Lockport-based Bollinger Shipyards has agreed to pay the U.S. government $8.5 million to settle claims that it misrepresented the strength of eight patrol boats it lengthened for the Coast Guard that buckled and failed once they were put into service.
The U.S. Department of Justice filed a lawsuit in 2011 against Bollinger that sought unspecified damages under the federal False Claims Act. Bollinger was paid about $78 million under the contract, which the government wanted repaid.
“Those who expect to do business with the government must do so fairly and honestly,” said Benjamin Mizer, head of the Justice Department’s Civil Division. “We expect the utmost integrity and reliability from the contractors that design and build equipment that is essential to public safety and our national defense.”
The contract was tied to the Coast Guard’s $24 billion Deepwater Program, which sought to modernize the agency’s aging infrastructure, including helicopters, planes and ships.
In 2002, the Coast Guard contracted with Bollinger to lengthen its fleet of eight 110-foot patrol boats to 123 feet and make other modifications. As part of the work, the modified vessels needed to have enough longitudinal strength to meet certain performance benchmarks, but a Coast Guard investigation later determined that the shipbuilder had overstated the hulls’ strength.
The Justice Department alleged in the lawsuit that Bollinger knowingly submitted bad information about the vessels’ structural strength.
The hull of the first restructured vessel buckled in 2004 after it was delivered by Bollinger. All eight patrol boats were later taken out of service.
Bollinger’s attorney, Roderick Thomas, did not immediately respond to a request for comment Wednesday.
The settlement’s resolution did not include a determination of liability, according to the federal government.