Pratt & Whitney uncover fraudulent engine testing, Transport Canada notified

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This photo taken Feb. 5, 2010, shows a "Pratt & Whitney Dependable Engines" emblem at the plant in East Hartford, Conn. THE CANADIAN PRESS/AP, Jessica Hil

EAST HARTFORD, Conn. - A longtime scheme involving fraudulent parts testing has been uncovered at one of the subsidiaries of the parent company that owns airplane engine-maker Pratt & Whitney Canada.

Pratt & Whitney, which is based in East Hartford, Conn., said Monday it notified Transport Canada about the issue in September 2011, even though the fraudulent tests are not considered to be a public safety concern.

"Thorough internal audits were conducted using original, unaltered test data to confirm the quality of the parts in question," said company spokeswoman Stephanie Duvall in an email Monday.

"There have been no product recalls, service bulletins, or airworthiness directives, and there are no flight safety risks."

The scheme, believed to have been carried out for more than 15 years, was discovered at Carmel Forge Ltd. in Israel, a subsidiary of United Technologies Inc. (NYSE:UTX), which owns Pratt & Whitney.

An internal investigation was initiated in June 2011 after an employee anonymously reported that test data had been routinely adjusted during this period at the plant near Haifa, Israel.

As a result, the company discovered that employees had doctored metallurgical test results to make certain engine forgings appear to meet strict standards when in fact they did not, as part of an effort to minimize more testing.

Transport Canada says it reviewed a summary of the investigation by Pratt & Whitney was "satisfied" with the corrective actions taken by the company.

"As a result, the department did not need to take any further action," the department said in an email.

Pratt & Whitney says Carmel Forge has also notified the Federal Aviation Administration and its customers regarding the fraudulent tests.

"Through the course of their oversight, Transport Canada and the FAA determined that there was no need to issue airworthiness directives," said Duvall.

Montreal-based Bombardier (TSX:BBD.B) declined comment except to say that "Pratt and Whitney is a trusted supplier."

Pratt & Whitney says Carmel Forge has made personnel changes, established stronger software controls, purchased test equipment and taken other steps to prevent adjustments to original test data.

"Carmel Forge remains confident in the quality, integrity and safety of its products," said Duvall.

The Federal Aviation Administration said in a statement it found no evidence of non-conforming parts at Carmel Forge and did not issue fines or other penalties.

The agency also said no special FAA assessments or reviews of the facility are underway. It said it agreed with Pratt & Whitney's corrective action plan and agrees with Pratt & Whitney's assessment that there are no data indicating any in-service issues.

No maintenance schedules were adjusted as a result of the investigation, and the parts are performing as expected, the FAA said.

Pratt & Whitney is a unit of United Technologies Corp., a diversified company that includes Otis Elevator, Sikorsky helicopter, Carrier heating and cooling and other aerospace and building system businesses. Its Canadian subsidiary is based in Longueuil, Que.

— With files from the Associated Press