Senior Engineer. He has direct knowledge of the facts herein and is the original source of the same. While he is unaware of any of the counts, fraud allegations and/or any of the acts described herein in violation of 31 U.S.C ?3729 having been publicly disclosed as contemplated under 31 U.S.C. he has made voluntary disclosure of substantially all evidence and information in his possession to authorities responsible for investigating these allegations prior to ?ling this Complaint and is an original source of the information contained in the Complaint. 10. Under the FCA, this Complaint is to be ?led in camera and remain under seal until the Court orders otherwise. FACTS COMMON TO ALL COUNTS A. Introduction 11. Newport News Shipbuilding (NN S) is a division of Huntington Ingalls located in Newport News, Virginia. Virginia-class submarines are built through an arrangement between Huntington Ingalls, in Newport News, Virginia and General Dynamics Electric Boat in Groton, Connecticut (hereinafter referred to as ?Electric Boat?). Under the arrangement, the Huntington Ingalls facility in Newport News builds the stern, habitability and machinery spaces, torpedo room, sail and bow; whereas, Electric Boat builds the engine room and control room. Huntington Ingalls and Electric Boat alternate work on the reactor plant, as well as the ?nal assembly, testing, out?t and delivery of the boats. 12. The Relator was, and continues to be as of the date of the ?ling of this suit, the Subject Matter Expert (SME) and the ?System Owner? for the system called a High Frequency Case Document 1 Filed 6 of 36 PagelD 6 Chin Array (?Chin Array?), which is a sonar system used for mine detection on the Virginia? class submarines. The ?Chin Array,? which is a subject of the false claims herein and described in the following paragraph, is always installed by Huntington Ingalls. 13. In the course of his employment, Relator discovered that certain departments at the Huntington Ingalls facility did not have appropriate and required quali?cations to apply a certain two-part adhesive surface coating to the exterior of the Chin Array. The TPAC is the primary binding agent that is utilized to attach the Virginia-class submarines? stealth exterior sound absorbing materials to the entire submarine hull. As more fully described below, when Relator pressed for documentation validating the required certi?cations and pre- quali?cations, individuals at NNS falsi?ed test reports and equipment certi?cations in an attempt to conceal the fact that they were not quali?ed to apply the TPAC. In addition, the NNS Quality Assurance Department performed a ?Pulse? Audit of the departments involved in applying the TPAC and immediately issued a Serious De?ciency Report (SDR) to the Submarine Engineering Department and Trade Management noting that they did not have the proper quali?cations, documentation, or training required to perform the work. Moreover, an independent Director at NNS also identi?ed the de?ciencies and voiced the Navy?s growing concerns over the poor quality of work occurring at NNS with respect to the TPAC. 14. Notwithstanding Relator?s requests, NNS took no steps to cease utilizing the TPAC improperly, ignoring the objections of SUBE and QA, and exerted pressure on employees to improperly certify and accept the work performed. 15. The knowing failure of NNS to have certi?ed and pre-quali?ed applicators is a violation of the Navy?s design speci?cations and contractual requirements; and NNS took Case Document 1 Filed 09/26/1%Page 7 of 36 PageID 7 deliberate efforts to conceal the lack of quali?cations, procedures, and training as required by the Navy. 16. More importantly, in the process of investigating these serious de?ciencies, Relator discovered that Huntington Ingalls had never obtained proper quali?cations and certi?cations for the use of TPAC on the Virginia-class submarines for any applications. These quali?cations and certi?cations are critical to ensure that the personnel used to mix and apply the TPAC are properly quali?ed and that the procedures are performed correctly 17. Since the commencement of the program, as a consequence of failures to follow the Navy?s contracting requirements and speci?cations as alleged above, Virginia-class submarines have been plagued with serious adhesive failures of the exterior hull coating due to the failure of the binding agent and the problem with the TPAC has continued to this date, including failures of the exterior coating on the recently sea-trialed USS John Warner. 18. The failure of this exterior sound-absorbing material jeopardizes the safety of the submarines, and makes the submarine easier to detect by those who would seek to harm the United States, thereby endangering the crew and national security. The failure of the sound- absorbing material is a direct result of failure to adhere to proper Navy contract speci?cations and a direct effort to conceal that lack of quali?cations and certi?cations required by the Navy. B. Background of Virginia-Class Submarines 19. In 1998, the United States Navy awarded a $4.2 billion dollar contract for the construction of the ?rst four boats of the class. USS Virginia (SSN-774) was the ?rst of these. On December 22, 2008, the United States Navy awarded a $14 billion dollar contract to Electric Boat and Huntington Ingalls? predecessor (Northrop Grumman) for eight more Virginia-class submarines. The contract called for the delivery of one submarine in each ?scal year of 2009 and Case Document 1 Filed 8 of 36 PageID 8 2010 and two submarines in each ?scal year 2011, 2012 and 2013. In December of 2010, the United States Congress passed a defense authorization bill that expanded production to two submarines per year, which resumed on September 2, 2011, with the commencement of construction of the USS Washington (SSN-787). 20. The Virginia-class submarines have been constructed in ?Blocks.? These Blocks are summarized in Table I below that includes the status of the construction and/or delivery of the vessels and ?irther includes the internal designation or ship number used by Huntington Ingalls in Newport News. Table I Virginia-Class Submarine Construction Block Name Newport Status Final Contract Contract Hull News Delivery Amount Number Number I USS Virginia Commissioned Electric Boat (SSN-774) and in service I USS Texas Commissioned Newport (SSN-775) and in service News Shipbuilding I USS Hawaii Commissioned Electric Boat and in service I USS North Commissioned Newport Carolina and 1n serv1ce News (SSN-777) Shipbuilding II USS New Commissioned Electric Boat Hampshire and in service (SSN-778) 11 USS New Commissioned Huntington Mexico and in service Ingalls (SSN-779) II USS Missouri Commissioned Electric Boat (SSN-780) and in service Case Document 1 Filed 9 of 36 PageID 9 II USS California Commissioned Huntington (SSN-781) and in service Ingalls 11 USS Commissioned Electric Boat Mississippi and in service (SSN-782) 11 USS Minnesota Commissioned Huntington (SSN-783) and in service Ingalls USS North NN Commissioned Electric Boat Dakota 669 Delivered Aug.29,2014 USS John NN Commissioned Huntington Warner 670 and in serv1ce Ingalls (SSN-785) on P.S.A [Illinois] NN Christened in Electric Boat SSN-786 671 10/15 111 [Washington] NN Christened in Huntington SSN-787 672 03/ 1 6 Ingalls [Colorado] NN Under Electric Boat 673 Construction [Indiana] NN Under Huntington SSN-789 674 Construction Ingalls 111 [South Dakota] NN Under Electric Boat SSN-79O 675 Construction [Delaware] NN Under Huntington SSN-791 677 Construction Ingalls IV [Vermont] Under Electric Boat N0002412C2115 SSN-792 Construction 2%,650394, IV [Oregon] Under Electric Boat N0002412C2115 SSN-793 Construction 2%550394, IV [Montana] On order Huntington N0002412C2115 SSN-794 Ingalls 2%,650394, Case Document 1 Filed 09/26/19 gage 10 of 36 PageID 10 IV [Hyman G. On order Electric Boat N0002412C2115 Rickover] 1 7,6505 94, SSN-795 416 IV [New Jersey] On order Huntington $17,650,394, N0002412C2115 SSN-796 Ingalls 416 IV [Iowa] On order Electric Boat $17,650,394, N0002412C2115 SSN-797 416 IV [Massachusetts On order Huntington $17,650,394, N0002412C2115 Ingalls 416 IV [Idaho] On order Electric Boat $17,650,394, N0002412C2115 416 IV On order Huntington $17,650,394, N000241202115 Ingalls 416 IV [Utah] On order Electric Boat 2%,650594, N0002412C2115 SSN- 21. The ten Virginia-class boats shown in Table 1 for the period of FY2014-FY2018 (referred to as the Block IV boats) are being procured under a multiyear procurement (MYP) contract that was approved by Congress as part of its action on the FY2013 budget, and awarded by the Navy on April 28, 2014. The award identi?cation number was N0002412C2115 and the base and exercise options value of the contract was $17,650,394,416. The eight Virginia-class boats procured in FY 2009-FY2013 (Block boats) were procured under a previous MYP contract, and the ?ve Virginia-class boats procured in FY2004-FY2008 (Block 11 boats) were procured under a still-earlier MYP contract. The four boats procured in FY1998-FY2002 (the Block I boats) were procured under a block buy contract, which is an arrangement somewhat similar to an MYP contract. The boat procured in FY2003 fell between the FY1998-FY2002 block buy contract and the FY2004-FY2008 MYP arrangement, and was contracted for separately. C. Submarine ?ull ?oating Problems 22. Since the inception of the program, the Virginia-class submarines have been plagued with problems with their exterior hull coating system. 10 Case Document 1 Filed 09/26/19 p"Rage 11 of 36 PageID 11 23. The hulls of the Virginia-class submarines contain a specialized exterior hull coating that is designed to be ?anechoic,? which means that the coating absorbs the sound waves of active sonar so they do not bounce back to the ship or submarine emitting the signal, thus evading sonar detection. To the extent that this exterior hull coating fails, this imperils an underway submarine by making it easier to detect by sonar location. 24. The exterior hull coating is applied to the submarine by Defendants with a two- part adhesive coating as discussed above, the 25. The United States Navy started reporting problems with the separation of the exterior coating in 2007 on the USS Virginia, which was the ?rst submarine of the class. At that time, it was clear that there was a de-bonding problem with the exterior coating. In fact, on the USS Virginia, and subsequently delivered Virginia-class submarines, the exterior coatings tore off submarines while underway, often in large sections up to hundreds of square feet. Furthermore, the Pentagon?s top weapons tester at the Of?ce of the Director, Operational Test Evaluation released a scathing report on June 30, 2010 on the Virginia-class submarine?s tendency to shed its sound-dampening hull coating. 26. On January 20, 2010, the Daily Press, a Newport News, Virginia-based newspaper reported that the coating that had peeled off in the earlier submarines in large swaths appeared to be adhering better to new boats, as indicated by a top Navy procurement of?cial. The report indicated that after the Navy found that the sonar absorbing coating had major adhesive failures on three of the ?rst four submarines in its class, they initiated an investigation to determine the cause of the problem and how to ?x it. The newspaper article further quoted Vice Admiral Kevin M. McCoy, Commander of Naval Sea Systems Command, stating that ?we think, for the most part, those issues are behind us.? McCoy further stated that the Navy?s ll Case Document 1 Filed 09/26/19 ?Fgage 12 of 36 PageID 12 investigation revealed ?no single smoking gun? and that he was very con?dent going forward that the Navy?s submarine would retain its exterior coating that is necessary to keep the ship silent and stealthy. The article further indicated that effectiveness of the submarines was being ?xed during normal dry-dock maintenance. 27. Despite the Navy?s public assurances, evidence indicates that the exterior coatings of the Virginia-class submarines have continued to fail since that date. One observer published an article on September 6, 2010 entitled Virginia Class When Does Hull Coating Separation Endanger the Boat?? This individual, Craig Hooper, referenced the report and further quoted Allen Baribeau, with Naval Sea Systems Command, in an interview from Inside the Navy, wherein he stated ?[t]he de-bonding issue has been aggressively pursued since its recognition in 2006,? the statement reads, ?the problem was largely due to immature application processes, which have been corrected on late ships. Because of the parallel construction process, [the hull treatment] was applied to several ships before the ?rst at-sea testing of Virginia. The program of?ce continues to monitor the performance of all ships and pursue improvement.? 28. Mr. Hooper went on to observe that based upon the pictures available, it appeared that every Virginia-class submarine was suffering ?om an ?ugly tendency to shed their hull treatment? and questioned whether this could affect survivability. The article included recent photographs of the USS Virginia and USS Hawaii showing large sections of their surface treatment ripped away. 29. In fact, these same problems continue today as evidenced by the failure of the exterior coating system on the recent sea trial of the USS John Warner in June of 201 5. 12 Case Document 1 Filed 09/26/19 ,Rage 13 of 36 PageID 13 D. The i hFre uenc Chin Arra 30. As previously discussed, the Virginia-class submarines are built in a cooperative agreement by Electric Boat and Huntington Ingalls. The two shipyards construct different sections of the boat and then alternate for the ?nal assembly and delivery of the boats; Huntington Ingalls will deliver one boat and Electric Boat will deliver the next. 31. Each submarine has a High Frequency Chin Array (the ?Chin Array?) that is installed directly under the bow so as to give an unobstructed acoustic view in front of and below the submarine. Huntington Ingalls installs the Chin Array on all Virginia-class submarines regardless of whether the boat is delivered by Huntington Ingalls or Electric Boat. The Chin Array is a passive high resolution sonar system used for mine detection. 32. The Chin Array?s composite fairing cap and tail fairings have historically been covered with a neoprene boot for protection. However, due to its location, this boot is vulnerable to damage during normal ship operations from debris impacts. As a result, if the neoprene boot is damaged, even in small localized areas, it can come adrift in its entirety while underway and potentially damage other areas of the hull. As a result, the decision was made to change the design from a molded neoprene boot that is adhered to the fairings using epoxy, to a casted/pourable TPAC material utilized as a boot. 33. The Chin Array components are designated as ?buy? parts that are subject to government competitive bid requirements in addition to requirements that the parts be procured only from quali?ed suppliers. Pursuant to Huntington Ingalls?s contract with the Navy, the shipyard is contracted to only install compliant parts on the hull. As discussed below, certain groups within the Huntington Ingalls organization sought instead to install the TPAC boot to the procured fairings themselves, claiming it would lower acquisition costs. Further, these groups maintained that Huntington Ingalls was fully quali?ed to pour the TPAC boot and that it would 13 Case Document 1 Filed 09/26/19 ,B?age 14 of 36 PageID 14 be a waste of money for Huntington Ingalls to pay a supplier to become quali?ed to do this work. 34. There were two NNS Departments that were primarily involved in advocating pouring the boots in-house. Within Department E46 is the Special Hull Treatment (SHT) and Mold In Place (MIP) group. E46 acts as a technical support group to Department X32, which is the Trade Department that installs MIP and SHT to the hull. E46 should maintain all NNS documentation, certi?cations, procedures and training programs related to for X32. Subsequently, all X32 trades shall hold and maintain certi?cations to apply on hulls. Department E46 is not a functional engineering group at NNS. As such, they do not hold technical authority to deviate from the Class Design requirements, nor are they authorized to direct trades to perform work. Department E46 is akin to a research and development team, whereas SUBE holds the functional engineering disciplines (Hull Structures, Mechanical, Electrical, and Submarine Piping) that hold all technical authority as the drawing and system owners. 35. The design change from a neoprene boot to a TPAC boot came in the middle of the Block 111 contract with the Chin Array fairing supplier. In order to mitigate out of scope design change fees, both NNS and Electric Boat agreed that Electric Boat trades (who are presumably quali?ed) should install the TPAC boots to Block 111 hulls 673D thru 677D. Then the Design change can be implemented on the Block IV hulls, which had not yet started, so that quali?ed suppliers could competitively bid for the work. This scenario was included in the Virginia-class Submarine Block IV technical baseline design that was agreed upon between the United States Navy, Electric Boat, and NNS, and believed to be the most cost effective method. 14 Case Document 1 Filed 09/26/19 p.Rage 15 of 36 PageID 15 36. New construction work must be performed in accordance with the applicable Drawings, Speci?cations, Part Number requirements, and the Purchase Order. For out of scope work, Trades or ?Tiger Teams? (installation and repair trades at various naval installations worldwide who perform emergent repair work) must perform work in accordance with an Engineering Report (ER). 37. The ?rst instances of Neoprene boot failures occurred while the ships were in service, therefore replacement TPAC boots were installed by Tiger Teams via ER. Accordingly, the 673D thru 677D (Block TPAC Electric Boat trade installation requirements were to be in accordance with: 400243 Navy Authorization and Funding to perform the work and Authorization Contract No. N00024-09-C-2104 and Contract Ch. No. N0684.0861A ERH433-2016C13 Rev. A Engineering Authorization and requirements to perform the work H576-1501 TPAC Processing manual and requirements (mixing etc.)l EB 4520 TPAC Quali?cation and Material requirements NAVSEA 690-6726587 TPAC Quali?cation and Material requirements H681-1202 HFCA DWG 38. Going forward for the 678D (Block IV), All Future Ships (AFS) New Construction Chin Array Design TPAC installation requirements are to be in accordance with: 1 H576-1501 is a shipbuilder only document. Suppliers cannot perform work from this document. 15 Case Document 1 Filed 09/26/19gage 16 of 36 PageID 16 EB Spec 4343 Chin Array Procurement Speci?cation H681-1202 Chin Array Piece Part Drawing Detail and Class Design Requirements H6811202-A7 thru A9 - Part Number contractual requirements and associated standard clauses and coded notes EB 4520 - TPAC Quali?cation and Material requirements NAVSEA 690-6726587 TPAC Quali?cation and Material requirements 39. Matt Shaffer from NNS Department E46 approached the Chin Array System owner (Relator) and requested the opportunity to share this work with Electric Boat and install the TPAC boot in-house to ?nish the Block boats. Mr. Shaffer stated that NNS could install a higher quality TPAC boot than Electric Boat at a lower cost than any supplier. Mr. Shaffer stated that NNS was fully quali?ed for all invoked TPAC requirements for the Program in accordance with H576-1501. The Relator, however, advised Mr. Shaffer that NNS was not quali?ed to meet the extensive New Construction Chin Array requirements in accordance with EB Spec 4343 as these requirements are far more stringent than the requirements. He further advised Mr. Shaffer that the company would expend signi?cant expense attempting to become quali?ed, instead of using one of several other suppliers who were already quali?ed to perform the work. The relator reluctantly granted approval to install the TPAC boots to Block 111 hulls 675D and 677D only, via ER, with the stipulation that they must be taught how to do the work from Electric Boat on hulls 673D and 674D, and Department E12 held ?nal approval authority of the ?nished parts prior to installation. 40. The H576-1501 manual, which as noted in paragraph 36 was a requirement for the Block replacement TPAC boots, includes the following for all shipboard TPAC Applications: EB 4520 and NAVSEA 690-6726587 - TPAC Quali?cation and Material requirements: 0 NNS First Article Quali?cations 0 NNS Engineering Approved Procedures for processing TPAC 16 Case Document 1 Filed 09/26/19 gage 17 of 36 PageID 17 A NNS Quality Inspection Program for all phases of TPAC Processing in accordance w/ MIL-I, MIL-Q, or ISO standards Table II EB Spec 4520 TPAC Incompressible Wedge Manufacturing First Article Testing and Quali?cations Process and Inspection Procedures/System IAW MIL-I Recurring Quality Assurance Inspections An NNS Training program that provides Trade Operator Certi?cations to perform any/all phases of and TPAC processing and installation work: Table - VCS DWG H576-1501 Special Hull Treatment Installation Procedure Section 8.3.1.6 Material Inspection in Accordance with NAVSEA DWG 690- Visual Inspection per Table 8.2 Material Veri?cation per Table 8.2 Certi?cation Records for documentation per NAVSEA DWG 690-6726597 Section 8.3.1.11 TPAC Bonded Shapes Visual Inspection for Major/Minor Defect Criteria in Table 8-4 Dimensional requirements as speci?ed by piece part DWG Material veri?cation Shore Hardness documentation In Process material samples tested for acceptance in accordance w/ NAVSEA DWG 690-6726597 Certi?cation Records for documentation in accordance with EB Spec . Traceability documentation for raw material batch to ?nished part Section 9.0 Training Of?cial Training Records shall be kept SAT rating required prior to performing any work Quali?ed personnel shall be issued a certi?cation card which identi?es training l7 Case Document 1 Filed 09/26/19 pRage 18 of 36 PageID 18 0 EB Spec 4343 Chin Array Procurement Speci?cations: 41. Table IV EB Spec 4343 In Chin Array Procurement Approved Technical Documents Required Prior to Production Section 3.2.1 3.11.1.2 Mold and TPAC Installation DWGs Section 3.2.4.1 TPAC First Article Test Procedure Section 3.2.4.1 TPAC First Article Test Report Section 3.2.5 TPAC Installation Procedures Section 3.5 Tool String Matrix Section 3.5 3.11.1.3 Component Design Report for Special Tooling (molds, etc.) Section 3.8.4 Alternate Material Use Requests Section 3.11.1.1 Process Speci?cations Section 3.11.1.3 Special Tool DWGs Section 3.11.1.4 Dimensional Inspection Procedures Section 3.11.1.4 Visual Inspection Procedure Section 3.11.1.4 Ultrasound Irgpection and Equipment Calibration Procedures Section 3.11.1.4 Surface Finish Inspection Procedures Section 3.11.1.4 Acceptance and Rejection Criteria Procedures Section 3.11.1.4 Repair and Rework Procedures Section 3.11.1.4 Ultrasound Equipment Procedures Recurring Quality Assurance Certi?cation and Test Reports Section 4.3.5.4 Material Test Documentation Section 4.3.4.5 Material Storage Life Certi?cation Section 4.3.7 Inspection Reports Visual Inspection/Workmanship Report Dimensional Inspection Report UT Result Report and Map Shore Hardness Measurements and Map Mass Ratio Report The Relator initially indicated to Departments E46 and X32 that the TPAC needed to be applied in accordance with the Chin Array Procurement Speci?cation EB Spec. 4343. This speci?cation includes the requirements discussed above, such as the ??rst article? testing and approval, engineering/customer approved procedures, and a quality inspection program. These speci?cations were in place to ensure a product that conformed to all contractual requirements. Among other things, the speci?cations required TPAC ?rst article testing, such that both personnel and equipment were to undergo testing and certi?cation prior to being permitted to install the TPAC on the Chin Array. Also, samples were required to be produced 18 Case Document 1 Filed 19 of 36 PageID 19 and tested prior to obtaining certi?cation. This is an extensive and time-consuming process as it would require all equipment and application personnel to be certi?ed to apply the materials correctly before any work could be commenced, including the Paragraph 39 summary of pertinent TPAC EP Spec 4343 requirements that applied to the Chin Array. 42. One of the Relator?s co-workers, David Perreault from Department E12, discovered that E46 had used the ERH433-2016C13 to create a time and material charge against hull 672D, then procured signi?cant amounts of raw materials and a TPAC processor. NNS was not authorized to charge time or resources to hull 672D, as ?nding for that hull was already authorized by the Navy under an UPSA (modi?cation to the 673D - 677D FMR without budget constraints) and directed by Engineering to be performed by a quali?ed supplier that was already under contract. 43. Mr. Perreault submitted a ?false charging? complaint to the ?OpenLine? of Newport News Shipbuilding. Huntington Ingalls advertises .that its OpenLine offers ?an anonymous and con?dential means to voice concerns or report a suspected violation of our Code of Ethics and Business Conduct without fear of retaliation or coercion.? Huntington Ingalls further advertises that ?[i]ndividuals who witness or suspect that anyone is active against our Code of Ethics and Business Conduct should raise the concern immediately with their management, Human Resources, Business Conduct Of?cer (BCO) or the OpenLine.? Mr. Perreault?s OpenLine complaint was forwarded directly to the Human Resources Department of Department E46 (which is the group that committed fraud), instead of forwarding the complaint to higher management outside of the department. 44. As a result of Mr. Perreault?s call to the OpenLine, a meeting was scheduled with the Human Resources representative for Department E46 and the Human Resources 19 Case Document 1 Filed 09/26/19 ,?Rage 20 of 36 PageID 20 representative for the Relator?s department (E12), Submarine Engineering, at which point the Relator and Mr. Perreault were told that Departments E46 and X32 had done nothing improper. Amarita Kim was the HR Representative who blocked any action being taken against Department E46 for False Charging, and insisted that nothing was done improperly. 45. Matt Shaffer from Department E46, working in conjunction with Department X32 trades, poured the ?rst NNS TPAC boot designated for hull 677D in April 2015 on a Chin Array fairing cap. Scott Mader is a Supervisor in Department E46 and is Matt Shaffer?s immediate superior. Mr. Mader and Mr. Shaffer advised trade management that the part was fabricated and inspected in accordance with Virginia-class Submarine design and ER requirements and was satisfactory for installation. However, pursuant to applicable requirements and ERs, the part required inspection and acceptance by Relator?s group?SUBE-Department E12?prior to installation. Upon on-site review of the part, SUBE noted unacceptable defects, adhesion failures, and foreign material. All applicable Chin Array requirements maintain that no defect greater than .25? shall exist without repair and SUBE approval. This particular boot had a Major Defect in excess of 12 feet long across its entire leading edge. 46. Mr. Shaffer stated that he directed the area to be repaired without seeking SUBE approval, and believed the repair to be satisfactory. Mr. Shaffer, Departments E46, and X32 made numerous attempts to conceal the true as-built condition of the part by sanding over the areas such that an inspector could not see through the normally clear TPAC material. SUBE performed a more thorough inspection and documented the numerous defects in multiple ERs directing Departments E46 and X32 to perform extensive corrective actions. 47. At the same time the issues between Department E46 and E12 (the Relator?s Department) occurred, Department E12 Management authored and submitted a requisition 20 Case Document 1 Filed 21 of 36 PageID 21 request for the Relator to be promoted from an E3 Senior Engineer to an E4 Project Engineer based on his 15 years of experience, Master?s Degree, and repeated exemplary service and performance ratings. The requisition/promotion request was approved by the Director of Submarine Engineering as well as the Vice President of Engineering at Newport News Shipbuilding. However, when the promotion was submitted to HR to create a requisition, the promotion was denied by Amarita Kim. 48. Due to the condition and poor quality of the ?rst Fairing Cap with the TPAC boot, SUBE?Department E12 requested that E46 provide all standard processes and inspection documentation used when pouring the TPAC material for any/all other applications on the ship. Departments E46 and X32 were unable to produce any NNS created procedures or documentation. 49. The equipment used to mix the TPAC is also required to hold ?rst article quali?cations and approval prior to use pursuant to IAW ED Spec 5105. This Equipment Quali?cation is tied to the equipment manufacturer and the serial number of the machine. The use of a quali?ed machine does not grant the operator ?quali?cation? to mix the material in that machine. Department E46 stated that a Quali?ed Machine would be used to mix and pour the TPAC on the Fairing Cap. Therefore, E12 also requested that E46 provide a photograph of the Label Plate that is permanently af?xed to the TPAC Processor by the manufacturer typically by rivets or tack welds. A Label Plate includes the Manufacturers Name, Purchase Order, Part Number, and most importantly, the Serial Number of the machine and provides quality assurance that the equipment used met applicable speci?cations and requirements. Matt Shaffer, of Department E46, used a label maker to produce a sticker that read ?Serial 5803,? af?xed the sticker to the side of the machine, and took a photograph of the sticker and submitted it to 21 Case Document 1 Filed 09/26/19 ,Rage 22 of 36 PageID 22 Engineering as veri?cation that a quali?ed machine was used. This was clearly an attempt to fraudulently submit false Objective Quality Evidence (OQE) to demonstrate that a Quali?ed Machine was used on the part, when, in fact, it was not. 50. Departments E46 and X32 then claimed that the Fairing Cap only had to meet the requirements speci?ed in the H576-1501 installation manual, and did not have to meet any of the invoked Chin Array requirements, such as EB Spec 4343 and the Chin Array Drawing. Although SUBE disagreed with this claim, the Relator investigated the VCS DWG H576-1501 speci?cations to determine what that document required for The VCS DWG H576-1501 is a speci?cation of over 500 pages with dozens of invoked quali?cation speci?cations for the various material types speci?ed, and like EB Procurement Speci?cation 4343, required ?rst article quali?cation, Engineering approved processes and inspection procedures, as well as a thorough training and certi?cation program for the trades and operators. 51. SUBE then issued a follow up ER stating that the Fairing Cap with TPAC boot poured by for Hull 677D did not meet the requirements of EB Spec 4343, the Chin Array DWG H681-1202, ERH433-2016C13, H576-1501, nor the FMR, and was now deemed Technically Unacceptable for use on a Virginia Class Submarine. Engineering ordered the TPAC boot removed from the part in its entirety. 52. At this time, VCS Trade Management along with E46 exerted signi?cant pressure on the Relator and the SUBE Program to accept the part as-is despite its de?cient condition. Trade Management also refused to release the part to a courier so that the part could be shipped to a sub-contractor to have the boot removed. 53. The Relator had a heated discussion with his direct manager in front of numerous NNS Carrier, Submarine, and Supplier Quality Engineers over the Relator?s refusal to accept the 22 Case Document 1 Filed 09/26/19il-Rage 23 of 36 PageID 23 part as-is, and refusal to provide technical support to E46 and aid them in becoming successful at pouring TPAC to HF CA parts. The Relator?s Manager suggested the issue was merely a personality con?ict between Matt Shaffer and the Relator, despite evidence of fraud, violation of every requirement speci?ed for the part, and ultimately the blatantly defective as-built condition of the parts produced. 54. Immediately after the aforesaid discussion, Relator became visibly upset in an NNS Parking lot while describing the events to his wife (also an NNS Employee), which prompted NNS Security to approach the couple. The Relator explained the situation to NNS security, who concurred that the issue needed to be elevated to NNS Upper Management immediately. NNS Security recommended providing a written statement in their Security Report detailing the pressures by Trade and Engineering Management to accept the part and install it on the boat. NNS Security stated the written report would be investigated by a different entity and likely be seen by NNS Executive Management. 55. Unfortunately, the NNS Security Report, which is the second attempt at documenting and reporting unethical business conduct, was ?investigated? by Amarita Kim in HR, who again dismissed any and all claims that wrong-doing had occurred in E46, Trade Management, and Engineering. 56. Department E46 Management then sent an e-mail to SUBE stating E46?s choice of E12 and the Relator to invoke EB Spec 4520?s First Article Quali?cation requirement was ?out of scope,? therefore additional funding should be sought from the Government. Department E46 went on to claim that the Relator, E12, and SUBE were now adding ?new requirements? for the Chin Array with a TPAC boot that E46 had not planned for, which signi?cantly increased cost and extended the schedule to perform the work. The year before, however, Scott 23 Case Document 1 Filed 24 of 36 PageID 24 Mader of Department E46 sent an email dated Dec. 10, 2014, that attempted to persuade the NNS Program Of?ce (Torn Ward, Anna Yarashus, and David Vincent) to choose Department E46 to perform the work in lieu of a supplier to save costs. In the email, Mr. Mader stated that the TPAC installation on the Chin Array must be accomplished in accordance H576-1501 and EB Spec 4520, which requires First Article Quali?cation and approved procedures. Mr. Mader claimed that NNS Department E46 had already met all of the requirements of H576-1501 and EB Spec 4520, and that NNS would incur unnecessary additional costs to pay for a supplier to meet these requirements. This demonstrates that E46 knew of the requirements well in advance of the shift of the work from a quali?ed supplier to and despite E46?s new claim, the requirements were not added scope that had afterwards been imposed on them by E12 and the Relator. 57. Once it became apparent that did not hold even the bare-minimum quali?cation requirements for TPAC, the NNS Chief Engineer?s Of?ce ultimately persuaded Department E46 and X32 to perform First Article Testing in accordance with EB Spec 4520 and submit it to SUBE-Department E12 for Approval. EB Spec 4520 is applicable across all Submarine Programs (688 Class, SSN 21 Class, Ohio Class, and Virginia Class) for all TPAC applications and requires an entity seeking to perform that work to produce a sample of TPAC, provide all Objective Quality Evidence (OQE), perform an inspection of the sample, provide test results, and then develop processes and quality inspection procedures in accordance with MIL-I, prior to beginning production parts. 58. On August 27, 2015, Department E46 submitted a First Article PowerPoint presentation to SUBE-Department E12 for approval. Upon review of the document, SUBE noted that it included a photograph of a TPAC sample that was the same photograph of a sample 24 Case Document 1 Filed 09/26/19 Rage 25 of 36 PageID 25 previously submitted by a sub-contractor for quali?cation of their own TPAC Processor. When Department E12 requested to inspect the sample used for testing, Department E46 stated the sample had been thrown out. The Chief Engineer?s Of?ce deemed the Article presentation adequate and pressed the Relator to accept the document and grant quali?cation to Department E46. The Relator re?ised and questioned Department E46 if they had any prior experience with performing First Article Testing, because the presentation did not follow the requirements of EB Spec 4520 and included test results very similar to a sub-contractor?s ?rst article submission. With the Chief Engineers Of?ce and SUBE Department E12 Management as witnesses, Department E46 stated they had no prior experience performing First Article Quali?cation testing for Newport News Shipbuilding. 59. The relevant VCS DWG H576-1501 speci?cations relating to the TPAC for special hull treatment procedures are summarized in Table supra. In addition, EB Spec 4520 applies to the use of the TPAC when used for Incompressible Wedge Manufacturing, which is summarized in Table below. Table EB Spec 4520 TPAC Incompressible Wedge Manufacturing First Article Testing and Quali?cations Process and Inspection Procedures/System IAW MIL-I Recurring Quality Assurance Inspections E. Use 9f as Adhesive f9; Exterior Coating t9 Submarines 60. Although the utilization of the TPAC on the Chin Array was a new application of this product, Huntington Ingalls has also used the TPAC as an adhesive on the exterior of all of the Virginia-class submarines which they have delivered to the US. Navy as a means of bonding 25 Case Document 1 Filed 09/26/19pl3age 26 of 36 PageID 26 the exterior sound-absorbing material to the submarine. This is the same material discussed earlier which has been sloughing off the Virginia-class submarines since their inception. 61. In the process of reviewing VCS DWG H576-1501 speci?cations to determine if Departments E46 and X32 were applying the TPAC correctly to the Chin Array, Relator not only discovered that the Departments did not have proper quali?cations for application of the TPAC to the Chin Array, but also discovered that the Departments also did not have proper quali?cation for the utilization of the TPAC as a bonding agent for the exterior hull coating of the submarines either. In other words, the Relator discovered that under VCS DWG H576-1501, Huntington Ingalls was required to have undergone appropriate training and obtain applicable certi?cations for the application of the TPAC to the exterior of the submarines to adhere the exterior sheathing, and that they had failed to do so. Consequently, Relator discovered that Huntington Ingalls has improperly adhered all of the exterior coatings to all of the Virginia-class submarines. 62. This discovery of improperly-adhered exterior coatings occurred at the same August 28, 2015 meeting addressing the Quali?cation Presentation submitted to Engineering by Department E46 on behalf of Departments E46 and X32 to apply the TPAC to the Chin Array. The Chief Engineer?s Of?ce aggressively pressed the Relator, in front of the Relator?s management, to accept the fraudulent presentation that was submitted and to grant Department E46 approval and quali?cation to apply the TPAC. The Relator refused to accept the presentation and challenged E46 on the content. As stated earlier, at this meeting, E46 admitted that they had no prior experience with First Article Procedures, Testing, or Quali?cations at that time. 26 Case Document 1 Filed 09/26/19pRage 27 of 36 PageID 27 63. The Relator subsequently discovered that all Special I-Iull Treatment/Mold in Place materials require First Article Quali?cation prior to application on hull, approved material handling, application, and Quality Inspection Procedures, and an Applicator?s Training and Certi?cation Program. As a result, the entire Newport News Shipbuilding Program was not quali?ed to perform this work in accordance with H576-1501. 64. Shortly after the August 28, 2015 meeting, the Relator was contacted by his counterpart at Electric Boat and asked why the Design Yard was advised by the Relator?s management and E46 that the Relator was no longer ?working? on the Chin Array and that any and all future discussions on the subject shall be with his management only. The Relator?s Management then advised that the Chief Engineer?s Of?ce recommended that the Relator be demoted from his position as the System Expert with Technical Authority and sent to the yard to work on his ?engineering rigor? because he was adhering to the applicable requirements too strictly. 65. Speci?cally, in accordance with Speci?cation H576-1501, Newport News Shipbuilding is required to develop a ?rst article testing procedure, produce sample test articles, perform mechanical and physical property tests on said samples, demonstrate TPAC processing ability, and receive First Article Quali?cation from the Technical Authority prior to commencing production work on Virginia Class Submarines. Newport News Shipbuilding is also required to develop and maintain a training program that ensures that all of its personnel are educated and certi?ed to properly mix and apply the TPAC to the exterior of Virginia Class Submarines. Further, Newport News Shipbuilding is required to develop and maintain internal processing, handling, and Quality Inspection Procedures for all phases of TPAC, as well as production work. None of the aforesaid requirements as set forth by the Navy in accordance with 27 Case Document 1 Filed 09/26/19 pillage 28 of 36 PageID 28 H576-1501 have been met. Newport News Shipbuilding, however, has certi?ed in its payment applications that all and TPAC has been applied in compliance with H576-1501. 66. The TPAC, if utilized correctly, is highly effective, and upon information and belief, the exterior coatings of the Virginia-class submarines would not have failed if Huntington Ingalls had followed the applicable speci?cation standards during the application process. 67. Newport News Shipbuilding Quality Audit and Assessment Department (K93) that oversees internal Quality Assurance (QA) was directed to investigate and audit the group for compliance. K93 chose to exercise a ?Pulse Audit? of the trades while they performed a TPAC pour for VCS. Matt Shaffer from Department E46 attempted to block K93 from. accessing the shop by claiming K93 does not hold the necessary ?need to know? and OSHA requirements. After being advised that neither E46 or Trade Management have the authority to block QA from performing internal audits, K93 witnessed X32 prepare, mix, and pour the TPAC material. Within hours of witnessing the operations, K93 issued a Serious De?ciency Report (SDR) dated August 21, 2015 for Department failure to adhere to the invoked speci?cations for the application of TPAC and found that: While preparing for a comprehensive audit of TPAC processes, K93 Audit and Assessment noted that there is no objective quality evidence that speci?cation required ?rst article testing requirements have been performed for TPAC production processes. In addition K93 was unable to determine if there were NNS engineering prepared procedures in place. It was found that a speci?cation required inspection procedure had not been created. As such, K93 cannot conduct an audit until engineering has worked through a Plan of Action and Milestones to assure compliance with speci?cation and local procedural requirements. 28 Case Document 1 Filed 29 of 36 PageID 29 68. In addition to the SDR issued by Department K93, Mike O?Donnell, a Director at NNS, was also critical of Departments and X32?s ability to properly apply the TPAC. On August 27, 2015, Mike O?Donnell wrote an email to Matthew Holding, Thomas Osbourne, Willie Hayes, Scott Mader, John Zinskie, Ray Montgomery, Chandra McCulley-Hooker, and Dave Bolcar. In this email, Mr. O?Donnell indicated that: I consider the Hull Treatment (SHT) process as a current area of concern. This is not a hit on any one organization, it?s simply based on the number of method Corrective Action Requests (CARS) received in 2015, the progress of the investigations associated with the CARS and discussions with subject matter experts (including engineering, craftsmen, Electric Boat, and SUP SHIP NN), etc. My belief is that the customer (Navy) may be considering elevation to a method or method for this process. We have initiated our Area of Concern protocol and analyzed all CARS, Unplanned Events, QIMs, and Audits for the subject over the last two years to understand the scope and history of the problem, and are in the process of evaluating the causes and actions identi?ed and taken to address the known issues. 69. Mr. O?Donnell works completely separate from the K93 QA group that had already issued a SDR for the Program and Departments E46 and X32?s work. Likewise, an elevation to method by the Navy would constitute a very serious problem with construction. As a result, this email re?ects that the United States Navy was dissatis?ed about the work performed by the NNS group. This con?rms that two separate organizations at NNS had recognized that there were major defects in the work performed by Departments E46 and X32 related to the TPAC application in addition to the Relator?s observations concerning same. Despite the multiple people to which the email was sent, no corrective action was taken by NNS. 29 Case Document 1 Filed 09/26/19r-Rage 30 of 36 PageID 30 70. On October 8, 2015, the Relator?s personal cell phone was con?scated by NNS security. The Relator was advised by Amarita Kim in HR that the company believed the Relator to be a security threat because he had inadvertently left his cell phone in his personal car?s center console while driving in the yard after hours to support the trades. The company held the cell phone for four weeks and found photographs of the discrepant TPAC material applied to the hull 677D Fairing Cap, which were taken in a public place in Boston, MA while the part was having the TPAC removed. The Relator took the photographs and immediately forwarded them to NNS E12 management, as well as the Design Yard, because foreign and uncured material was found on the part that had been concealed by E46. HR had the photographs destroyed and the Relator was given a Final Written Warning and advised that he cannot seek another job within the company or be promoted for one (1) year. In addition, the Relator?s exemplary performance ratings of 3?s and 4?s for 2015 were changed to a rating of 1, as directed by Amarita Kim. The Relator has never received such a low rating in 15 years at NNS. 71. Upon further investigation, it became apparent to Relator that the continued failure of the exterior coatings for submarines delivered by Huntington Ingalls to the Navy has been a result of the failure of NNS to follow the proper speci?cations for the utilization of TPAC as an adhesive to bind the sound dampening material to the exterior of the submarines. This is consistent with the numerous reported problems on submarines that have been delivered by Huntington Ingalls to the Navy in the past. 72. Moreover, the quality problems associated with the exterior hull coatings continue to plague the Virginia Class Submarine Program as evidenced by the fact that the newest ship in the ?eet, the USS John Warner (SSN-785) endured numerous areas of PAC loss during her Bravo Sea Trials. The Warner recently returned to NNS in early March 2016 for her 30 Case Document 1 Filed 09/26/19 ,aRage 31 of 36 PageID 31 Post Shakedown Availability (PSA) and exhibits extensive amounts of lost surface treatments. The exterior hull coatings have come adrift or been completely ripped off the hull on the Sail, Fat Line Towed Array, and throughout the length of the hull. Most areas exceed 3 feet by 5 feet, with one area on the Starboard Side in excess of 15 feet by 15 feet. This is a direct result of either an improper mixture of PAC material or improper application with inadequate inspection techniques. 73. Contract numbers for the ships for which the TPAC was applied improperly to the hull are summarized in Table I. 74. The failure of the exterior coatings on the Virginia-class submarines as a result of the improper application of TPAC results in inef?cient performance of the submarines and loss of their sound absorbing exterior coating, thereby making the submarines easily detectable and placing them at risk during operations. Further, to the extent that the submarines can be detected by adversaries, it affects the strategic capabilities of the United States Navy, constitutes a risk to crew safety, and impacts the national security of the United States. 75. Each Virginia-class submarine historically costs about $1.8 billion dollars to construct, which is charged to the Navy. In December of 2008, the Navy signed a $14 billion dollar contract with Huntington Ingalls predecessor (Northrup Grumman) and General Dynamics to construct eight submarines, which constitutes the Block 111 submarines covering hull numbers SSN-784 through SSN-791. This is a $14 billion multiyear procurement. Upon delivery of these submarines by Huntington Ingalls to the Navy, Huntington Ingalls certi?ed that the exterior coating material was properly adhered to the hull with the TPAC product, when clearly it was not. 31 Case Document 1 Filed 09/26/19 pillage 32 of 36 PageID 32 IV. SEPARATE COUNTS TI Scheme to mitF dulent laims 1 U.S.C. 3 2 1 A 76. All allegations set forth in Paragraphs 1 through 75 of this Complaint are incorporated into this Count as if fully set forth herein. 77. As more particularly set forth in the foregoing paragraphs, by virtue of the acts alleged herein, the Defendants have knowingly presented or caused to be presented false or fraudulent claims for payment or approval in violation of 31 U.S.C. 3729(a)(1)(A). 78. The United States, unaware of the falsity of the claims made by the Defendants, and in reliance on the material fraudulent or false representations within the claims, approved, paid, and participated in payments that would otherwise not have been allowed or paid. 79. As a result of Defendants? acts, the United States has been damaged, and continues to be damaged, in a substantial amount to be determined at trial, and the United States is entitled to at least $5,000 and up to $11,000 for each and every violation of 31 U.S.C. 3729 arising from Defendants? unlaw?il conduct as described herein. C0 NTI Submission of Claims Containing False Express or Impligd Certi?cations [31 .C. 2 a 80. All allegations set forth in Paragraphs 1 through 79 of this Complaint are incorporated into this Count as if fully set forth herein. 81. As more particularly set forth in the foregoing paragraphs, by virtue of the acts alleged herein, the Defendants have knowingly made, used, or caused to be made or used, false records or statements the false certi?cations and representations made or caused to be 32 Case Document 1 Filed 09/26/19 Aage 33 of 36 PageID 33 made by defendant material to false or fraudulent claims in violation of 31 U.S.C. 82. The United States, unaware of the falsity of the claims made by the Defendants, and in reliance on the material fraudulent or false representations within the claims, approved, paid, and participated in payments that would otherwise not have been allowed or paid. 83. As a result of Defendants? acts, the United States has been damaged, and continues to be damaged, in a substantial amount to be determined at trial, and the United States is entitled to at least $5,000 and up to $11,000 for each and every violation of 31 U.S.C. 3729 arising from Defendants? unlawful conduct as described herein. CQUNT 11! False Cla84. All allegations set forth in Paragraphs 1 through 83 of this Complaint are incorporated into this Count as if ?illy set forth herein. 85. By means of the acts described above, Defendants knowingly conspired to defraud the United States by getting false or ?'audulent claims allowed or paid by the United States. 86. The United States, unaware of the falsity of the claims made by the Defendants, and in reliance on the material fraudulent or false representations within the claims, approved, paid, and participated in payments that would otherwise not have been allowed or paid. 87. As a result of Defendants? acts, the United States has been damaged, and continues to be damaged, in a substantial amount to be determined at trial, and the United States is entitled to at least $5,000 and up to $11,000 for each and every violation of 31 U.S.C. 3729 arising from Defendants? unlawful conduct as described herein. 33 Case Document 1 Filed 09/26/19 ?Aage 34 of 36 PagelD 34 QQUNT etal? tionA ain elator Ari Lawre Violat' nof 3 3:2301h) 88. All allegations set forth in Paragraphs 1 through 87 of this Complaint are incorporated into this Count as if fully set forth herein. 89. This is an action pursuant to 31 U.S.C. 3730(h). 90. By virtue of the activities described above, Relator Ari Lawrence has engaged in protected conduct under the False Claims Act. 91. Defendant, Huntington Ingalls Industries, Inc., was aware of Relator Ari Lawrence?s actions. 92. Defendant, Huntington Ingalls Industries, Inc., discriminated against Relator Ari Lawrence ?'om at least March 2015 through the present, in retaliation for his aforesaid conduct protected under the False Claims Act, as follows: By blocking Relator?s promotion from an E3 Senior Engineer to an E4 Project Engineer; by demoting Relator from his position as the System Expert with Technical Authority over the Chin Array and sending him to the ?yard? to work on his ?engineering rigor.? by falsely reporting Relator as a security threat and con?scating his cell phone; and by changing his exemplary performance ratings of 3s and 43 for 2015 to a rating of l, the lowest rating that Relator has ever received in the ?fteen years he worked at NNS, all of which retaliation and discrimination was directed by Amarita Kim of HR department. 34 Case Document 1 Filed 09/26/19 Rage 35 of 36 PageID 35 DEMAND FOR RELIEF WHEREFORE, Relator respectfully requests this Court enter judgment against Defendants as follows: A. That the United States be awarded damages in the amount of three times the damages sustained by the United States because of the false and fraudulent claims alleged within this Complaint, as the Civil False Claims Act, 31 U.S.C. 3729 et seq. provides; B. That civil penalties be imposed in the maximum amount for each and every false and fraudulent claim that Defendants presented to the United States; C. That pre- and post-judgment interest be awarded, along with reasonable attorneys? fees, costs and expenses which the Relators necessarily incurred in bringing and pursuing this action; D. That the Court grant permanent injunctive relief to prevent any recurrence of the False Claims Act violations for which redress is sought in this Complaint; E. That pursuant to 373 Relator be awarded the maximum percentage of the amount recovered by the United States as a result of this action; F. That Relator Ari Lawrence be awarded compensation for the retaliatory actions taken against him in violation of the 3730(h) in the following amounts; lost compensation based on the same seniority status as Relator would have had but for the retaliatory action; two times the amount of back pay; interest on the back pay; compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorneys? fees; G. That this Court award such other further relief as the Court deems just and proper. 35 Case Document 1 Filed 09/26/19p-Rage 36 of 36 PageID 36 DEMAND FOR JURY TRIAL Relator, on behalf of himself and the United States, demands a jury trial on all claims alleged herein. Respectfully submitted, MS John s. Vent\o,\Esq. (FB No. 329381) TRENAM LAW 101 E. Kennedy Boulevard, Suite 2700 Tampa, FL 33602 Telephone: 3-227-7483 V?inia State Bar No. 33148) Andrew J. Dean Virginia State Bar No. 88192 Florida State Bar No. 121808 PATTEN, WORNOM, HATTEN DIAMONSTETN, L.C. 12350 Jefferson Avenue, Suite 300 Newport News, Virginia 23602 Telephone: 757-223-4500 Facsimile: 757-249-1627 Email: ishoemaker@pwhd.com Pro Hac Vice Admission Pending Kenneth R. Yof (VSB No. 20549) C. Thomas Tur eville, Jr. (VSB No. 30641) YOF FY TU EVILLE, PLC 4805 Courthou Street Williamsburg, irginia 23188 Telephone: 757-259-0800 Email: kyoffy@mac.com Email: tomtlaw@mac.com Pro Hac Vice Admissions Pending 36 Case Document 1-1 Filed 09/2643.a Page 1 of 1 PageID 37 ?1544 (Rev- CIVIL COVER SHEET - The JS 44 civil cover sheet and the information contained herein neither re lace nor sugplernent the ?ling and service of pleadings or other tpapers as re%uired by law, except as proyided by local rules of court. This form, approved by the Judicial Conference 0 the United tates In September 1974, is required for the use of Clerk of ourt for the purpose of Initiating the civil docket sheet. (SEE INSTRUCTIONS ON THE REVERSE OF THE FORM.) I. PLAINTIFFS DEFENDANTS United States of America, ex rel. and Ari Lawrence Huntington Ingalls Industries, Inc., Huntington Ingalls Incorporated, and Northrop Grumman Corporation County of Residence of First Listed Plaintiff County of Residence of First Listed Defendant (EXCEPT IN U.S. PLAINTIFF CASES) (IN U.S. PLAINTIFF CASES ONLY) NOTE: IN LAND CONDEMNATION CASES, use THE LOCATION OF THE LAND INVOLVED. Attorney?s (Firm Name, Address, and Telephone Number) Attorneys (If Known) John S. Vento, Trenam Law, 101 E. Kennedy Blvd.,Ste. 2700, Tampa, FL 813-223-7474 II. BASIS OF JURISDICTION (Place an in One Box Only) CITIZENSHIP 0F PRINCIPAL an in One Box for Plaintiff (For Diversity Cases Only) and One Box for Defendant) RI I U.S. CI 3 Federal Question PTF DEF PTF DEF Plaintiff (U.S. Government Not a Party) Citizen of This State CI I Incorporated or Principal Place 0 4 CI 4 of Business In This State CI 2 U.S. Government CI 4 Diversity Citizen of Another State El 2 CI 2 Incorporated and Principal Place 0 5 Cl 5 (Indicate Citizenship ofParties in Item Ill) ?Bum? Am?he'sm? Citizen or Subject of a CI 3 Cl 3 Foreign Nation Cl 6 CI 6 Fore'g Country IV. NATURE OF SUIT (Place an in One Box Only) I CONTRACT TOBTS BANKRUPTCY OTHER STATUTES I I I0 Insurance PERSONAL INJURY PERSONAL INJURY . CI 6l0 Agriculture CI 422 Appeal 28 USC 158 CI 400 State Reapportionment 120 Marine CI 3 IO Airplane El 362 Personal Injury - Cl 620 Other Food Drug 423 Withdrawal MD Antitrust 130 Miller Act Cl 3l5 Airplane Product Med Malpractice CI 625 Drug Related Seizure 28 USC 157 C1 430 Banks and Banking CI I40 Negotiable Instrument Liability CI 365 Personal Injury - of Property 2 USC 881 CI 450 Commerce Cl I50 Recovery of Overpayment Cl 320 Assault, Libel Product Liability CI 630 Liquor Laws I PROPERTY CI 460 Deportation Enforcement of Judgment Slander CI 368 Asbestos Personal 0 640 RR. Truck [3 820 Copyrights CI 470 Racketeer In?uenced and Cl [51 Medicare Act CI 330 Federal Employers? Injury Product CI 650 Airline Regs. CI 830 Patent Corrupt Organizations Cl [52 Recovery of Defaulted Liability Liability Cl 660 Occupational CI 840 Trademark CI 480 Consumer Credit Student Loans 340 Marine PERSONAL PROPERTY Safety/Health 490 Cable/Sat TV (Excl. Veterans) Cl 345 Marine Product CI 370 Other Fraud CI 690 Other CI 8I0 Selective Service CI I53 Recovery of Overpayment Liability CI 37l Truth in Lending RI CI 850 Securitieleommodities/ of Veteran's Bene?ts CI 350 Motor Vehicle Cl 380 Other Personal CI 71? Fair Labor Standards CI 861 HIA (1395?) Exchange [3 I60 Stockholders? Suits CI 355 Motor Vehicle Property Damage Act Cl 862 Black Lung (923) CI 875 Customer Challenge Cl I90 Other Contract Product Liability CI 385 Property Damage CI 720 Labor/Mgmt. Relatiors 863 (405(g)) 12 USC 3410 I95 Contract Product Liability CI 360 Other Personal Product Liability CI 730 CI 864 SSID Title XVI 890 Other Statutory Actions CI I96 Franchise Injury Disclosure Act CI 865 RSI (405(5)) Cl 89l Agricultural Acts I REAL PROPERTY CIVIL RIGHTS PRISONER PETITIONS 740 Railway labor Act FEDERAL TAX SUITS CI 892 Economic Stabilization Act Cl 210 Land Condemnation 0 MI Voting 510 Motions to Vacate Cl 790 Other Labor Litigation CI 870 Taxes (U.S. Plaintiff CI 893 Environmental Matters Cl 220 Foreclosure CI 442 Employment Sentence 0 79I Empl. Ret. Inc. or Defendant) Cl 894 Energy Allocation Act CI 230 Rent Lease Ejectment Cl 443 Housing! Habeas Corpus: Security Act 0 87l IRS?Third Party CI 895 Freedom of Information Cl 240 Torts to Land Accommodations CI 530 General 26 USC 7609 Act 245 Tort Product Liability CI 444 Welfare I3 535 Death Penalty CI 900Appeal of Fee Detenrrination Cl 290 All Other Real Property CI 445 Amer. w/Disabilities - 540 Mandamus Other - r13Under Equal Access Employment Cl 550 Civil Rights 4w Justice Cl 446 Amer. w/Disabilities - 555 Prison Condition Cl ?950 Constitutionality of Other :5 State Statutes Cl 440 Other Civil Rights a: V. ORIGIN (Place an in One Box Only) Aig?e?ili? District Original Removed from Remanded from Reinstated or another district Mag te Proceeding State Appellate Court Reopened (specify) Litigation "3 Jud . the ..Civil Statu 'c are ftIin (Do not cite urisdictional statutes unless diversi 7? Cli?talse alarms Act - Si 5&28 et. ses. ty E. CAUSE OF ACTION Brief description of cause: IS an action under the False Claims Act ?53 VII. REQUESTED IN El CHECK IF THIS Is A ACTION DEMAND 5 CHECK YES only if demanded in complaint: COMPLAINT: UNDER F-R-C-P- 23 JURY DEMAND: Yes No RELATED IF ANY ?e JUDGE DOCKET NUMBER RECEIPT it AMOUNT APPLYING IFP JUDG MAG. JUDGE