Opinion ID: 2974343
Heading Depth: 3
Heading Rank: 2

Heading: Black Hawk Helicopter Rear Landing Axles

Text: Counts 4 and 5 of the indictment concern a second contract, solicited and obtained by Euclid Machine in June 2002, to provide the Government with rear landing axles for the Black Hawk Army helicopter. Under the contract, Euclid Machine was to provide two thousand axles. The axles were to have undergone a hardening process known as “shot-peening” in which a metal part is pelted with small BBs to increase the part’s fatigue strength without increasing its weight. Shot-peening cannot 7 be visually detected on a finished part; it can be discovered only by cutting the part open. The Government alleged that Mr. Oh represented that the axles he eventually provided had been shotpeened, when, in fact, he knew that they had not. Euclid Machine subcontracted the axle manufacturing to McNeil Industries. According to Justin McNeil, the director of operations for McNeil Industries, this was McNeil Industries’s first Government contract, and the company was unfamiliar with how the system worked. Mr. Oh met with McNeil Industries representatives to explain how to manufacture the axles based upon the Government specifications. In August 2002, Oh provided McNeil Industries with a document detailing the Government specifications for the axle parts, but this document did not contain all of the information necessary for making the part. In particular, this document omitted the shot-peening requirement. A second document, not delivered to McNeil Industries until December, specified the shot-peening and contained all of the necessary specifications. However, between September and December 2002, McNeil Industries had some four hundred axles manufactured, using other subcontractors pre-arranged by Mr. Oh. According to Justin McNeil, those axles were heat treated, cadmium plated, and chrome plated as per the original specifications, but they were not shot-peened because McNeil Industries was unaware that the contract contained any shot-peening requirement. In late November 2002, McNeil Industries delivered approximately four hundred of the contracted axles to Mr. Oh. On November 27, 2002, Euclid Machine shipped 400 axles to the DCMA, certifying in the shipping documents that the parts conformed to the contract requirements, including shot-peening. Justin McNeil testified that Mr. Oh called him on December 2 and asked for certification for the shot-peening. Justin McNeil said that he told Mr. Oh both that the delivered parts were not shot-peened, and that the price he had quoted Mr. Oh for the parts had not included 8 shot-peening because he was not aware that the contract required it. Shot-peening would have cost McNeil Industries an additional $1.50 per part to perform initially, and would have cost far more to perform after the chrome and cadmium plating had been applied. Following this conversation, Mr. Oh faxed McNeil Industries the second document detailing the axles’ manufacturing process and indicating the shot-peening requirement, and told Justin McNeil to shot-peen the remaining parts. On learning that more than five hundred of the remaining six hundred parts were already chrome plated and would have to be stripped and redone in order to shot-peen them, Mr. Oh told McNeil that he would arrange for the shot-peening of those parts, and that McNeil Industries should ship the remaining eighty-six unchromed parts to Atom Blasting, another subcontractor. During his cross-examination by the Government, Mr. Oh disputed Justin McNeil’s testimony. Mr. Oh testified that he never provided the Government with certifications that the shotpeening had been performed on the first four hundred parts sent by McNeil Industries, but that as the primary Government contractor it was his responsibility to maintain the certifications. Oh maintained that he received certification from McNeil Industries that the other six hundred parts had been shot-peened, and although he could not produce evidence of this, he claimed that he thought “it is an exhibit or document” that he had already provided. He denied knowing in early December that the first set of parts had not been shot-peened, and he also denied knowing that the vast majority of the last six hundred parts were never shot-peened. Mr. Oh testified that it was not until he was indicted in this case that he first learned that the parts were not shot-peened. The Government charged Mr. Oh in Count 4 with making false representations regarding shot-peening for the initial shipment of four hundred axles, in violation of 18 U.S.C. § 1001(a), and 9 in Count 5 with falsely representing that six hundred axles had been shot-peened, also in violation of 18 U.S.C. 1001(a).