The settlement deal, announced by the U.S. Justice Department, brings to an end a lawsuit in which the government alleged that ATK sold dangerous and defective illumination flares to the U.S. Army and the U.S. Air Force.
"Our men and women in combat deserve equipment that meets critical safety and performance requirements," said Stuart F. Delery, acting assistant attorney general for the department's Civil Division.
"This case demonstrates that the Department of Justice will pursue cases where contractors knowingly provide defective equipment that puts the safety of American military service members at risk."
The government alleged that ATK delivered faulty and dangerous LUU-2 and LUU-19 illuminating para-flares to the Defense Department. The flares are used for nighttime combat, covert and search-and-rescue operations.
The flares delivered by ATK, the government alleged, couldn't withstand a required 10-foot drop test without exploding or igniting and that ATK was aware of this when it requested payment.
To settle the suit ATK will pay the United States $21 million in cash and provide necessary in-kind services worth more than $15.9 million to fix the 76,000 unsafe para-flares remaining in the government's inventory.
The lawsuit was initially filed by an ATK employee under the whistleblower provisions of the False Claims Act.