In 1999 the Government began an investigation of Pratt and Whitney, a division of United Technologies, for over-charging on replacement parts for engines on the F-15 and the F-16 aircraft between the years 1985 and 1991. From this investigation it was determined that the cost of the excessive billing was $473 million without interest. Pratt Whitney strongly opposed the decision, but the Federal Court has supported the Government Claim. At this time it is still in the appeal process. However, when the case is finally settled, the original whistleblower stands to become a very rich man.
The pricing of spare parts is extremely difficult to establish what appears to be a fair price for all parties involved in the defense industry. The Government wants to minimize the spares they buy until they determine the actual usage rate and need. The contractor closes the production line and moves on to other products. Then when an order comes in, the contractor must reopen the production line and that costs a great deal of money. All parties are attempting to refine the process by better defining the life cycle needs early in the program.
In another case involving Pratt Whitney in 2012, they paid a $75 million fine for illegally exporting material to China, which was not authorized for export. Settlement with the whistleblower in this case is still pending, but it falls within the purview of the False Claims Act meaning the relator (or person who reported the fraud) is subject to recieving between $11 million and $22 million.
.pogo.org/blog/2013/06/20130619-defense-contractor-hit-with-ginormous-fraud-judgment.html