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About POGO's Federal Contractor Misconduct Database (FCMD)
The government awards contracts to companies with histories of misconduct such as contract fraud and environmental, ethics, and labor violations. In the absence of a centralized federal database listing instances of misconduct, the Project On Government Oversight (POGO) is providing such data. We believe that it will lead to improved contracting decisions and public access to information about how the government spends hundreds of billions of taxpayer money each year on goods and services. Report an instance of misconduct »
BAE Systems
BAE Systems is the premier transatlantic defense and aerospace company delivering a full range of products and services for air, land and naval forces, as well as advanced electronics, information technology solutions and customer support services. With more than 100,000 employees worldwide, BAE Systems’ sales exceeded $28 billion in 2005.
Federal Contract $: $6876.3m
Total Number of Instances: 13
Total Misconduct dollar amount: $ 588.2m
- Annual Report
- Ethics Page
- Hoovers Profile
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- Press Page
- Subsidiary List
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- Website
Instances of Misconduct
1. Hornet Aircraft Components (False Claims Act)
Lockheed and BAE Systems settled allegations of violating the False Claims Act, 31 U.S.C. § 3729, et seq., in a contract to provide components for Hornet aircrafts. “The government alleged that from 1987 through 1994, GE and Martin Marietta manufactured and delivered for installation in Hornet aircraft more than 1,300 Accelerometer Sensor Assemblies that did not comply with electromagnetic interference contractual requirements.” See Lockheed Martin misconduct instance "Hornet Aircraft Components (False Claims Act)."... more»
2. SEC v. Wiener (Insider Trading)
The U.S. Securities and Exchange Commission (SEC) charged BAE Systems executive Daniel F. Wiener II with engaging in illegal insider trading in December 2007 by purchasing securities of MTC Technologies, Inc. prior to the public announcement that BAE Systems was going to acquire MTC. Wiener realized a profit of $67,687 when he sold his MTC shares a month after the acquisition was announced. Without admitting or denying the allegations in the complaint, Wiener agreed to pay disgorgement of $67,687, prejudgment interest of $8,323, and a civil penalty of $25,000.... more»
3. Defense Articles and Services Brokering Violations
BAE Systems plc and its business units and subsidiaries – except its U.S. subsidiary, BAE Systems, Inc. – entered into a civil settlement with the U.S. Department of State for alleged violations of the Arms Export Control Act (AECA) and the International Traffic in Arms Regulations (ITAR). The State Department alleged BAE committed 2,591 violations of the ITAR in connection with unauthorized brokering of U.S. defense articles and services, and that the violations were “systemic, wide-spread, and sustained for more than ten years.” Under the terms of a consent agreement, BAE agreed to pay $79 million in fines and remedial compliance measures. The State Department also denied, pending further review, the export license applications of BAE subsidiaries BAE Systems CS&S International, Red Diamond Trading Ltd., and Poseidon Trading Investments Ltd. In light of its 2010 criminal conviction (see BAE Systems instance, “Foreign Corruption Global Settlement”), the State Department imposed a statutory debarment (under section 127.7 of the ITAR) on BAE but concurrently rescinded it, finding that the company had taken appropriate steps to mitigate law enforcement concerns.... more»
4. EEOC v. BAE Systems Simula (Age/Sex Discrimination, Retaliation)
BAE Systems Simula, Inc. agreed to pay three temporary female workers $110,000 to settle sex and age discrimination claims under the Age Discrimination in Employment Act (ADEA), the Equal Pay Act (EPA) and Title VII of the Civil Rights Act. Laura Box, Margaret Chavez and Christine Hanson, who worked for Simula Inc.(acquired in 2003 by Armor Holdings, which was acquired by BAE in 2007), claimed that, during 2004 and 2005, they were paid less than male employees who performed the same duties and were not given permanent jobs. Chavez also claimed age discrimination and Box alleged retaliation. BAE Systems Simula, which did not admit liability, paid compensatory damages in the amount of $40,000 to Chavez, $63,000 to Box, and $7,000 to Hanson. The company also agreed to implement policies and training programs aimed at ensuring a work environment free from sex and age discrimination and retaliation.... more»
5. OSHA Violations at Sealy, Texas Facility
The U.S. Department of Labor's Occupational Safety and Health Administration (OSHA) cited BAE Systems with 16 alleged serious and two alleged repeat violations of health and safety regulations at the company's facility in Sealy, Texas, and proposed $138,000 in penalties. Serious violations included failing to ensure walking working surfaces remained clear, failing to provide safe clearances for material handling equipment, failing to provide machine guarding and violations related to the control of hazardous energy, welding and electrical hazards. Repeat violations included failing to guard press brakes and to ensure compressed air used for cleaning had pressures reduced below 30 psi.... more»
6. Lancashire Factory Explosion
BAE Systems Land Systems (Munitions and Ordnance) Ltd. pleaded guilty to violating a U.K. occupational health and safety law for an explosion at its Lancashire factory in March 2005 that killed one worker. Investigators could not determine the exact cause of the explosion but found the company allowed unsafe working procedures to develop at the site by providing too little supervision and monitoring. In addition to the guilty plea, BAE was ordered to pay £118,000 (approx. US$192,000) towards the cost of the prosecution and was fined £80,000 (approx. US$130,000) by the Health and Safety Executive.... more»
7. HMNZS Canterbury Settlement
The government of New Zealand reached a NZ$84.6 million (approx. US$59 million) settlement with BAE Systems to fix problems with the multi-role ship HMNZS Canterbury. The Canterbury has had issues with its rigid hull inflatable boats, and a court of inquiry found various design flaws.... more»
8. Air Quality Violations (Maricopa County, Ariz.)
BAE Systems, which owns three armored vest production factories in Phoenix, Arizona, was fined $1.2 million by the Maricopa County Air Quality Department for the release of toluene, a glue solvent, into the air and for other violations. The violations occurred between 2004-2006, when the factories were owned by Simula, Inc., a subsidiary of Armor Holdings, Inc. Armor Holdings was acquired by BAE Systems in July 2007. A spokesperson for BAE Systems told the local press the company became aware of Simula's violations when it conducted an emissions audit of the factories a few months before the acquisition.... more»
9. Foreign Corruption Global Settlement
In June 2007, the U.S. Department of Justice launched a Foreign Corrupt Practices Act (FCPA) investigation into allegations that BAE Systems, using American banks, made up to $2 billion in secret payments to the former Saudi Arabian ambassador to the United States, Prince Bandar bin Sultan, in the years after securing a multi-billion dollar arms deal with Saudi Arabia (the al-Yamamah deal). In February 2010, BAE entered into a settlement with the Department of Justice and the UK Serious Fraud Office (SFO), which launched an investigation in 2004 of alleged bribery by BAE in Saudi Arabia and other countries. Under the agreement with the Department of Justice, the company pleaded guilty to one charge of conspiring to make false statements to the U.S. government in connection with certain regulatory filings and agreed to pay a fine of $400 million. Under the agreement with the SFO, the company pleaded guilty to one charge of breach of duty to keep accounting records in relation to payments made to a former marketing adviser in Tanzania and agreed to pay a penalty of £30 million (approx. US$47 million) consisting of a fine and a charitable payment for the benefit of Tanzania. In December 2010, BAE Systems pleaded guilty in the SFO investigation to not keeping proper payment records and was ordered to pay a £500,000 (US$775,000) fine and £225,000 (US$348,750) in legal fees.... more»
10. EEOC v. BAE Systems (Disability Discrimination)
The Equal Employment Opportunity Commission (EEOC) alleged BAE Systems Tactical Vehicle Systems violated the Americans with Disabilities Act (ADA) when it fired Ronald Kratz II because of his weight. The EEOC alleged that Kratz was able to perform the essential functions of his job but was denied a “reasonable accommodation” so he could continue performing his duties. In July 2012, the lawsuit settled with BAE agreeing to pay Kratz $55,000 and provide him with six months of outplacement services.... more»
11. Meyer v. BAE Systems (Retaliation)
Former Marine Sgt. Dakota Meyer claimed that his supervisor at BAE Systems OASYS retaliated against him after he raised objections when he heard that BAE was allegedly planning to sell advanced thermal optic scopes to Pakistan. He also claimed the supervisor defamed him and tortiously interfered with his attempt to find another job. In December 2011, it was reported that Meyer dropped his lawsuit pursuant to a confidential settlement.... more»
12. Discriminatory Employment Eligibility Verification Process
The Justice Department reached a settlement with BAE Systems Ship Repair Inc. to settle allegations that its subsidiary, BAE Systems Southeast Shipyards Alabama LLC, engaged in a pattern or practice of discrimination by imposing unnecessary and additional documentary requirements on non-U.S. citizens when establishing their eligibility to work in the United States. The government alleged that since at least January 1, 2009, BAE Southeast Alabama imposed different and greater requirements in the Form I-9 employment eligibility verification process on lawful permanent residents as compared to U.S. citizen employees. BAE agreed to pay $53,900.... more»
13. Wales Health and Safety Breaches
It was reported that the Wales Health and Safety Executive (HSE) fined BAE Systems Land Systems (Munitions and Ordinance) Ltd. £50,000 (USD$ 88,954) and ordered it to pay £15,000 (USD$ 26,692) in costs and £5,000 (USD$ 8,897) in compensation for health and safety breaches for an incident in which an employee was injured handling hazardous material at its site in Glascoed, Monmouthshire in August 2004. HSE found that the disposal procedures did not comply with BAE's own approved control procedures, and that management and supervision of the procedure was inadequate.... more»
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