Whistleblower Case Against Defense Contractor Settles For Over $850,000

Washington, D.C. December 15, 2009. Whistleblower Jerry W. Gibbs, now deceased, of Mary Esther, Florida, has won a rare victory over a defense contractor accused of double billing the government. Recently, an out of court settlement was reached between the United States government, Mr. Gibbs’ widow and Manufacturing Technology, Inc. (MTI) in the amount of $758,000, plus $96,000 for attorneys’ fees, to resolve a qui tam False Claims Act case that Mr. Gibbs filed on behalf of the United States in federal court in Washington, D.C. against MTI. See U.S. ex. rel. Gibbs v. M TI, et al., Civil Action No. 05-344 (D.D.C.) (RWR). The False Claims Act required that this case be filed under seal and the court recently lifted the seal on the case after approving the settlement.

Mr. Gibbs alleged on behalf of U.S. taxpayers that MTI, of Fort Walton Florida, falsely billed the Air Force for work it did to develop a data base product for commercial use.

Unfortunately, Jerry Gibbs died on December 15, 2008 after a long illness, more than three years after he filed his case.

Under the settlement, Mr. Gibbs’ estate and his wife, Barbara Gibbs, are to receive a percentage share of the settlement, plus attorneys fees. Most of the settlement money goes to the U.S. government.

Mrs. Gibbs said, “I have always been very proud of Jerry’s commitment to excellence. His intent was to do the best possible job for our government, and for the women and men who serve on our behalf. I believe that his persistence and hard work to ensure prevailing in this suit illustrates his dedication to our country and its citizens.”

“This case shows how the qui tam provisions of the False Claims Act can be used to fight many kinds of abuses by contractors. We are excited to see a settlement that vindicates Mr. Gibbs’ allegations, but we very much regret that Mr. Gibbs was not able to see this day,” said David K. Colapinto, attorney for Mr. Gibbs.

Jerry Gibbs was the key executive who initially developed a database product that tracks electronic computer parts or “chips” used in Air Force systems. Mr. Gibbs conceived the idea of making a commercial application of this parts management tool as well. Then Jerry Gibbs became the classic insider/whistleblower. Based on his experience working for the company he claimed that MTI was billing labor to government contracts for work being done to develop the product for private commercial use. The Department of Justice investigated Mr. Gibbs’ allegations for about four years before reaching a settlement. Mr. Gibbs met numerous times with the government and provided his expertise to explain his allegations against MTI. His health and his career suffered, but he continued to work with the government to help the investigation that led to this settlement.

“Hopefully, Jerry’s legacy will be that defense contractors will not be able to double and triple bill the government so easily in the future,” said Mr. Colapinto.

Background Information on Mr. Gibbs

Jerry Winfield Gibbs graduated from the University of Tennessee with a Bachelor’s Degree in Electronic Engineering in 1959. He was a Research Assistant in the MSEE Graduate program at the University of Tennessee from 1960 to 1961, focusing on Electronically Scanned Circular Arrays.

He began his career with RCA in 1961, assuming video design responsibility for NIMBUS and Ranger satellites. Upon joining Honeywell he participated in digital accelerometer and guidance system design. With both technical and sales and marketing expertise, Mr. Gibbs began his long career in the emerging semiconductor and integrated circuit industry with ITT. He went on to hold strategic marketing and marketing and sales positions with national and international corporations such as National Semiconductor, Teledyne Semiconductor, Zilog and Northern Telecom.

The last fifteen years of Mr. Gibbs’ career drew on his in-depth knowledge of the semiconductor industry from its inception when he defined and designed AVCOM. Originally a DMS (Diminishing Manufacturing Sources) tool for the F-15 group at Warner-Robins Air Force Base, it ultimately became the Air Force standard for DMS parts management. Mr. Gibbs participated in the DMS Program development for the F-15 beginning in 1990 and was a member of the DMS Integrated Product Team (IPT). He was an active participant in the DMS community, regularly contributing to conferences and committees and presenting papers on both national and international levels. Building on the success of AVCOM, Mr. Gibbs conceived Total Parts Plus, a commercial version of the powerful Air Force parts management tool.

Mr. Gibbs is survived by his three children and four grandchildren, and by his wife, Barbara.