Sacramento-Based Defense Contractor Must Pay $2 Million Over Remote Aircraft Parts

SACRAMENTO, Calif. (AP) - A Northern California defense contractor will pay the federal government $2 million to settle claims about its manufacturing of parts for remote-controlled aircraft.

The U.S. Attorney's Office in Sacramento says Sacramento-based Composite Engineering Inc. agreed to pay the money to end allegations that it artificially inflated the cost of materials and the amount of labor needed for spare parts for the Air Force Subscale Aerial Target program.

The remote-controlled aircraft are used as targets in military training exercises.

The government says the company received a windfall from the defense contract it signed in 2007 by overstating the costs.

Composite Engineering is a subsidiary of Kratos Defense & Security Solutions, which makes the target aircraft for the military.

Telephone calls to both companies were not immediately returned on Monday.