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Defense Contractor to Pay $600,000 Settlement

April 4, 1986

WASHINGTON (AP) _ A Portsmouth, Va., contractor supplying spare parts for ships will pay the federal government $600,000 to settle a dispute stemming from damage to a Navy ship, the Justice Department said Friday.

Peck Equipment Co. of Virginia reached a settlement agreement with the Justice Department’s civil division after the government alleged that Peck supplied newly manufactured goods under contracts calling for surplus parts.

Government contracts generally specify surplus parts from certain manufacturers because the equipment has been tested and the government user is sure of its quality.

Peck supplied newly manufactured bearings that were defective because of undersized oil orifices, which resulted in $284,220 in damage to machinery aboard the U.S.S. Preble.

An equipment manufacturer complained that since a limited number of items sought under the Peck contract had been produced originally, Peck could not possibly have had surplus on hand.

Peck also supplied newly manufactured goods under other contracts involving the Defense Construction Supply Center in Columbus, Ohio, and the Navy Ships Parts Control Center in Mechanicsburg, Pa., said Assistant Attorney General Richard Williard, in charge of the department’s civil division.

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