Ford Aerospace to Pay $7 Million to Settle Billing Case

Defense contractor Ford Aerospace Corp. has agreed to pay a $7-million fine to settle civil claims that it submitted false bills to the Air Force for work on a sophisticated bombing system, the Justice Department announced Thursday.

The government alleged that Ford Aerospace, a Newport Beach-based subsidiary of Ford Motor Co., submitted false pricing information for three 1981 Air Force contracts for the so-called Pave Tack system.

Pave Tack is a laser-guided system that is mounted on fighter jets, enabling aircraft to more accurately guide missiles to targets.

The Defense Contract Audit Agency alleged that Ford officials certified and submitted false billing data during negotiations on the Pave Tack contracts that were “not accurate, complete or current.”

The inaccurate information could have led to possible overcharges on the Pave Tack contracts, the government alleged.

No Suspension Planned

Ford Aerospace contended that the Pentagon audit reports were erroneous, according to the settlement agreement announced Thursday. In the agreement, Ford admitted no wrongdoing. Under terms of the agreement, Ford Aerospace must pay the government $7 million within 30 days.

Ford said the Pentagon has told the company that it will not be barred or suspended from defense contracts as a result of the investigation.

In a brief statement, Ford Aerospace stressed that it had cooperated with federal investigators and said it is “committed to rigorous compliance with both the letter and spirit of laws and regulations applicable to contracts with the government.”

Ford Aerospace manufactures the Pave Tack system at its Aeronutronic division in Newport Beach.

In April, 1986, U.S. Air Force and Navy fighters equipped with the Pave Tack system carried out a bombing mission against targets in Libya. The systems cost $1.3 million each and are designed to allow jet aircraft to attack at low altitudes--even at night or in bad weather.