Hughes Pays $1.29 Million to Settle Defense Contract Suit

Hughes Aircraft Co. has paid $1.29 million to settle claims that it mischarged costs for developing the M-1 tank’s infrared target simulator, the Justice Department said Wednesday.

The settlement includes $732,900 that Hughes had previously paid the Defense Department under the Pentagon’s voluntary disclosure program that encourages defense contractors to report possible civil or criminal fraud, the department said in a statement.

Hughes, a Los Angeles-based subsidiary of General Motors, made the payments to settle government claims that it had mischarged development and marketing expenses of the target simulator to Army contracts that did not provide reimbursement for such costs.

The agreement signed Monday also settles government claims that Hughes mischarged some labor costs, the department said.

In return, the Justice Department agreed not to file suit under the False Claims Act, which could have subjected Hughes to triple damages if the government had prevailed in court.