ALBANY, N.Y. (NEWS10) — Industrial Equipment and Supply Company, LLC (IESC) of Latham have agreed to pay $75,000 to resolve allegations that they violated the False Claims Act for selling counterfeit batteries to the federal government on a contract valued at $33,928.60. The contract required that the batteries be manufactured by SAFT America, Inc. and fit a standard military specification, but the batteries instead caused malfunctions.
The Defense Logistics Agency (DLA) is the Department of Defense’s (DoD) combat logistics support agency, which manages the DoD’s supply chain. They offer consumable supplies to DoD components all over the world. DLA distributed the batteries throughout its supply system. IESC obtained batteries from an unauthorized distributor in Singapore. They later received reports that the batteries caused military equipment failures. DLA subsequently determined the batteries were counterfeit.
“Our military received counterfeit batteries after a contractor cut corners to increase profits,” said United States Attorney Freedman. “We will continue to use the False Claims Act to hold government contractors accountable when they do not meet contract requirements.”
This settlement resolves the United States’ allegations that IESC violated the False Claims Act by disregarding a risk that the batteries would be counterfeit when it acquired batteries from an unauthorized distributor in Singapore, who offered a lower purchase price than an authorized SAFT distributor would have.