Appeals court revives false claims suit vs. Lockheed

Thu Aug 2, 2012 2:30pm EDT

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(Reuters) - A U.S. appeals court revived part of a false claims lawsuit against Lockheed Martin Corp over a U.S. Air Force contract for space launch operations.

The ruling on Thursday came from the 9th U.S. Circuit Court of Appeals. The contract concerns software and hardware used to support launch operations at Vandenberg Air Force Base and Cape Kennedy.

In an emailed statement Lockheed said it was disappointed by the court's decision. "We believe the case lacks merit and we will vigorously defend ourselves against this frivolous lawsuit," the company said.

Nyle Hooper, a former Lockheed employee, sued the company in 2005 and accused it of defrauding the government by knowingly underbidding for the contract on the Air Force's so-called "RSA IIA" program.

Lockheed's final bid was $432.7 million, according to the 9th Circuit ruling. But another Lockheed employee provided evidence that company employees were instructed to lower their estimates without regard to actual costs, the ruling said. The company won the contract.

A lower court had resolved the case in favor of Lockheed before trial, but the 9th Circuit revived Hooper's claims on underbidding and wrongful termination.

The appeals court affirmed Lockheed's judgment on other claims in the lawsuit, including one over allegations of defective testing procedures.

The case in the 9th Circuit is Nyle Hooper v. Lockheed Martin Corporation, 11-55278.

(Reporting By Dan Levine; Editing by Gerald E. McCormick and Carol Bishopric)

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