Lockheed Martin to pay $2M to settle C-130 fuel dispute in Marietta

C-130 cargo plane built by Lockheed Martin in Marietta.

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C-130 cargo plane built by Lockheed Martin in Marietta.

Lockheed Martin Corp. has agreed to pay $2 million for allegedly failing to reimburse the federal government for fuel usage at its Marietta plant that exceeded contractual limits, the government announced Friday.

The defense contractor would only acknowledge a settlement had been reached, and declined to go into details.

“Lockheed Martin has resolved the issues that led to this settlement and has no further details to add to those released by the U.S. Department of Justice,” spokeswoman Stephanie Stinn said in a statement to The Atlanta Journal-Constitution.

The U.S. Attorney’s Office in Atlanta said that between 2006 and 2013 the government allotted Lockheed 22,000 gallons of fuel per C-130 plane the contractor was building for the Air Force.

Once the allotment was exhausted on a particular aircraft, Lockheed Martin was responsible picking up the fuel cost.

A government investigation found that Lockheed Martin “routinely used fuel in excess of the 22,000 gallons, but failed to reimburse the government for the excess,” according to a statement issued Friday by Acting U.S. Attorney John Horn in Atlanta.

The defense contractor was also accused of using fuel earmarked for test flights and other related fuel needs for the C-130 program for unrelated projects, including some that were not government related.

Lockheed Martin employs 5,800 at the Marietta plant. In addition to work on the C-130, the plant produces the center wing assembly for three versions of the F-35. The assembly is then then shipped to Fort Worth, Texas, where the plane’s production is completed.

The Marietta plant also supplies the stealth coating on the fighter’s horizontal and vertical tails. The plant also modernizes the Air Force’s C-5 airlifter and builds wings for the P-3 Orion patrol aircraft.

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