Suit Claims Natel Falsified Test Results

Natel Engineering, a Simi Valley defense contractor, has been sued by the Justice Department and a whistle-blower alleging that the firm falsified testing on electronic circuits produced for combat aircraft, military satellites and tank turrets.

The suit, filed in U.S. District Court in Los Angeles, alleges that Natel failed over a 10-year period to subject sophisticated electronic components, known as hybrid circuits, to rigorous tests involving high temperatures and long durations of use.

“We are denying all the charges,” Natel President Sudesh Arora said Friday. “I can assure you 100% our company produces the highest-quality products. We have the highest reliability of anybody in the industry and the lowest return rate. Obviously, if these allegations were true that could not be the case.”

The suit, brought by a former testing supervisor at Natel under the federal False Claims Act, was originally filed in June, 1990, but was served on the firm only last week. The suit remains under court-ordered seal.

The suit cites potential damages of $50 million, which could be tripled under the False Claims Act. The former testing supervisor who brought the suit, Glenn A. Woodbury, could share in any damages.

The Justice Department decided last June to join in the case, but its participation had not been disclosed.

Apart from the civil case, a federal grand jury is believed to be investigating the company. The civil suit, a copy of which was provided to The Times, says that the FBI has been probing the case.

An FBI official in Ventura said he could not comment on an existing investigation.

Woodbury alleges in the suit that most, if not all, of the special electronic circuits produced by Natel are falsely certified as having undergone tests required by the Defense Department.

Woodbury worked at Natel for six months in 1987. He claimed in an interview with The Times last year that he lost his job after reporting to management that many circuits failed tests he personally performed.

Arora said that Woodbury was a “disgruntled employee who is trying to make charges that are not true.”

The devices at issue are known as hybrid circuits. They are densely packed electronic devices the size of a matchbox. Natel’s hybrid circuits are used to convert signals involved in the positioning of weapons, such as the control of aircraft wing flaps, gun turrets and satellites.

The complaint asserts that Natel produced about 10,000 hybrid circuits per month, at an average cost of $1,000 but ranging as high as $10,000. Military purchases of $6 million to $7 million a month accounted for 60% to 70% of the company’s output.

The tests specified by the Pentagon require that the circuits be subjected to temperatures from subzero to higher than boiling. Then the circuits are supposed to be shaken violently. And the circuits are supposed to be electrically powered for seven to 10 days.

A final test involved the use of a desktop computer to ensure the circuit functioned properly. The suit alleges that Natel created a software program that would falsely show that a circuit passed tests when in fact it had failed.

William Ramsey, an attorney representing Woodbury, said it was unknown whether any Natel circuits failed during military missions. In an interview last year, Woodbury told The Times that many of Natel’s customers were dissatisfied with the circuits and that 567 of the units were returned by a distributor in one instance.

Woodbury claimed that he independently began testing the circuits and found a high failure rate, which he reported to his superiors. A week later, he said, he was told that his position was being abolished.