Does the Punishment Fit the Crime? Former DoD Worker Sentenced for Fraud
Filed under: Contract Awards, DLA, Editorial, Federal Budget Process, IT, Press Releases, crime, logistics
A Defense Logistics Agency (DLA) worker, Constance Walton, was sentenced to two years probation and a $10 K fine. Ms. Walton directed contracts be given to companies that she either had a financial role in or owned outright. She also failed to report income from these ventures. MarketWatch.com has the press release from the US Department of Justice on her case. To top it off the companies she directed work to never did any and were still paid. Read more
Canadian Frigate Spill Over
Filed under: Canada, Contract Awards, IT, Lockheed Martin, development program
Most large procurment programs result in many sub-contracts and work for a variety of companies other then the prime. The Chronicle Herald of Canada reports on the expansion that Lockheed Martin is planning to do in Halifax in support of development of the Command and Control system for the new Canadian frigates. Lockheed Martin and its sub-contractors will not only be hiring a decent amount of new employees but a whole new building will be constructed to house them and complete the work. This is typical of of the spill over effect that can be achieved by these types of contract; and shows why localities are always vying for this kind of work. The downside is thought that when the work is complete there may be no follow on and then everything just shuts down. Contractors like a steady stream of work rather then a great deal for a short period of time.
BAE Subs Out Weapon Part Production
Filed under: Contract Awards, Federal Budget Process, TTM Technologies, production program
As with any large contract the prime contractor, here BAE Systems, has to find companies to make the piece parts and award sub-contracts. In this press release at MarketWatch.com; TTM Technologies announces that they have won a contract from BAE to provide circuit boards and assemblies for use in thermal sights. The contract is wroth $65 M over the next few years. All across the US are many small companies making individual parts and sub-assemblies that are fit together by larger companies to make the actual delivery hardware for the customer. Read more
English government procurement rules too inflexible for most businesses
The English government has been trying to expand the participation of small businesses in its procurements. Now a survey of 500 small and medium businesses finds that most are not willing to make the effort to bid on government work due to the complexity and formality of the procurement process. This has also been a criticism in the US. The government RFP, proposal and evaluation process is too complicated most businesses to make the effort. One advantage that the US does have over the UK is that they do not charge companies for access to their listings of available contracts. Most of that is now done via the web for free.
See this article in printweek.com for more.
Italy to be punished for sole source aircraft contracts
Filed under: Agusta Westland, Contract Awards, Italy, Military Aviation, commercial aviation, production program
Earlier this year the European Union had judged that Italy violated contract laws by awarding helicopter contracts only to state owned Agusta. Now that Italy has failed to take any mitigating steps they are moving to punish the country. Italy had claimed national security reasons for only considering Agusta to provide the aircraft. This is part of an effort by the EU leadership to allow competition across at least the countries of the EU.
For more see Rueters.com.
Defense corruption in Russia
Filed under: Contract Awards, IT, Russia, crime, development program
The Russian Ministry of Defense announced that contract fraud was perpetuated on the Russian government through manipulation of contract evaluation and awards. The Ministry had contracted with the state owned 26th Central Scientific Research Institute to manage a security software system. The Research Institute awarded the contract to a company that turned out to be made up of people on the contract evaluation board. Up to 20 M rubles may be involved in this case where little or no work was done and the money was moved around via false contracts. In the US when a Source Selection Evaluation Board (SSEB) is established all the members are investigated for such conflicts, although there have been cases of outright bribery of members for a favorable contract award.
For more see Komersant’s website.
Metal Storm continues to market in the US
Filed under: Australia, Industry Analysis, Metal Storm, Promotions, S&T, development program
The Army of the United States Association (AUSA) held their national convention last week. One of the key parts of this is exhibits by a large number of defense contractors, big and little. Metal Storm the Australian company that is developing rapid fire electronic gun systems attended. They have received some contracts with the US Military to work on their systems. Metal Storm uses multiple barrel system with a stack of ammunition in them. By firing electronically they can launch all of the ready rounds very quickly. Rates of fire for their larger systems are very impressive and their is a lot of potential for them. No nation yet has committed a large sum to buying these systems, which range in size from 9mm to 40mm; although it is probably scalable to larger rounds.
See the press release at MarketWatch.com.
Here is a link to the demonstration video they used at AUSA.
Missile Defense corruption
Filed under: Alabama, Alaska, Congress, MDA, S&T, SMDC, U.S. Army, crime, development program, missile defense
Last year the US Government arrested two employees of the US Army’s Space and Missile Defense Command (SMDC) on charges that they were taking bribes to steer contracts to selected companies. Now the New York Times has done some further research on the issue and have found out that the main figure, the head of SMDC S&T center, had created a whole scheme to make Congress fund a large test program that would then be self-perpetuating. As part of this he broke Federal law by lobbying Congress directly.
The scheme he concocted was one that when I worked supporting the Ballistic Missile Defense Organization (BMDO), now Missile Defense Agency (MDA), never made much sense to me. The MDA had an issue with testing the systems against long range targets. They targets required could not be tested in the United States as there was no range big enough to hold them. The Navy invested in improving their range on the West Coast of Kuaii in Hawaii that faced a broad open area. Targets would be air launched and fired into the range. The Army looked at building a launch facility on Midway to fire that targets at their main range in Kwajalien. The gentlemen at the core of the scandal, Mr. Cantrell, worked a proposal directly with Congress and various contractors to build a facility in Alaska on Kodiak Island and then use an old Navy helicopter carrier to fire the targets at Kodiak. This never really made sense due to its cost and the creation of all new facilities and modifying the ship at some cost.
Ultimately the idea went nowhere, although a launch facility has been built at Kodiak which supports Air Force operations right now. MDA made the sensible decision to begin testing US Army systems in Hawaii using the range there. Now that it turns out the Mr. Cantrell and various Senators using the earmark system was doing this for personal gain.
See an article in the Huntsville Times here.
McCain’s contracting proposal makes no sense
Filed under: Congress, Contract Awards, Department of Defense, Federal Budget Process, S&T, development program, production program
In the first Presidential Debate on Friday, Senator McCain restated one of his favorite reforms of government spending - require Firm Fixed Price (FFP) contracts for all work. Currently FFP contracts are used to buy hardware and services when the price and schedule are known. The contractor agrees to this as they will make profit on each unit sold. Cost Plus contracts are used for development or for things where the cost is not known. During World War II Cost Plus contracts were used almost exclusively and some abuse did occur. For R&D contracts it is hard to do a FFP as the total time and cost required to develop a system or new capability has often proved to be beyond the estimation capability of the best government or contractors can do. Senator McCain’s proposal will not work, as you will have a situation where no one will bid on the work as they know they won’t make any money on it.
See FCW.com for the story.
MDA awards SETA contracts
Filed under: Contract Awards, IT, MDA, SETA, Teledyne Technologies, development program, missile defense
The last round of BRAC moved a significant number of MDA assets to Redstone Arsenal in Huntsville, AL. Now two SETA contracts were awarded recently to support the agency. DMD was given an ID/IQ contract that could be worth over $40 M if all options are executed. Teledyne Solutions was also awarded one that is worth over $150 M. Both contracts have multiple options, and with all ID/IQ contracts there is no guarantee any work will be given out.
See The Huntsville Times for more.
DTRA awards IT modernization contract
Filed under: Contract Awards, DTRA, IT, Lockheed Martin, logistics
Lockheed Martin won an ID/IQ contract to modernize the IT systems at the Defense Threat Reduction Agency (DTRA). If all options on this five year contract are executed it could be worth over $45 M. Like all of these types of contracts there may be none, a little or all work awarded. The long term goal is to unify the existing legacy systems with one, modern one.
See RTTNews.com for the story.
Navistar gets logistic vehicle contracts
Filed under: Contract Awards, Navistar, U.S. Army, logistics, production program
Navistar was awarded two contracts by the Army to provide tactical support vehicles. These include one contract for tankers to carry fuel, oil and water. The vehicles are for use in Iraq and Afghanistan. Navistar has won several contracts to provide these kind of vehicles. One would have to assume that over the past seven years the Army has used a lot of these vehicles beyond what the originally intended. They will require either replacement or recapitalization, where they are rebuilt and retrofitted to be like a new one.
See the press release at MarketWatch.com.
US Army continues CROWS production
Filed under: Contract Awards, Konsberg, Norway, U.S. Army, production program
Kongsberg received further work under the general CROWS contract. The Crew Remotely Operated Weapon System provides a way for soldiers to work sensors and weapons while staying under armor. Kongsberg makes parts of the overall system and this is a continuation of earlier contracts. The overall CROWS contract is worth over $1 B, and this contract has a value of over $200 M.
See The Wall Street Journal’s MarketWatch.com for more.
Army buys more force protection FLIR systems
Filed under: Contract Awards, FLIR, SMDC, U.S. Army, production program
FLIR Inc, known more for their aircraft installed systems, won a continuation of the contract to provide ground based systems for base and force protection. The US Army’s Space and Missile Defense Command awarded the $96 M contract. FLIR has won several contracts related to this system which provides surveillance of the areas around bases.
The Associated Press reports here.
M7 gets KC-135 work
Filed under: Contract Awards, Military Aviation, U.S. Air Force, production program
Because of the ongoing struggle with the KC-45 contract, the KC-135 tanker still has to fly. Boeing is the prime support contractor for an aircraft they originally built 50 years ago. They awarded M7 a subcontract to build spoilers for the aircraft. M7 has been supporting Boeing with parts since 2005. This contracts illustrates how diverse the business is with the big companies paying lots of little companies to make parts at a cheaper price then they could.
The story is at The San Antonio Business Journal site.
Arrests in Afghanistan contracting scandal
Filed under: Contract Awards, Justice Department, U.S. Air Force, crime, logistics
Two Air Force personnel and three Afghan nationals were arrested over charges that bribes were paid to win contracts for military construction in Afghanistan. Two of the Afghans also resided in the United States. Supposedly a bribe of $30,000 was paid to the US Air Force officials to win a $1 M construction contract in 2004. Another bribe was paid later to win a road contract. Several US military and civilian personnel have been arrested and charged with contract related corruption in Kuwait, Iraq and the United States. With the amount of money going to the efforts in Afghanistan and Iraq there is always a chance for such crime.
There is more at The Wall Street Journal’s MarketWatch.com site.
India changes offset reqirements
Looking at several major contracts to be awarded in the next ten years, India’s government has decided to relax their offset requirements. See a story here. As previously discussed here, India had been demanding major off set investments that some foreign companies felt were too difficult to meet. Now the government will allow companies to just hold funding to meet the offset requirements. This will make it easier for companies to bid on the contracts.
ManTech reports well
ManTech is a second tier defense contractor that provides services and support to the US military. For the quarter ending in June ManTech reported income of $21.9 M. See a press release here. This was a substantial improvement over the same quarter in 2007. Much of the increase came from large IT support contracts for various services. There was also substantial business with classified contracts. Many of the defense contractors that have reported to date have done well over the last quarter.
Marines buy MRAPs
According to this article the US Navy awarded five separate contracts to Navistar International. These contracts will be used to buy MRAP vehicles for the USMC. The MRAP market has increased dramatically in the last three years with BAE, Navistar and Force Protection being the main suppliers. The US military invested heavily in these vehicles to defeat the threat from IED in Iraq which had become the prime threat to their troops. Unfortunately the future combat forces of the Army and USMC will rely on other vehicles, perhaps the Joint Light Tactical Vehicle (JLTV) or the humble HUMVEE which will leave the US with a large inventory of MRAP vehicles not suited to other tactical missions.
GD good to Massachusetts
Filed under: Contract Awards, Federal Budget Process, General Dynamics, IT, Massachusetts, production program
According to this article, GD is rapidly expanding their facility in Pittsfield, MA due to several contracts from DoD. The Advanced Information Systems Division is responsible for developing weapon control systems and other electronic networks for Navy ships. They have recently built a new facility and have created over 140 jobs. This again illustrates how important the DoD budget is in creating high paid, high skilled jobs all over the country.
DoD awards shelter task order contract
Filed under: Contract Awards, Department of Defense, logistics, production program
The US Department of Defense awarded a task order contract for tents and shelters. See this article. Under the contract the qualified companies, including Johnson Outdoors and Schutt Industries, can bid on the various service and other Government agencies requirements. The contract is a one year base with four options with an initial value of $96 M. With these contracts there is no guarantee that any work will be awarded, but the best bid on the various orders will be accepted.
FN moves to compete with Colt
Filed under: Contract Awards, Proposal, U.S. Army, production program
Slowly over the last several years, FN, the Belgian small arms manufacturer has been expanding its US operations. They have developed several NATO standard weapons that have been adopted by the US military - such as the M249 SAW and the M240 LMG. Now, according to this article, they plan to bid on the next M4 contract. The M4, and Colt, have had issues since 9/11. There are many complaints about the weapon and its jamming in dusty environments. The US Special Forces have adopted a separate weapon, the SCAR, and have also looked at 6.8 mm rifles. There have also been issues with how the US Army has managed the contracts for the M4. It will make for an interesting contract process next year.
Air Force leadership canned
The Secretary of the Air Force and its Chief of Staff both resigned today. See the story here. The most obvious reason was the completion of an independent review of how the USAF was handling it’s nuclear weapons. Badly was the conclusion since Minuteman fuzes were shipped to Taiwan and a B-52 flew across the country with nukes on board without the crew’s knowledge. Other issues were the problems and favoritism related to Thunderbird contracts as discussed here. On top of the fairly recent scandal with Boeing and the tanker lease it is a dark day for the service.
SAIC does well on Iraq and Afghanistan
SAIC reported that their first quarter profits were up 25% over last year. See a story here. The company chose to highlight there contracts providing support to the various MRAPs deployed to Afghanistan and Iraq as part of the reason results were so good. Of interest is that the CEO, Mr. Dahlberg, complained of the fact that they cannot generate commercial growth to their satisfaction. This is often true of various large defense contractors. If there are significant decreases in the US defense budget in the future these companies may find it hard to sustain growth and profitability.
Lockheed EVMS not up to snuff
Filed under: Contract Awards, Department of Defense, Lockheed Martin, Military Aviation, development program
This article in the UK’s Gaurdian newspaper says that DoD is unhappy with the accuracy of Lockheed Martin’s Earned Value Management System (EVMS). This may lead to reduced award fee to the contractor. Earned value is defined in this paper, here, as “It is an objective measurement of how much work has been ccomplished on a project. It compares the value of the work done with what was budgeted to do that work and what was actually spent to do it.” It is very important to managing Cost Plus contracts as the money paid to the contractor is based on their performance. Read more
