plaintiff's first amended complaint and exhibits filed 8 5 09 - olsen f-22

8/14/2019 Plaintiff's First Amended Complaint and Exhibits Filed 8 5 09 - Olsen F-22

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Sikorsky Aircraft Pays $2.9 Million to Settle False Claims Act Allegations,

available at http://www.usdoj.gov/opa/pr/2009/March/09-civ-273.html (last

visited July 18. 2009). The United States alleged that from 1991 to 2006,

Sikorsky knowingly installed armored plates . . . that had not been ballistically

tested as required under the contract. Id. "This settlement sends a message that

fraud, especially when it concerns the safety of our men and women in uniform,

cannot and will not be tolerated in Government contracts," said Michael F. Hertz,

Acting Assistant Attorney General for the Department of Justices Civil Division.

"As demonstrated here, the Department . . .[is] committed to rooting out such fraud

and prosecuting it." Id.1

On behalf of the United States of America, Relator Darrol O. Olsen

(Olsen) files this Plaintiffs First Amended [qui tam] Complaint, pursuant to

Federal Rule of Civil Procedure 15(a)(1)(A) against defendant LOCKHEED
http://www.usdoj.gov/opa/pr/2009/March/09-civ-273.htmlhttp://www.usdoj.gov/opa/pr/2009/March/09-civ-273.html


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the United States Air Force (USAF) during production of the "F-22 Raptor" (F-

22).

I. PRELIMINARY STATEMENT

1. In 1991, Lockheed entered into a contract with the USAF to produce

the F-22.

2

StealthRADAR and visual non-observability--is a core feature of

that aircraft. The entire aircraft is designed around that feature. Numerous

components of the F-22 contribute to its planned stealth design, such as the

fighters contours and the coatings applied to its skin. The low observable

(LO) coatings applied to the F-22 are integral to its stealth, pilot safety, and

mission accomplishment. Lockheed emphasizes the importance of very low

observable stealth to the F-22 in materials such as the brochure attached hereto as

Exhibit A, downloaded on July 15 30, 2009 from Lockheeds web site at

http://www.lockheedmartin.com/data/assets/corporate/press-kit/F-22-Brochure.pdf.
http://www.lockheedmartin.com/data/assets/corporate/press-kit/F-22-Brochure.pdfhttp://www.lockheedmartin.com/data/assets/corporate/press-kit/F-22-Brochure.pdf


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knowingly use defective coatings. Based upon third-party reports, it appears that

the defective coatings have not been remedied through the present date, and that

Lockheed has never fully disclosed the low observables system defects to the

USAF.

3. Moreover, during the September 1995 through June 1999 period,

Lockheed misrepresented to the USAF that the coatings were passing stealth tests

and, thus, meeting contract specifications. In addition, Lockheed actively

concealed the stealth coatings failures from the USAF. For example, Lockheed

management often directed Olsen not to speak with the USAF about the coatings

problems. Indeed, on numerous occasions when Olsen protested the use of the

failed coatings and stated that Lockheed had to tell the USAF about the problems,

Lockheed manager David Trawinskis response was, Stay out of it." On one

occasion when Olsen objected to wasting money by purchasing more of the same


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4. All that mattered to Lockheed was that the USAF thought that the

coatings were satisfactory, and that the F-22 program was timely proceeding so

that the USAF would continue to pay Lockheeds progress and milestone bills. On

information and belief, Lockheed continued to misrepresent and conceal the

problems with the F-22's coatings through at least October 2004 and likely to the

present date.

5. In effecting its fraud, Lockheed falsely certified that the coatings were

meeting stealth tests and, thus, meeting contract specifications, in order to get paid.

Lockheed made those certifications when presenting the progress bills and

milestone bills for payment to the USAF. In doing so, Lockheed presented false

claims to an agency of the United States for payment in violation of 31 U.S.C.

3729(a)(1)(A), (B), and (G), or former 31 U.S.C. 3729(a)(1)(2) and (7).

6. Further, on information and belief, since the entire F-22 is designed


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incurred by the USAF due to Lockheeds conscious or reckless use and application

of known defective stealth coatings.

7. Relator brings this lawsuit for damages suffered by the United States,

including principal, interest and penalties as a result of Lockheeds false and

fraudulent practices which violated the False Claims Act.

II. PARTIES

8. Relator Darrol O. Olsen is a Materials and Process Engineer

specializing in composites and low observablesstealthmaterials. Olsen was

employed in various capacities by Lockheed for a total of 18 years. 4 Because of

his expertise in stealth technology, Olsen worked from September 1995 to July

1999 on the F-22. In particular, Olsen worked nearly exclusively on the F-22's

coatings, which are essential to that fighters stealth capability. Olsen lives at

15205 South 4160 Road, Claremore, OK 74017.


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76108. (Lockheed Martin Corporation and its business unit(s), including LMAC,

are collectively referred to as Lockheed.)

III. JURISDICTION AND VENUE

10. This is an action to recover damages and civil penalties on behalf of

the United States for defendants violations of the False Claims Act, 31 U.S.C.

3729 et seq. under the 1991 contract between Lockheed and the USAF, an

agreement which continues through this date.

11. The FCA provides the United States District Courts exclusive

jurisdiction for actions brought thereunder.

12. Section 3732(a) provides that, "Any action under section 3730 may be

brought in any judicial district in which the defendant . . . can be found, resides,

transacts business, or in which any act proscribed by section 3729 occurred."

Lockheed, through its business unit LMAC, is the prime contractor for the 1991


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be extended. 31 U.S.C. 3730(b)(3). If the United States declines to intervene,

the Relator can proceed on the governments behalf. 31 U.S.C. 3730(b)(4).

IV. FCA'S SUBSTANTIVE PROVISIONS

14. Section 3729 of the FCA provides:

(a) Liability for certain acts.

(1) In general. Subject to paragraph (2), any person who--

(A) knowingly presents, or causes to be presented, a

false or fraudulent claim for payment or approval;

(B) knowingly makes, uses, or causes to be made or

used, a false record or statement material to a false

or fraudulent claim;

* * *

(G) knowingly makes, uses, or causes to be made or


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is liable to the United States Government for a civil penalty of not less

than $5,000 and not more than $10,000, as adjusted by the Federal

Civil Penalties Inflation Adjustment Act of 1990 (28 U.S.C. 2461

note; Public Law 104-410), plus 3 times the amount of damages

which the Government sustains because of the act of that person.

31 U.S.C. 3729(a)(1)(A), (B), and (G) (As amended May 20, 2009,

FRAUD ENFORCEMENT AND RECOVERY ACT OF 2009, 111 P.L. 21

4(a); 123 Stat. 1617 [S. 386]).5

15. Pursuant to Section 3729(b)(2) of the FCA, a "claim":

(A) means any request or demand, whether under a contract or

otherwise, for money or property and whether or not the United

States has title to the money or property, that--

5


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(i) is presented to an officer, employee, or agent of the

United States; or

(ii) is made to a contractor, grantee, or other recipient, if the

money or property is to be spent or used on the

Government's behalf or to advance a Government

program or interest, and if the United States

Government

(I) provides or has provided any portion of the money

or property requested or demanded; or

(II) will reimburse such contractor, grantee, or other

recipient for any portion of the money or property

which is requested or demanded; and

(B) does not include requests or demands for money or property


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31 U.S.C. 3729(b)(2) (As amended May 20, 2009, FRAUD

ENFORCEMENT AND RECOVERY ACT OF 2009, 111 P.L. 21 4(a);

123 Stat. 1617 [S. 386]).6

V. REGULATIONS

16. Government contracting is controlled by the Federal Acquisitions

Regulation (FAR) promulgated by the Federal Acquisition Regulatory Council. 41

U.S.C. 421(c)(1). FAR sets forth the requirements binding the executive

agencies of the United States and all contractors that provide goods and services to

those agencies. 48 C.F.R. 1.101 et seq. Defendants violations of the FCA

specifically involve defense contracting, making relevant the Defense Federal

Acquisition Regulation Supplement (DFARS), promulgated by the Department of

Defense (DoD). 41 U.S.C. 421(c)(2); see also 48 C.F.R. 201.301(a) (DoD

implements and supplements the FAR through the DFARS).


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a) 48 C.F.R. 52.212-4(q) ("the Contractor shall comply with all

applicable Federal . . . laws . . . and regulations applicable to its

performance under this contract.");

b) 48 C.F.R. 52.212-4(a) ("The Contractor shall only tender for

acceptance those items that conform to the requirements of this

contract.");

c) 48 C.F.R. 52.246-1 ("the Contractor is responsible for

performing . . . all inspections and tests necessary to

substantiate that the supplies or services . . . conform to contract

requirements . . . .");

d) 48 C.F.R. 52.212-4(o) ("the Contractor warrants and implies

that the items delivered hereunder are merchantable and fit for

use for the particular purpose described in this contract."); and


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manner consistent with the need to fulfill the production

plan]).7

18. Similarly, on information and belief, Lockheed certified as required

by 48 C.F.R. 52.232-5(c) in each progress bill that:

I hereby certify, to the best of my knowledge and belief, that

(1) The amounts requested are only for performance in

accordance with the specifications, terms, and conditions

of the contract; . . . . 8

19. Further, on information and belief, each progress bill submitted by

Lockheed to the USAF for payment was subject to certain other regulations,

including, but not limited to:

a) 48 C.F.R. 52.232-16(a) (each progress payment will not be

more frequently than monthly and will be computed "as 80% of


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b) 48 C.F.R. 53.301-1443 (Form 1443: certifying that a progress

bill had been prepared "in accordance with" the subject

contract, "work reflected [in the progress bill had] been

performed" and "the quantities" of work done were "consistent

with the requirements" of the subject contract); and

c) 48 C.F.R. 52.232-16(c) (Contracting Officer "may reduce or

suspend progress payments" for the Contractors "failure to

comply with any material requirement of [the] contract").

20. On information and belief, upon purportedly achieving contract

milestones (or subparts thereof), Lockheed submitted milestone bills to the USAF

for payment that contained certifications similar to those required for progress

bills.

VI. FACTS


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22. After active duty, Olsen returned to his clerical position at Lockheed

from 1975-79, with educational leaves of absences. In 1979, Olsen received a B.S.

in biosciences with a minor in chemistry.

23. In 1979, Lockheed hired Olsen as an engineer in Research

Engineering at its Burbank, California facility. There, Olsen performed R&D on

items supporting numerous programs,

24. Olsen worked in the nonmetallics (or composites) materials area in

research and development. In this capacity he developed new, advanced

composites materials (nonmetallics) and processes. Among other responsibilities,

he performed numerous types of materials testing. Olsen worked on new, state-of-

the-art technologies for existing and future programs.

25. From 1982-88, Olsen worked for Northrop Grumman Corporation

(Northrop). Olsen was assigned to the F-18 fighter and the B-2 stealth bomber,


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27. In 1990, Olsen once again took a job with Northrop, focusing full-

time on the B-2 at the B-2 production facility in Palmdale, California.

Subsequently, he performed work at Edwards Air Force Base for B-2 flight tests.

Olsen worked on all stealth aspects of the B-2, including the LO coatings system

and repairs, composites structures, all materials and processes, testing, RCS issues

and diagnostics including off-site RCS testing, and research and development.

28. Olsen became an Engineer Specialist at Northrop. Due to his work

experience, Olsen had become a recognized expert on stealth coatings. While

Northrop had roughly 10,000 employees assigned to the B-2 program, only about

20 had Olsens level of knowledge about stealth materials. In fact, Northrop chose

Olsen out of approximately 3,000 engineer-candidates to be its Military Corporate

Field Representative and Advisor to the USAF on the B-2's stealth coatings,

advanced composites materials, repairs, all materials and processes, and on other


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Northrops integrity in ensuring the B-2's stealth, when he witnessed a radically

different attitude and conduct upon returning to Lockheed.

B. The F-22's Background

30. In the early 1970s, the USAF began studying concepts for an

Advanced Tactical Fighter (ATF) to replace the F-15. The ATF concept would

evolve into the F-22. After a concept investigation phase, the USAF requested

proposals for the F-22 design in the autumn of 1985. Seven aerospace defense

contractors responded, including Lockheed. Each contractor was required to

include in its proposal a description of its stealth skills and experience.

31. Prior to selecting the winning design, the USAF suggested that the

contractors form teams so that the best industry expertise could be brought to bear

on such a technologically challenging project. Lockheed, Boeing and General

Dynamics formed one team. The Lockheed group agreed that each contractor


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assigned the work, giving itself the lions share. Lockheed assumed responsibility

for most of the F-22's stealth capability, including the coatings.

C. The 1991 Lockheed Contract

33. On information and belief, Lockheed and the USAF in 1991 entered

into a fixed price contract that required Lockheedsubject to USAF approval and

consistent with the contract specificationsto deliver 648 F-22s at a cost of $86.6

billion or about $134 million per fighter.10

34. On information and belief, Lockheed submitted a certification with

the 1991 contract attesting that it would comply with the "Statement of Work,"

which was part of that agreement, including all low observables engineering

specifications. On information and belief, the "Statement of Work" set forth the

requirements for reflectivity (RCS signature) and reparability, among other

specifications.11


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35. Further, on information and belief, Lockheed certified in the 1991

contract that it would comply with all applicable laws and regulations, including

those set forth in the Section V, supra.

D. The Importance of Stealth to the F-22

36. Stealth capability is a core feature of the F-22. The purpose of stealth

is to prevent the aircraft from being detected by ground-to-air or air-to-air

RADAR. The entire F-22 is designed around its stealth capability.

37. The observability of an aircraft by RADAR is referred to as its

RADAR Cross Section (RCS) or RADAR signature. The F-22's RCS should, at

most, indicate to a RADAR sender or yield a RADAR signature about the size of a

bumblebee.

38. The key to stealth is to minimize the RADAR return to the RADAR-

emitting source either by conducting, dissipating and reflecting the RADAR wave


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39. The F-22's design requires the use of electrically conductive coatings

on its skin to conduct, dissipate and reflect away or absorb the RADAR waves.

40. In addition, RADAR absorbing material (RAM) is also used on the

F-22 to absorbrather than reflectRADAR waves; RAM component materials

include metallic particles that absorb electrical energy. RAM is typically applied

to "hot spots" on the structure and structural flex points, such as around antennas

and vertical supports.

41. The F-22 requires several different LO coatings to be applied to theskin of the aircraft. The initial F-22 requirement was for three primary layers of

coatings to be stacked together (before other LO materials were applied) in the

following order: The first coating is a primer designed to smooth and seal the

surface of the skin and promote adhesion of the second, conductive coating. The

second coating is a conductive coating consisting of metallic flakes intended to


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weight severely impacts the F-22 and obstructs its mission capabilities by

impacting its range, speed, maneuverability, and its overall performance for

combat capabilities.

43. The proper functioning of the coatings and their respective repairs are

absolutely essential to the F-22's stealth capability. If not all coatings and their

repairs are effective, the stealth measures of the aircrafts design are negated,

resulting in serious compromise to the radar cross section. The F-22 then becomes

a highlighted target.

E. 1995-2004: Continuous and Undisclosed Coatings Problems

44. In September 1995, Olsen returned to Lockheed in the Materials and

Processes Engineering Group in Marietta, Georgia as a Senior Engineering

Specialist, the highest engineering grade below management. Olsen eventually

reported to Supervisor Richard Morrison and Manager David Trawinski. The


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materials, their respective repairs, the effects of defects, assist in the collection of

RCS data for the SAS database, develop standard repairs specifications (these

documents would become the Air Force technical manual specifications in the

field), and formally validate and verify the F-22 Low Observables System to the

U.S. Air Force.

46. By late 1995, Olsen observed that the conductive coatings providedby CAAP CO. had significant widespread and visible problems, such as:

1. inconsistent batches (viscosity and weight inconsistency);2. clumping of metallic flakes;3. metallic flakes not binding and resulting in separating from the paint resin;4. paint resin with improper chemistry remaining soft;5. abrading damaged conductivity; and6. water or jet-related fluids damaged the coatings properties and RCS


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resulting in significant RADAR cross section impacts. Olsen learned that those

coatings had not been formally tested according to industry protocols to thoroughly

identify their properties and verify acceptability for production.

47. The normal stages of formal testing are:

1) Lockheeds Engineering Testing Laboratory (ETL)

tests the coatings viscosity, weight and composition.

Additionally, ETL applies coatings to panels and checks

materials properties; including, but not limited to,

conductivity, thickness and smoothness;

2) Lockheeds RCS department tests reflectivity and

reparability by directing RADAR at the coatings on 6' x

3' football panels.12 Additionally an RCS signature is

captured at this point.


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testing from the compact range. RCS oversees the tests

and interprets the data.

4) RCS department tests reflectivity and reparability of the

coatings on mock-up sections of the F-22;

5) RCS department tests the reflectivity and reparability of

the coatings on an F-22 in a hanger; and

6) RCS department tests the reflectivity and reparability of

the coatings on an F-22 during ground and flight tests at

Edwards Air Force Base.

Under no circumstances should testing proceed to a subsequent stage if the

coatings have not passed the preceding stage. As Olsen would soon learn,

Lockheed paid no heed to that fundamental protocol.

48. In February 1996, Olsen directed that formal testing commence


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repairs. For repairs, ETL would use the spray repair method or the brush/roller

repair method on damaged areas of the CAAP CO. and Boeing coatings. If the

original baseline coatings met required specifications, repairs using the same

coatings should have met the designated RCS signatures and other specifications.

49. Olsen witnessed each 1996 test. The repairs failed every time. The

initial baseline coatingsbefore any repairfailed by giving heightened RCS

signatures. In addition, coatings visibly degraded when exposed to fluids, such as

aircraft fuel, cleaning solvents and even waterto all of which an operational F-22

would routinely be exposed, destroying the conductivity resulting in unfavorable

RADAR signature impacts. The coatings also disfigured when touched. In

addition, repairs to those coatings failed. For instance, the repaired coatings

registered heightened RCS signatures as bad as the damaged, unrepaired coatings.

Despite those first-stage failures, Morrison and Trawinski directed, improperly,


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51. On occasion, USAF personnel would attend the weekly, or other,

meetings; Lockheed knew when Air Force personnel would attend. On some such

occasions, a weekly meeting was specifically designed to mislead the Air Force by

a charade or false demonstration. When Air Force personnel attended meetings,

Morrison and Trawinski instructed Olsen not to speak with the USAF; nor did

Lockheed management disclose anything negative about the baseline coatings

materials. Rather, if discussing the coatings at all, Lockheed management falsely

reported to the USAF that the coatings were satisfactory and that any problems

were repairable.

52. Lockheed continued to order defective coating materials from CAAP

CO. and Boeing. Notably, and contrary to industry standards, Lockheed had no

back-up materials to consider as substitutes for the failing materials.

2. 1997: The Cycle Continues


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media has reported that F-22 adhesivesthe glue intended to bind RAM to the

aircrafthave separated at engine inlets and been ingested into the aircraft

causing damage to or destroying engines of as many as 30 of the fighters. As the

project fell further behind schedule and tests were failed or skipped and test results

falsified, Mr. Olsen was forced to sign off on incomplete or completely blank F-22

Standard Repair Specifications. For instance, an aircraft accident investigation

report released March 27, 2008 indicated the separation of a six-by-eight-inch

piece of low observable material ingested into the right engine of an F-22 at Nellis

Air Force Base, Nevada on November 1, 2007 caused extensive damage to the

engine, totaling about $1.2 million. The separated piece included several layers of

coatings, which detached from the engines inlet during takeoff. This caused

pieces of first-stage engine fans to break away, causing additional damage to the

engine. The report cited the use of adhesives with poor cohesive strength and lack


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54. Olsen expressed concern to Morrison and Trawinski that problems

with the CAAP CO. and Boeing coating materials and the low observables

materials system could not be corrected. Large orders of multiple batches for all

LO materials were purchased numerous times, but were not tested due to the

failures of the initial coatings, resulting in most of those materials expiring on the

shelf and then being discarded by special HazMat handling and disposal teams.

Olsen was ordered to stay the course. Further, Morrison and Trawinski

reemphasized that Olsen was never to discuss the coatings problems with the

USAF. Indeed, they instructed Olsen to have no communications at all with the

USAF.

55. On information and belief, Lockheed wanted to isolate Olsen and his

written and vocalized concerns about the coatings. On numerous occasions when

Olsen told Morrison and Trawinski that the coatings were failing, he was told to:


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Olsen) for an award due to purportedly demonstrating that "the brush and roll

restoration process meets the RCS requirements," and Lockheed presented this

award at a ceremony on November 11, 1997. See Exhibit B, 11/27/97 Brush

and Roll Repair Paint Team Memo from Trawinski to N.F. Kavanaugh.

However, the restoration process did not, and it never had met RCS requirements.

57. Just two weeks earlier, Olsen had informed Lockheed management of

the failing conductive coatings test results from the engineering laboratory:

1) The resin system shows dissolution with light wiping using the

[CAAP CO. conductive coating] spec cleaning solvent . . . .

2) Metal flakes do not bind to the resins system. Flakes are easily

removed when wiped with a cloth or abraded.

3) Light abrading with very fine sandpaper/polishing abrasives

remove the surface metal and affects electrical/RCS properties.


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concerned that the coatings and repairs were working, when they were

actually in a complete failure mode. In fact, five months later, Morrison

instructed Olsen to start over the process, for which Lockheed had given

Olsen the award, because the process continued to fail. See Exhibit D,

3/26/98 Smart Silver Paint Repair Plan Memo from Morrison to

Olsen.

58. On information and belief, the USAF attended the award ceremony.

Olsen was present, as required, but he refused to participate in the sham ceremony,

declining to go forward to accept the award.

59. Sham awards notwithstanding, the stealth coatings project continued

its failures.

3. 1998: "No One Cares. We've Got to Meet Milestones."

60. The coatings problems did not abate. On information and belief,


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61. In early 1998, Olsen was directed to make a large order of all Low

Observables materials in sets of about 10 to 20 each, to support the

S.M.A.R.T Low Observables Testing Program. Olsen went to Trawinski to

again press his concerns about the inability of the initial first coatings to

satisfy the contract specifications. Trawinskis response was: "No one cares.

We've got to meet the milestones. Olsen was ordered to purchase these

massive amounts anyway. In other words, Trawinski was only interested in

the flow of payments from the USAF and the appearance of timely project

progress.13 Olsen stated he would make these purchases only if ordered to

do so. Trawinski said, That is an order.

62. Olsen persisted. In a March 1998 meeting with Morrison and

Trawinski, Olsen told them that: "If you dont allow me to fix it [the coating

problem by replacing the vendors], then a year from now the plane will be in the


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addition to continuing to order, purchase and test materials Lockheed knew had

and would continue to fail, Lockheed ordered and purchased costly, short shelf-life

low observables materials prematurely in order to provide misleading documentary

support for false progress and milestone claims. That is, even though Lockheed

had not progressed to the stage where it needed these materials, and even though

the shelf life of the materials would expire before Lockheed was ready to use

themif ever, Lockheed ordered and purchased such materials in order to falsely

appear to have reached the milestone accomplishment.

63. As part of the LO materials protocol, Lockheed was required to

Validate and Verify the reparability of the LO materials. This protocol,

generally, required that the repairs be successfully conducted under laboratory

conditions twenty (20) times in sequence, without a single failure. When Air Force

representatives attempted to repair LO defects, they consistently failed in their


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64. On July 2, 1998, ETL issued another test report of coatings failures on

football panel tests.15 Olsen wrote a note on the report and forwarded it to

Morrison: "Rich- Another report showing flake loss & resin softening. Does this

bother you? Morrison responded: "No - because RCS of repair OK & Yes -

because we need to soak a spot on football panel w/topcoat & measure RCS. See

Exhibit F, 7/2/98 Testing of Lot OP-91 5PTMRL04 __ Paint, SEM

Evaluation Memo from L.M. Campbell to Olsen. Besides misstating what the

report showedthe RCS of the repairs were not OKMorrison did not address

the basic problem that the coatings were bad out of the suppliers drums. Repairs

to a coating are made with the same coating material. The problems with the

coatings were the coatings themselves, not application processes. Thus, repair

applications of the same bad coatings could not remedy problems with the bad

coatings, which had failed all materials testing. An obvious solution was to look


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recounted that: "Per Rich Morrisons direction, I have asked RCS Engineering to

determine how much degradation to the coating electricals is acceptable. Their

response was no degradation can be permitted. See Exhibit G, 8/11/98

Engineering Test Lab Results on 5PTMRL04 TY-1 Conductive Paint Memo

from Olsen to Trawinski and Morrison. Rich Morrison had directed Olsen to

ask RCS Engineering to reduce the RCS signature requirements below contractual

requirements, so that the Low Observables materials would appear to pass.

Morrison wanted to modify the RCS requirement so that the failing coatings and

repairs would pass. Instead of using a Low Observable material that performed as

intended and required, Morrison wrongfully pressured RCS Engineering to change

the RCS signature [test] requirement so the failing, defective LO materials would

falsely appear to be within specifications.

66. Notwithstanding the consistent stream of failures and the lack of


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L.O. Maintainability Group Brush/Roll Status, Presentation, Rich

Morrison. Morrisons presentation showed the coatings meeting requirements

with optimized products, and passing most tests. Afterwards, Olsen spoke with

Ryan and Michael and asked how Morrison could report that the coatings were

passing. They jointly responded that they were going to "let Morrison hang

himself".

67. As they had before, the coatings failed after that meeting. CAAP

CO.s conductive coating remained inconsistent in makeup, weight, viscosity and

visual characteristics from batch to batch. Metallic flakes clumped together.

Rubbing with a soft cloth abraded the conductive coating, released the metallic

flakes, destroyed the coatings electrical properties and left a gummy resin. F-22

specification cleaning solvents, jet fuel, cooling fluids, water, and other liquids all

similarly damaged the coating. Boeings topcoat coating was unstable as to its


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such a conclusion was false, and not supported by the test. Morrison told him: "It

is all political, stay out of it."

69. No matter how many tests were performed or at what stage they were

performed, the coatings continued to fail tests. In a December 9, 1998, work

schedule entitled "[redacted] Paint & Topcoat Repair Schedule - No. 13", Olsen

noted that "BASELINE COATINGS FAILED RCS RANGE TESTING" AND

"[redacted] PAINT MATL. PROBLEMS. ALL TESTING ON HOLD FOR

TESTING OF PRODUCTION MATL." See Exhibit I, 12/09/98 __ Paint and

Topcoat Repair Schedule No. 13.

70. On information and belief, throughout 1998, Lockheed continued to

defraud the USAF about the coatings failures to keep progress and milestone

payments flowing, and continued to convey the misimpression that the F-22 was

making timely progress in the stealth coatings issues. In fact, rather than moving


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the same failing results. See Exhibit K, 2/4/99 5PTMRL04 TY-1 __Paint

Repair History. A February 11, 199 schedule directly shows that the F-22 L.O.

baseline coatings and repairs continued to fail all tests. See Exhibit L, 2/11/99

__ Paint and Topcoat Repair Schedule No. 15. Indeed, the coatings failures

were so undeniable that even a Trawinski schedule entitled "F-22 [redacted] Paint

Implementation," dated April 1, 1999, records numerous failed tests. See Exhibit

M. On information and belief, Lockheed never shared those failed test results with

the USAF.

72. In 1999, Lockheed began using more conductive coatings from its

LMAC business unit. By June of that year, Lockheed ceased using the CAAP CO.

conductive coating altogether. On information and belief, the problems with that

defective product had become so obvious that Lockheed believed that it could not

hide its failures any longer.


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pounds to an aircraft designed to be ultra-light, in which mere ounces can make a

significant difference. Moreover, with reparability failures unabated, additional

layers of primers and other coatings dramatically increase reliability and

maintainability (R&M) problems. Unsurprisingly, the media have reported, at

least as late as 2006 that R&M man-hours and materials for the aircrafts crucial

low observables characteristics have increased to as much as three times acceptable

rates.

74. In an attempt to make the conductive coating work, Lockheed

increased its thickness, adding, on information and belief, 200 pounds to the

aircraft. This new, thicker conductive coating was also found to be easily damaged

by fluids and therefore, was over coated with several layers of primer (which did

not meet engineering requirements), adding even more weight.

75. Until Olsen took medical leave in July 1999, the CAAP CO.


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ever truthfully disclose to the USAF that the coatings were defective, rendering the

stealth attribute a failure.

76. In addition, the LO materials contained hazardous chemicals

forbidden by the contract and by law, and such hazardous materials were handled

irresponsibly and even illegally. The composition of LO materials contravened

the F-22 contract, because they contained Diisocyanate chemicals which were not

permitted by the contract.16 Isocyanates are harmful to living tissue. They are

16Diisocyanates are a group of low-molecular-weight aromatic and aliphatic

compounds. The most common of these are toluene diisocyanate (TDI),methylene bisphenyl isocyanate (MDI), and hexamethylene diisocyanate (HDI). .. . They are widely used in the manufacture of flexible and rigid foams, fibers,coatings such as paints and varnishes, and elastomers. Diisocyanates areincreasingly used in the automobile industry, auto body repair, and building

insulation materials. In this report, diisocyanates as a group will be referred to asisocyanates. . . .

TDI and other isocyanates are powerful irritants to the mucous membranes


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toxic and exposure is known to result in hypersensitivity pneumonitis as well as

occupational asthma in humans, both through inhalation exposure and dermal

contact. Mr. Olsen was ordered to keep this fact secret from the Air Force, as the

violation could lead to cancellation of the contract by the Air Force.

77. In addition, hazardous materials were handled illegally. On

information and belief, throughout the complete LO testing program, Morrison and

Trawinski had numerous coatings shipments delivered to their homes and those of

other employees. This was done to avoid any unexpected governmental inspection

or discovery of the receipt and use of those defective, toxic materials.

Management secretly circumvented the Lockheed company HazMat building

which housed and controlled all toxic, controlled materials, thus avoiding

documentation of Lockheeds receipt, its entry of the toxic substances in its books,

and its assignment of the required company tracking and control of hazardous

materials. Olsen refused to participate in that scheme which violated an assortmentof company policies and relevant laws dealing with dangerous, toxic substances.

78 I f M i i f d Ol f h f h h h d d


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HazMat LO coatings shipments would be delivered to Olsens home. Olsen

immediately refused to participate in the illegal scheme and insisted that Morrison

call and stop shipments to Olsens home. Morrison responded that Olsen was not

a team player, and if youre not a team player you can be replaced. Morrison

continued to have the toxic HazMat LO materials sent to his own and other

employees homes. When they received the illegal materials, they smuggled them

past the Lockheed company security guards and stored them in the engineering

offices of the F-22 engineering building.

79. The conductive coating had been modified numerous times and as a

result was no longer in conformance with the Lockheed HazMat material control

regulation requirements; the initial assigned Lockheed company HazMat control

number was thus void, making this a nonconforming toxic HazMat material inside

Lockheed Corporation facilities. In addition, the toxic HazMat LO materials were


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in the emission of the toxic HazMat LO materials chemicals into the air, exposing

countless people in the company and surrounding community to dangerous air.

Lockheed management knew of the unlawful presence of mercury and

diisocyanates and mercury in th4 components of the L.O. materials. Lockheed

management concealed the unlawful presence of these controlled chemicals from

the USAF, Lockheed employees, and the surrounding communities. Lockheed

concealed this information because its disclosure would have resulted in the

shutdown of the F-22 program, enormous expense, and significant delaylikely

years.

80. At no time during Olsens tenure at Lockheed did he see any

indication that Lockheed informed the USAF about low observables baseline

coatings failures or repairs failures. Further, during Olsens tenure at Lockheed,

the LMAC coatings never satisfied or passed the reflectivity and reparability tests.


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82. By the time of Olsens termination, the stealth coatings project was

secretly years behind schedule, poorly performing and out of specifications,

without required waivers or tailorings.

5. 2000-2004: Failures and Misrepresentations Continue [throughpresent]

83. Following Olsens July 1999 departure and at least through October

2004, if not through the present, the LMAC conductive coatings and the Boeing

topcoat coatings have failed. The LMAC conductive coating failed, consistently,

the reparability tests at least through October 2004.

17

By the same token, at least

through October 2004, the Boeing topcoat coatings infrared properties continued

to fail and its coloring, important for visual stealth, was inconsistent.18

84. The LMAC conductive coatings only passed baseline coating

reflectivity tests when Lockheed applied six (6) times the thickness, thereby adding


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of the F-22s weight-gain. On information and belief, Lockheed has had to apply

extra RAM (which is significantly heavier than conductive paint) to cover failing

conductive gap filler and LO coatings over gaps, seams and structural flex points.

On information and belief, the six (6) times additional thickness of conductive

coating added hundreds of pounds to the super-cruiser, and the extra RAM has

burdened the F-22 with approximately four hundred (400) more pounds, covering

up failure and impacting the mission.

85. The extremely thick coatings have proved brittle, resulting in

cracking, fissures and heightened RCS. In short, the conductive coatingswhich

were supposed to be paper thin and light by designhave so materially failed that,

on information and belief, the F-22's velocity and maneuverability have been

compromised by the added weight.

86. The extra coatings were not merely inefficient cover-ups; they were


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87. However, the LO conductive gap filler coatings were substandard,

were cracking, and were failing relatively quickly in testingto the extent they

were tested at all. Even though these coatings were not thoroughly tested to prove

their integrity for aircraft service, and were failing when tested with aircraft fluids

and water, they were put on production aircraft anyway.

88. As a direct result of the expectation that the gap filler material would

crack, Materials and Processes Engineering management decided to modify the

formulation of the gap filler material by adding more conductive filler to the failing

F-22 Specification gap filler material. Their reasoning was that adding excess

filler would make it even more conductive and thus, when the material cracked, as

Lockheed expected it would, the RCS signature would be less observable. The

result, however, was that the extra conductive filler exacerbated cracking in the

gap filler. The excessively thick LO coatings over the gap filler resulted in greater


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would not approve adding even one pound to the aircraft. The F-22 was already

overweight when these hundreds of pounds were added, and any additional weight

would destroy the mission fitness and performance of this new advanced

technology fighter. Moreover, the cracked primers/conductive coating/top coat

paint system and the underlying cracked highly conductive gap filler destroys the

low observability of the RCS signature, essentially painting a bulls-eye target on

the aircraft in place of the intended low observable shroud. As a direct result,

internal corrosion has occurred; the failure of the Low Observables System has

allowed environmental exposure, resulting in internal corrosion. This has now

been documented in the media, including the Salt Lake Tribune.

90. Olsen learned from Lockheed engineering test lab personnel and

engineers in 2005 that LO coatings problems and failures were persisting. Olsen

learned that despite increasing the LO conductive coating thickness to six times the


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91 On information and belief, Lockheed at least through October 2004

and likely to the present date has never truthfully disclosed to the USAF that the

stealth coatings continually, for years, had failed the requisite tests. On

information and belief, at least through October 2004, if not the present, the stealth

coatings program had been delayed many years and hundreds of millions of dollars

have been wasted (1) on the process and (2) on the defective aircraft. Our country

does not have the stealth fighter for which it paid.

F. Incentives to Deceive

92. On information and belief, Lockheed knew that by fraudulently

misleading the USAF about the coatings failures, it would continue to receive (1)

progress and (2) milestone payments, and that the concealment would convey the

impression that the F-22 program was timely progressing. On information and

belief, Lockheed had substantial incentives to lie to the USAF about the defective


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deployed field operations was a false claim, including but not limited to the

following:

a. From at least as early as late 1995, when Lockheed had not

formally tested the coatings although it should have done so, and

subsequently, when Lockheed falsely represented that the coatings had

passed testing, each of Lockheeds certifications, pursuant to 48 C.F.R.

52.232-5c, in each progress bill, that [t]he amounts requested are only for

performance in accordance with the specifications, terms and conditions of

the contract, constitutes a false statement, and each progress bill containing

such certification constitutes a false claim and a false record under the False

Claims Act. All progress payment requests since this time are affected

because low observability is fundamental to the F-22s purpose and function.

b. From at least as early as late 1995, when Lockheed had not


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constituted a false claim under the False Claims Act. All progress payment

requests since this time are affected because low observability is

fundamental to the F-22s purpose and function.

c. From at least as early as late 1995, when Lockheed had not

formally tested the coatings although it should have done so, and

subsequently, when Lockheed falsely represented that the coatings had

passed testing, each milestone bill submitted by Lockheed constituted a false

claim and each certification in support of such milestone bill, consistent with

those described above in paragraphs 17-20, constituted a false statement and

a false record pursuant to the False Claims Act. All milestone payment

requests since this time are affected because low observability is

fundamental to the F-22s purpose and function.

94. Lockheeds statements to USAF representatives at weekly meetings of


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95. Lockheeds public statements at the November 11, 1997 award

ceremony attended by the USAF that the brush and roll restoration process meets

the RCS requirements constitute false statements under the False Claims Act.

96. Morrisons statement in his September 24, 1998 presentation to the

Low Observables Steering Group, attended by the USAF, that the coatings were

meeting specifications constituted false statements under the False Claims Act.

See Exhibit H.

97. Lockheeds statements made at the insistence of Morrison in the

October 1, 1998 report that the coatings had registered stable on all tests

constituted false statements and false records under the False Claims Act.

98. Lockheeds failure to disclose the facts in the February 4, 1999

Management Presentation Document entitled Items that Directly Contribute to

[redacted] Restoration Problems and the April 1, 1999 document entitled F-22


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100. Documents falsely stating or implying that Lockheed had used

prematurely purchased, short shelf-life paints or other materials, which were in fact

stored, discarded, or diverted to other uses, constitute false records and false claims

pursuant to the False Claims Act. Additionally, requests for payment for such

materials constituted false claims under the False Claims Act.

101. Damages to the United States include all of the money expended

for years in pursuing and testing wholly inappropriate, defective LO materials

leading to defective LO stealth for the entire F-22 program. Because stealth is

the primary, intrinsic advantage of the F-22 concept, and the defective stealth

materials do not perform as required, damages should include the entire cost

of the F-22 aircraft manufactured through this dateif not the entire cost,

alternatively, the entire cost of incorporating the defective stealth materials

into the aircraft structure and all of the related costs of the LO development


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minimally, $50 million times the 183 aircraft acknowledged as manufactured

or "in process." The LO materials didn't work in development phases, were

falsely represented as performing and arent working per specifications today.

The current LO materials are not spec for the program, dont work and will

never perform as intended.

103. If the damages include remediation of all F-22 aircraft, on

information and belief the costs of disassembling each F-22, stripping off all

LO materials, developing proper LO materials that would satisfy the

specifications and the F-22 mission, reapplying a functional LO stealth

externality, and reassembling each aircraft would cost no less than $50 million

per F-22. This alternative damages calculation is in addition to the huge

losses from the fraudulent R&D and processing of defective LO materials that

currently plague the F-22 fleet.


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VIII. CAUSES OF ACTION

COUNT ONE:

False Claims Act, 31 U.S.C. 3729(a)(1)(A) (or former 31 U.S.C. 3729(a)(1))

105. Relator re-alleges and incorporates the allegations contained in

paragraphs 1 through 104 of this complaint.

106. This is a claim for treble damages, civil penalties and other relief

under the False Claims Act, 31 U.S.C. 3729 (a)(1)(A) (or former 31 U.S.C.

3729(a)(1)).

107. Defendant Lockheed used coatings on the F-22 that it knew were

deficient. Olsen had direct, personal knowledge of that fact.

108. Lockheed knowingly violated the regulations in FAR and DFARS, of

certifications for the 1991 contract, of certifications in the progress bills, of

certifications in the milestone bills and of representations in other documents and


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milestone bills to the USAF for payment in violation of 31 U.S.C. 3729 (a)(1)(A)

(or former 31 U.S.C. 3729(a)(1)).

110. On information and belief, the USAF paid the false or fraudulent

claims presented in the form of Lockheeds progress bills and milestone bills.

111. By reason of these payments of false or fraudulent claims, the United

States has been damaged in a substantial amount, entitling the United States to

multiple damages, penalties, attorneys fees and other relief under the FCA.

COUNT TWO:

False Claims Act, 31 U.S.C. 3729 (a)(1)(B) (or former 31 U.S.C. 3729(a)(2))

112. Relator re-alleges and incorporates by reference the allegations

contained in paragraphs 1 through 111 of this complaint.

113. This is a claim for treble damages and civil penalties under the False

Claims Act, 31 U.S.C. 3729 (a)(1)(B) (or former 31 U.S.C. 3729(a)(2)).


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reparability tests and had otherwise met the contract specifications for the F-22

when in fact the coatings had continuously failed such tests and had not met

contract specifications.

116. On information and belief, by the wrongful uses of certifications in

the 1991 contract, of certifications in the progress bills, of certification in the

milestone bills and of representations in other documents and presentations,

Lockheed knowingly made, used, or caused to be made or used false records or

statements material to false or fraudulent claims, in the form of progress bills and

milestone bills presented to the USAF for payment in violation of 31 U.S.C.

3729 (a)(1)(B) (or former 31 U.S.C. 3729(a)(2)).

117. On information and belief, the USAF paid the false or fraudulent

claims presented in the form of defendants progress bills and milestone bills.

118. On information and belief, by reason of these payments of false or


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COUNT THREE:

False Claims Act, 31 U.S.C. 3729 (a)(1)(G) (or former 31 U.S.C. 3729(a)(7))

119. Relator re-alleges and incorporates by reference all the allegations

made in paragraphs 1 through 118 of this complaint.

120. This is a claim for treble damages and civil penalties under the False

Claims Act, 31 U.S.C. 3729 (a)(1)(G) (or former 31 U.S.C. 3729(a)(7)).

121. On information and belief, Lockheed used coatings on the F-22 that it

knew were deficient.

122. Lockheed knowingly violated the regulations in FAR and DFARS, of

certifications in the 1991 contract, of certifications in the progress bills, of

certifications in the milestone bills and of representations in other documents and

presentations. Lockheed, in order to obtain payment from the United States,

misrepresented to the USAF that the coatings had passed reflectivity and


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the form of progress bills and milestone bills to the USAF for payment in violation

of 31 U.S.C. 3729 (a)(1)(G) (or former 31 U.S.C. 3729(a)(7)).

124. On information and belief, by those knowing violations, Lockheed

knowingly made, used, or caused to be made or used false records and statements

material to an obligation to pay or transmit money or property to the Government

or knowingly concealed or knowingly and improperly avoided or decreased its

obligation to the Government by concealing its existing, legal obligations to repay

the United States for the unearned money from payments for the defective coatings

from progress bills and milestone bills in violation of 31 U.S.C. 3729(a)(1)(G)

(or former 31 U.S.C. 3729(a)(7)).

125. On information and belief, by reason of Lockheeds conduct, the

United States has been damaged in a substantial amount, entitling the United States

to multiple damages, penalties, attorneys fees and other relief under the FCA.


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or fraudulent information in connection with requests for

payment [including progress bills and milestone bills],

plus three (3) times the amount of the damages that the

United States has sustained, because of Lockheeds

unlawful actions from and after February 1996 when the

F-22 stealth coatings failed reflectivity and reparability

tests through the present date;19

C. Defendant also be directed to disgorge all sums by which

it has been enriched unjustly by its wrongful conduct;

D. Defendant be enjoined from concealing, removing,

encumbering or disposing of any assets which may be

required to pay all civil monetary penalties imposed by

the Court;


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F. Relator be awarded all costs of this action, including

statutory attorneys fees and costs pursuant to 31 U.S.C.

3730(d).

REQUEST FOR TRIAL BY JURY

Pursuant to Rule 38 of the Federal Rules of Civil Procedure, Relator Darrol

Olsen hereby demands a trial by jury.

PRAYER

WHEREFORE, Relator/Plaintiff prays that this District Court enter

judgment on behalf of the Plaintiff and against the Defendant for the following:

a. Damages in the amount of three (3) times the actual

damages suffered by the United States Government as a

result of the Defendants conduct which violated the

False Claims Act, as well as all other relief available


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d. All other relief on behalf of the RelatorlPlaintiff or the

United States Government to which either may be justlyentitled, whether at law or in equity, which the DistrictCourt deems just and proper.

Dated: August 5, 2009UNITED STATES OF AMERICA, ex reI.Darrol OlsenRespectfully submitted:BoYD & ASSOCIATES AWGROUP

Samuel L. Boyd PhilIp E. BensonTX SBN: 02777 00 CA SBN: 138933Catherine C. Jobe Donald R. WarrenTX SBN: 10668280 7825 Fay Ave., Ste. 2006440 North Central Expressway La Jolla, CA 92037Suite 600 Telephone (858) 454-2877Dallas, Texas 75206 Facsimile (858) 454-5878


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CERTIFICATE OF SERVICE AND DISCLOSUREOn or before September 27, 2007, a Disclosure Statement and exhibits were

served upon Mr. Paul J. Wogaman, Trial Attorney, U.S. Department of Justice, 601D St., NW, #9006, Washington, D.C. 20004, regarding Relator's complaints, theDefendant's violations and Relator's intention to file suit.

On this date, A u g u s t . . . . . . 5 ~ 2009, a copy of Relator's/Plaintiffs FirsAmended Complaint was formally served pursuant toCertified Mail, Return Receipt Requested, upon:Eric HolderAttorney General of the United StatesU.S. Department of Justice950 Pennsylvania Avenue NWWashington, DC 20530-0001Mr. Paul J. Wogaman (Via Federal Express)Trial AttorneyU.S. Department of Justice601 D St., NW, #9006Washington, D.C. 20004

FRCP 4(i)(l )(b), vi


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