Elon Musk’s space venture last year discovered that an employee at one of its contractors falsified product-quality reports for components intended for its rockets, generating concerns among officials at the National Aeronautics and Space Administration, according to federal investigators. The complaint, filed in federal court on Tuesday, accuses engineer James Smalley with falsifying reports and parts certifications at his former company, PMI Industries LLC. Rochester, N.Y.-based PMI Industries provided precision machining services for parts used to build space flight vehicles for Mr. Musk’s closely held Space Exploration Technologies Corp., or SpaceX. NASA, the Air Force and other federal agencies have...