Rockwell International

ROCKWELL INTERNATIONAL, the largest contractor working with the National Aeronautics and Space Administration (NASA), was indicted in 1991 for over-billing the U.S. government for space[Page 698] shuttle repair and production work. It marked the fourth time in a decade that Rockwell was accused of mischarging the government. The company pleaded guilty in two of the earlier cases and agreed to an injunction against submitting false claims to the government in the third.

The NASA case involved allegations that Rockwell's Collins avionics operation, based in Cedar Rapids, Iowa, inflated records of the amount of time spent on NASA contracts by padding employee time cards and sending the agency false bills. The Cedar Rapids grand jury indictment charged the firm with 15 counts of conspiracy, mail, and wire fraud, and failed to specify when the alleged conspiracy took place, but suggested it started by 1979 and continued at least through August 1987. Two individuals were also indicted, one a current Collins manager and one a former Collins manager, who allegedly told employees to “soak the shuttle,” “hose NASA,” and “fix the numbers.”.

The government suspended the Collins division from obtaining further government contracts because of the unit's indictment, but the Air Force soon lifted its suspension in the belief that Rockwell took a number of actions to prevent a recurrence of the false billings. NASA continued to investigate. Rockwell then agreed in 1992 to pay $1.4 million as part of a compliance agreement with the government to drop charges. It could have been fined as much as $7.5 million.