Rockwell Will Pay Government $23.6 Million

Rockwell International Corp. said it has agreed to pay $23.6 million to settle government charges that it overpriced its original B-1 bomber contract in 1981 by nearly $80 million.

Seal Beach-based Rockwell was awarded two contracts totaling $4.4 billion in 1982 to develop the bomber and build the first nine planes.

The government alleged that Rockwell failed to tell the government during negotiations in 1981 that changes in its corporate costs and a change in California law reduced the company’s costs of doing business, said Assistant Atty. Gen. Frank Hunger, head of the Justice Department’s civil division.

These cost reductions were not passed on to the government despite Rockwell’s specific agreement with federal authorities to do so, Hunger said.

The overcharging claim first surfaced in a 1985 Defense Contract Audit Agency report and has been in dispute since. The agreement was reached after the Justice Department informed Rockwell of its potential liability under the False Claims Act, which provides for triple damages and fines for overcharging the government, Hunger said.

The case was investigated by the Air Force’s Office of Special Investigations and the pricing branch of Wright-Patterson Air Force Base.

A spokesman for the aerospace and defense contractor said the money for the payment had already been reserved and that the settlement will not affect the company’s quarterly financial results.