FOR IMMEDIATE RELEASE                                                   CIV
TUESDAY, DECEMBER 20, 1994                                   (202) 616-2765
                                                         TDD (202) 514-1888

     TWO MILITARY CONTRACTORS PAY U.S. $8.1 MILLION TO SETTLE DISPUTE

     WASHINGTON, D.C. -- Two military contractors will pay the
United States a total of $8.1 million to settle allegations they
mischarged the government on several contracts and failed to
provide the Air Force with information on equipment malfunctions
under another contract, the Department of Justice announced
today.  
     Assistant Attorney General Frank W. Hunger of the Civil
Division said the settlements with Fairchild Industries Inc. and
Fairchild Space and Defense Corporation resulted from an
investigation by the Office of Inspector General for the National
Aeronautics and Space Administration.  
     Fairchild Industries will pay the government $5 million on
behalf of its former division, Fairchild Control Systems Company. 
Fairchild Industries already has repaid the government $2,890.000
through contract adjustments.
     Fairchild Space will pay the United States $298,640 to
settle allegations concerning a malfunctioning device called a
"certifier" that tests the capacity of the fuel tank on the A10
airplane before take-off.  The government said Fairchild Space,
after discovering the part was not working properly, corrected
the problem, but did not tell the Air Force about it, then billed
the government for the replacement.  As part of the settlement,
Fairchild Space will give the Air Force replacement parts and
warranties.    
     The Department said Fairchild Control, while a division of
Fairchild Industries, inflated the amounts charged to NASA
contracts from 1982 through 1988.  NASA's investigators said
Fairchild Control mischarged engineering and manufacturing labor
as overhead and research and development; treated capital
investments as expenses; included accrued expenses in the current
year that were not subsequently paid; and charged unallowable
expenses into overhead expense accounts. 
     Fairchild Industries sold Fairchild Controls to AERO
Acquisition Corp. on August 25, 1989.  Fairchild Controls,
located in Manhattan Beach, California, was renamed Fairchild
Space & Defense Corporation in 1992.
     Neil Aliksanian, a former Fairchild employee, filed a qui
tam complaint July 13, 1988, in U.S. District Court in Los
Angeles against Fairchild Industries and Fairchild Control
Systems. Under the qui tam provisions of the False Claims Act, a
private citizen can file a suit on behalf of the government and,
if the government takes over the case and the prosecution is
successful, receive a portion of the civil claims. The government
intervened in the case June 30, 1989.  Aliksanian will receive a
total of about $600,000.    
                                   #####
94-718