Supplier delivered bad steel to Navy for subs, say court documents

The Navy’s top supplier of steel to build submarines gave the service inferior metal for years, prompting a nearly $10.9 million settlement, the Justice Department said in court filings released on Monday.

Bradken Inc., based in Kansas City, Mo., paid the settlement to resolve allegations that the company “produced and sold substandard steel components for installation on U.S. Navy vessels” after a Bradken employee “knowingly falsified test results to conceal the fact that the components did not meet the Navy’s specifications,” according to a department statement.

“When government contractors supply our armed forces with equipment that fails to meet performance standards, they not only cheat taxpayers, they also potentially put our service members at risk,” Jody Hunt, the assistant attorney general for the department’s civil division branch, said in the statement. “Today’s settlement demonstrates our commitment to ensuring the military receives products that enable it to perform its critical mission.”

The Associated Press first reported on the court filings.

Bradken provides steel castings to Navy contractors Electric Boat and Newport News Shipbuilding, which use the high-yield steel to make submarine hulls. In 2017, the company discovered that the director of metallurgy at its foundry in Tacoma, Wash., had been falsifying metal strength test results, claiming that nearly half of the steel Bradken produced for Navy submarines met the service’s requirements when it didn’t.

The company’s internal controls were unable to identify the hundreds of falsified test results, the Justice Department said.

The United States further accused Bradken of charging shipbuilders for the steel parts as if they were normal when they were not, causing the shipbuilders to invoice the Navy for defective parts.

There are no allegations of submarine parts that have failed due to the inferior steel, but the court claims that the Navy had to pay higher maintenance costs to make sure its submarines are seaworthy. The filings did not say which vessels were affected.

Meanwhile, the foundry’s previous director of metallurgy, Elaine Thomas, was charged with one count of major fraud against the United States.