Retired Worker Says TRW Defrauded Air Force

TRW’s Redondo Beach-based Space and Defense Sector inflated its bids and double-billed the Air Force on a series of classified contracts between 1982 and 1990, a retired TRW manager has charged in a recently unsealed federal whistle-blower lawsuit.

Frank M. Breene, the plaintiff, brought the charges in an amended complaint filed under the federal False Claims Act this past June, but the allegations were sealed while the Justice Department studied whether to join the case against TRW. A federal judge lifted the seal in recent days before the Justice Department could reach a decision, said Dean Francis Pace, Breene’s attorney.

The suit, filed in federal court in Los Angeles, alleges that TRW submitted false bids on the secret programs and falsely allocated costs in its contract proposals on the series of contracts. The company management submitted those false charges to the Air Force in an “intentional” act and against a request by Breene that actual accounting figures be used, the suit charges. The suit seeks nearly $20 million in treble damages under the False Claims Act.

The suit does not lay out the precise accounting mechanics of how TRW allegedly falsely bid and billed the work.

In general, under a defense contract, a firm must allocate contract costs to a variety of special accounts, only some of which are fully reimbursed by the government. In addition, federal acquisition rules require that all work performed under a contract be paid only from funds in that contract.

The allegations brought by Breene involve complex ratios for allocating costs, covering production, support, labor and planning.

The contracts are identified in the suit only by unclassified sales numbers. The TRW unit produces a variety of highly classified systems, including spy satellites designed to listen to foreign telephone and radio communications.

TRW spokesman Julian Levine said in response to the allegations: “The company was aware of this suit and cooperated with the Justice Department in their review of it. We believe the suit is frivolous and totally without merit.”

Breene was a hardware acquisition manager at TRW, Levine said. He could not be reached Wednesday.