Thursday 22 December 2011


Inferior metal used on Navy subs

Search under way for affected boats as fraud charges are leveled against Pennsylvania firm
The Navy is searching for metal used in submarines that fails to meet military specifications and was supplied by a Pennsylvania contractor who recently pleaded guilty to one count of major fraud against the U.S. government.

In a statement provided to The Day, the Navy called the fraud "calculated and widespread."
The search has so far cost the government more than $1.3 million, and the Navy said it may take years to determine the scope of the problem.

The Navy did not respond to a question about the safety implications, saying only that the service is "committed to ensuring the safety of its crews and ships."

Bristol Alloys Inc. and its president, James Bullick, admitted in court last week to selling metal that had not been heat-treated to be used in Virginia-class submarines to meet the contract's requirements. Heat treatment is used to make metal stronger. The company also admitted that it provided counterfeit certifications that the metal had been treated.

The major fraud charge dealt with parts and materials associated with Virginia-class submarines, but many classes of submarines and the aircraft carrier Gerald R. Ford (CVN 78) are also affected, according to the Navy.

"The fraud perpetrated by Bristol Alloys, Inc. and Mr. Bullick was both calculated and widespread," according to the Navy's statement. "Implications from Bristol Alloys, Inc. and Mr. Bullick's scheme to defraud the government have the potential to take years to fully investigate, inspect and adjudicate."
Bullick faces a maximum sentence of 10 years in prison and a $5 million fine at his sentencing on Jan. 31, according to the Office of the U.S. Attorney for the Eastern District of Pennsylvania. The company also faces a possible $5 million fine.

Assistant U.S. Attorney John J. Pease, the prosecutor in the case, said Tuesday he plans to ask the court at the sentencing to require restitution for the cost of locating the metal and replacing parts.
Dozens of examples of metal supplied by Bristol that does not meet military specifications have been found in Navy ships in the past year, Pease added. He could not say how many ships were involved since the effort to find where the metal has been used is ongoing.

Electric Boat in Groton and Northrop Grumman Shipbuilding in Virginia build Virginia-class submarines under a team agreement.

EB referred all questions about the case to the Navy.

Northrop Grumman purchased various metal components from Garvey Precision Machine Inc. in New Jersey, a company that had bought metals and other parts from Bristol Alloys, a metal and steel parts broker.

Bristol Alloys created numerous fraudulent heating-test certifications supposedly issued by another company instead of complying with the Navy's requirements in the purchase orders from Garvey from about 2004 to the fall of 2009, according to court documents. Garvey paid Bristol about $500,000 during that time, with much of that money paying for the metal that did not meet the specifications, Pease said.

Piston tailrods, which indicate fluid capacity and align piston travel, were made using this metal, according to U.S. District Court documents.

Bristol also provided counterfeit certified material test reports for metal used to make other parts in the hydraulic system as well as other components, the documents state.

EB found problems with the material certification reports in the spring of 2009 and asked Garvey to evaluate the products it supplied for the submarine program. Northrop Grumman also investigated the problem that summer.

Bristol refused to provide EB and Garvey with the original copies of the mechanical and heat test reports, the documents state. Garvey stopped doing business with Bristol, and Northrop Grumman informed the Navy of the discrepancies in October 2009.

Agents from the Naval Criminal Investigative Service searched the Bristol Alloys building in Fairless Hills, Pa . The Navy is working with both shipbuilders to determine the impact of the scheme.

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