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Bollinger, DOJ settle false-claims lawsuit over hull strength of cutters

Feb 26, 2016 04:26 PM
Matagorda was among the U.S. Coast Guard cutters elongated by Bollinger Shipyards in an ill-fated project that ultimately resulted in the company agreeing to a settlement over the exaggerated hull strength of the refurbished vessels.

Courtesy U.S. Coast Guard

Matagorda was among the U.S. Coast Guard cutters elongated by Bollinger Shipyards in an ill-fated project that ultimately resulted in the company agreeing to a settlement over the exaggerated hull strength of the refurbished vessels.

Late last year, Bollinger Shipyards agreed to pay the federal government $8.5 million to settle a False Claims Act lawsuit alleging the shipbuilder misrepresented the hull strength of modified patrol boats.

The suit, dismissed by a federal judge in 2013 but revived by the U.S. 5th Circuit Court of Appeals in 2014, alleged that at least eight of the Coast Guard’s patrol boats were unseaworthy after Bollinger, in renovating hulls, misstated their resistance to bending. The Lockport, La.-based company was contracted in 2002 to renovate 49 patrol boats by extending their length from 110 feet to 123 feet. In July 2011, the Justice Department filed a suit saying Bollinger falsely reported its hull-strength calculations to the Coast Guard.

Claims resolved by the December 2015 settlement are allegations only, with no determination as to liability, the Department of Justice (DOJ) said.

Bollinger began delivering the modified vessels to the Coast Guard in 2004 and did the conversions into 2006. The DOJ alleged that Bollinger misrepresented the cutters’ strength after the hull of Matagorda, the first one delivered, buckled at sea in September 2004.

The suit said the shipbuilder gave the Coast Guard strength calculations that were two times greater than their true values, and that Bollinger didn’t disclose that its numbers relied on thicker hull platings. Bollinger did its engineering math three times and gave the Coast Guard the highest and most inaccurate of the three outcomes, the DOJ alleged, adding that if the builder had followed contracted quality-control procedures, it wouldn’t have miscalculated.

In 2007, Rep. Elijah Cummings, D-Md., chairman of a congressional oversight committee, said that Bollinger should return $100 million in federal funding because of its erroneous math. But in 2013, U.S. District Judge Sarah Vance in New Orleans dismissed the federal suit, saying the government had failed to show that the company’s errors were intentional. In response to that suit, Bollinger said that it had acknowledged its errors previously and had addressed them through hull modifications.

In December 2014, a 5th Circuit Court of Appeals panel in New Orleans ruled that the company had given its highest calculations to the Coast Guard. The panel also cited emails from Bollinger executives who were worried about hull strength. “Based on the facts set out in the complaint, one may reasonably infer that Bollinger acted in reckless disregard of the truth or falsity of the measurements,” the appellate ruling said.

When asked for its reaction to the DOJ settlement, Bollinger didn’t respond to Professional Mariner. Attorneys at Wiley Rein, a Washington, D.C., firm representing the company in the suit, also had no response.

In the DOJ’s December 2015 announcement, Deputy Assistant Attorney General Benjamin Mizer said, “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.”

Meanwhile, Bollinger continues to build for the Coast Guard. In December 2015, the company delivered Winslow Griesser, its 16th fast response cutter. The company is also one of three, along with Eastern Shipbuilding in Florida and General Dynamics’ Bath Iron Works in Maine, vying for contracts to build all or some of 25 offshore patrol cutters that the Coast Guard seeks. The agency hopes to award a contract by late fiscal year 2016 and wants to procure its first cutter in that series by FY 2017. The new vessels are needed because the Coast Guard’s 50-year-old medium endurance cutters no longer have much working life.

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