Contractor fraud puts troops at risk, investigation finds
October 15th, 2012 | Defense Procurement | Posted by Sarah Chacko
Security measures intended to prevent the placement of roadside bombs on a major highway in Afghanistan were improperly installed, the Special Inspector General for Afghanistan Reconstruction said in a safety alert last week.
The “culvert denial systems” were designed to prevent insurgents from placing improvised explosive devices (IEDs) in roadway culverts, according to the alert, which was sent to the commanders of the U.S. Central Command and U.S. Forces-Afghanistan.
“Through our preliminary investigative work, we estimate that a large number of culvert denial systems might have been falsely reported by Afghan contractors as complete when, in fact, the denial systems were not installed or were installed in a defective manner, rendering them ineffective and susceptible to compromise by insurgents seeking to emplace IEDs,” the SIGAR said in the Oct. 10 alert.
Officials identified an undisclosed location of particular concern for potential threats, “however, we are concerned that this problem may be more widely spread throughout Afghanistan,” the alert said.
The SIGAR has been working with the anti-corruption Task Force 2010 and U.S. Central Command Joint Theater Support Contracting Command on the investigation.
Tags: Afghanistan, contractor fraud, culvert denial system, IED, improvised explosive device, Special Inspector General for Afghanistan Reconstruction
Contractor group seeks stellar performers in procurement
September 28th, 2012 | Procurement | Posted by Sarah Chacko
The Coalition for Government Procurement is taking nominations for this year’s Excellence in Partnership Awards, which honors acquisition officials who have made significant strides in promoting and using multiple-award contracts.
Nominations are accepted for the following categories through Oct. 1:
For contractors and government agenncies that have developed significant innovative solutions resulting in savings through sound acquisition planning and development, and well defined contracting requirements:
Contractor Savings Award
Government Savings Award (Civilian)
Government Savings Award (DoD)
For individuals or offices that facilitated open communication between government and industry during the acquisition process and effectively breaking down communication barriers to create a collaborative procurement environment:
Myth-Busters Award (Civilian)
Myth-Busters Award (DoD)
Lifetime Acquisition Excellence Award: Presented to an individual in the procurement community for delivering best-value solutions and who has demonstrated a long-term commitment to improving the federal acquisition system.
Best Veteran Hiring Program (Government): Presented to a government agency for promoting and executing a robust and successful veteran hiring program to the benefit of men and women in uniform.
Best Veteran Hiring Program (Industry): Presented to a government contractor for promoting and executing a robust and successful veteran hiring, teaming or subcontracting program to the benefit of men and women in uniform.
Award winners will be honored during the coalition’s upcoming fall conference Oct. 24-25 at the Crystal Gateway Marriott. If you have any questions, please email events@thecgp.org.
Tags: awards, Coalition for Government Procurement, Excellence in Partnership, federal contracts, mythbusters, nominations, savings, veteran hiring
Group ranks Congress on privatization votes
September 28th, 2012 | Congress Procurement | Posted by Sarah Chacko
A coalition of businesses pushing for the privatization of government work ranked Congress this week on votes that would have invited more competition between the public and private sector.
“We are seeing an unprecedented level of government expansion into numerous activities that should be left to the private sector,” John Palatiello, president of the Business Coalition for Fair Competition, said at a news conference at the National Press Club on Thursday. “In our free enterprise system, government should be the umpire, not the opposing team.”
The coalition’s report lists how each member of the U.S. House and Senate voted on legislation, amendments and procedural actions — 10 in each house — that would have allowed private companies to compete with government workers or impeded companies’ competition for federal contracts.
Among the Senate actions members were scored on were amendments that would have repealed the previously enacted government-run healthcare law and allowed private companies to compete with the Postal Service. Key House votes included amendments that prevented the executive branch from requiring companies to disclose their political contributions as a condition of winning government contracts and that would have removed restrictions on agencies’ use of OMB Circular A-76 public-private cost competitions.
Not surprisingly, Republican leaders, such as Senate Minority Leader Mitch McConnell and Rep. Paul Ryan, who is presidential candidate Mitt Romney’s running mate, agreed with the coalition’s position on key votes. On the other hand, Democratic leaders, such as Senate Majority Leader Harry Reid and House Minority Leader Nancy Pelosi, received goose eggs.
Tags: A-76, Business Coalition for Fair Competition, key votes, privatization, public-private competition
Boeing awarded $1.9 billion to expand Navy’s air fleet
September 24th, 2012 | 2013 Budget Defense Procurement Uncategorized | Posted by Sarah Chacko
The Navy has awarded a $1.9 billion order for more aerial reconnaissance and sub-hunting aircraft to Boeing, the agency announced Friday.
The low-rate initial production award for 11 P-8A Poseidon aircraft is a modification to a previously awarded fixed-price-incentive-firm contract and follows two orders last year for 13 aircraft. The fleet will ” bolster the service’s anti-submarine, anti-surface warfare and intelligence, surveillance and reconnaissance capabilities,” Boeing said in a news release today.
Boeing has delivered three of the P-8As, which are based on the company’s 737-800 commercial airplane, the company said. The Navy plans to purchase 117 to replace its P-3 fleet.
Most of the work will be performed at Boeing’s facility in Seattle, Wash.
Combat trauma training practices under scrutiny
September 24th, 2012 | Procurement | Posted by Sarah Chacko
Members of Congress are calling for a federal investigators to look into a defense contractor’s use of animals in training exercises.
The group asked the Government Accountability Office to investigate Tier 1 Group for “live tissue training,” which uses animals to train service members on the treatment of combat-related injuries.
The Agriculture Department issued a warning to Tier 1 last month after previously citing the company for violating the federal Animal Welfare Act during training exercises in May and last August. The company did not use the right type of anesthesia on live animals during a training exercise and did not properly monitor animals to ensure that the drugs did not wear off during the exercise, according to USDA documents.
One of the citations was prompted by a fairly graphic video released by the People for the Ethical Treatment of Animals (PETA), an animal rights advocacy group, showing training participants cutting limbs off goats with tree trimmers and stabbing them with scalpels under the direction of Tier 1, members said in the Sept. 11 letter.
During the training, goats are seen moving or moaning, and participants ask for more anesthetic. While participants are not wearing military uniforms, PETA says it received the video from a whistleblower within the Coast Guard.
Rep. Bob Filner, D-Calif. and one of the 11 members who signed the letter, sponsored a bill that would phase out the military’s use of live animals in trauma training and require the use of human-based simulation models. A similar bill has been introduced in the Senate.
Given Tier 1’s past violations, the company may have violated the terms of previous military contracts, members said. They also believe there may be enough evidence to terminate a $1.7 million Navy training contract awarded to the company in May and permanently debar the company.
Tags: animal welfare, contractor, live tissue, military, PETA, Tier 1, training
Defense contractor pays $1.15M to settle theft claim
September 5th, 2012 | Defense Procurement | Posted by Sarah Chacko
Defense contractor Paragon Dynamics Inc. has agreed to pay $1.15 million to settle allegations that it improperly obtained bid and proposal information for National Reconnaissance Office contracts, federal prosecutors announced Tuesday.
Paragon Dynamics, a software research and development firm based in Aurora, Colo., allegedly obtained bid and proposal information from competitor Raytheon Corp. in fiscal 2009, while Raytheon was competing on National Reconnaissance Office contracts, the U.S. Attorney for the District of Colorado said in the news release. The NRO is in charge of designing, launching and maintaining America’s intelligence satellites.
A Paragon Dynamics employee with access to a Raytheon facility in Aurora allegedly used his access to obtain entire drafts of Raytheon’s proposals for two separate contracts, according to information from the Colorado U.S. Attorney’s office. The employee allegedly faxed part of a proposal to the president of Paragon Dynamics, who sent the information to another corporation that Paragon Dynamics was teaming with in a competition to win the NRO contract, according to the government’s claims.
“When companies cheat in the bidding process for government contracts by stealing the work of their competitors, they face strict penalties,” said John Walsh, U.S. Attorney for the District of Colorado. “Corporate espionage erodes the trust we have in our public procurement system, and the Department of Justice will hold cheaters accountable for their actions.”
As part of the agreement, NRO’s inspector general reached a corporate integrity agreement with Paragon Dynamics, according to the news release. Paragon Dynamics was awarded $3 million in defense contracts in 2012, according to data from the Federal Procurement Data System.
Tags: National Reconnaissance Office, Paragon Dynamics, Raytheon
Top federal market research firm acquired by private equity
August 27th, 2012 | Procurement | Posted by Sarah Chacko
Deltek Inc., a leading market research and business management company, announced today that it has been bought by private equity firm Thoma Bravo for roughly $1.1 billion.
Deltek, which is now publicly traded, will be privately held under the deal. Deltek’s stockholders will receive $13 in cash for each share when the transaction closes, the company said in a news release. Deltek’s board of directors and its largest shareholder, New Mountain Capital, approved the acquisition.
Deltek, which earned $341 million last year and has more than 1,600 employees, provides services to 98 of the top 100 federal contractors. The company’s revenues increased more than 20 percent between 2010 and 2011 – a likely result of Deltek’s acquisition of INPUT, a business development company, in September 2010 and the Washington Management Group, with its FedSources market research and consulting components, in April 2011.
“Over the past seven years, we have successfully executed our long term plans for Deltek to enter new markets, grow internationally, and expand our industry-leading solutions for project-based companies,” Deltek President, CEO and chairman of the board Kevin Parker said in the announcement. “Throughout our journey, New Mountain Capital gave us outstanding support and was instrumental in building the Deltek of today. We’re very excited about the opportunity to continue Deltek’s successful journey in partnership with Thoma Bravo.”
The transaction is subject to customary closing conditions and regulatory approvals but is anticipated to close by the end of 2012. Deltek will continue to be based in Herndon, Va. and led by its existing senior management team.
Tags: business development, contractors, Deltek, market research, Thoma Bravo
1 defense contractor exec = hundreds of workers, analysis shows
August 23rd, 2012 | Defense Procurement | Posted by Sarah Chacko
The average compensation package of the chief executive officer for one of the top five Pentagon contractors is roughly $21.5 million, according to an analysis by the Project on Government Oversight.
Ben Freeman, an investigator for the government watchdog group, looked at the compensation packages of CEOs at Lockheed Martin, Boeing, General Dynamics, Northrup Grumman, and Raytheon reported in the firms’ Securities and Exchange Commission filings.
The Defense Department — and therefore, taxpayers — pay for part of contractors’ executive compensation, which is billed as part of the indirect overhead rates on contracts. Some lawmakers are pushing measures to reduce how much contractors can receive for executive compensation.
(To be clear, the highest paid defense contractor wasn’t among the five in POGO’s analysis, Freeman said. David Cote, the CEO of Honeywell, received a $35.7 million compensation package last year, according to an Associated Press study.)
But the $21. 5 million in average executive compensation among the top defense contractor is still enough to pay for:
– the salaries of 475 American workers. “The average worker in the U.S. earned $45,230 last year,” Freeman said in his blog post. “These CEO’s were paid more in an average day than the average American worker was paid all of last year.”
– the salaries of 335 soldiers. “According to a 2011 Congressional Budget Office analysis, the median compensation (including basic pay, allowances for food and housing, and tax advantages) for enlisted U.S. military personnel with ten years of experience was about $64,000. ”
– the salaries of 268 defense and aerospace industry workers. “According to a Deloitte study, the average wage (just salary, not benefits) for the entire aerospace and defense industry in 2010 was $80,175.”
Bill to hold agencies accountable for poorly performing overseas contractors
August 20th, 2012 | Defense Procurement | Posted by Sarah Chacko
After pushing the Air Force last year to recoup $4.3 million spent on repairs caused by poor contractor work, Sen. Jeanne Shaheen is now proposing that all agencies explain why they decide not to take action against poorly performing contractors in Afghanistan.
The bill, S. 3505, would require agencies to explain to Congress why they do not act on recommendations by the Special Inspector General for Afghanistan Reconstruction (SIGAR) to recoup money from poorly performing contractors, when the SIGAR’s recommendations would result in at least $500,000 in savings.
The bill would cover instances when the agency fails to respond, disagrees with the SIGAR or only accepts part of the SIGAR’s recommendations to seek reimbursement for a contractor or subcontractor’s failure to complete a construction contract due to poor contractor performance, cost-overruns or other reasons.
Shaheen, D-N.H., who sits on the Senate Armed Services and Foreign Relations committees, pushed the Air Force last year to follow the SIGAR’s October 2011 recommendations to seek reimbursement from London-based AMEC Earth and Environmental, Inc. The SIGAR found that sub-standard construction by AMEC was to blame for electrical failures that cost $4.3 million to repair.
The Air Force initially rejected the inspector general’s recommendation to seek a refund from the contractor, but the Air Force agreed to open a new investigation after Shaheen intervened.
“The United States government has an obligation to the American people to ensure that our resources are used in a cost-effective manner,” Shaheen said in a press release, after the Air Force decided in July that AMEC should reimburse the government for the repairs. “Government contractors must be held accountable when they cut corners.”
Tags: Afghanistan, inspector general, Jeanne Shaheen, poor contractor performance, recommendations
Defense official to lead federal spending oversight board
July 9th, 2012 | Government reform Procurement | Posted by Sarah Chacko
The President will nominate the Defense Department’s procurement policy director to lead a board that promotes transparency in government spending, the White House announced last week.
Richard Ginman, who became director of defense procurement and acquisition policy (DPAP) last June, will be asked to chair the Government Accountability and Transparency (GAT) Board. The 11-member panel — made up of agency inspectors general, agency chief financial officers and a senior Office of Management and Budget official — is mirrored after a board that oversaw efforts to root out waste, fraud and abuse in stimulus spending. The GAT Board is focused on improving transparency and oversight in all federal spending.
Former chairman Earl Devaney, who also chaired the board that oversaw stimulus spending, retired from the GAT Board and from his job as Interior Department inspector general at the end of 2011.
Prior to becoming the DPAP director, Ginman served as principal deputy director of DPAP from 2008 to 2011. Ginman worked for General Dynamics Advanced Information Systems between 2003 and 2006. Ginman, a retired Navy rear admiral, was also the Navy’s deputy for acquisition and business management and the deputy commander for contracts with the Naval Sea Systems Command.
Tags: defense procurement and acquisition policy, federal spending oversight, Government Accountability and Transparency Board, presidential appointment, Richard Ginman