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Air Force Lifts Booz Allen Suspension, Contractor Admits to “Broader Systemic Ethical Deficiencies” and “Additional Improper Actions”

Neil Gordon – (POGO) – April 17, 2012 – On Friday, Booz Allen Hamilton announced that its San Antonio office was removed from the Excluded Parties List System (EPLS) and regained full eligibility to compete for new federal contracts. Booz Allen entered into a three-year administrative agreement with the U.S. Air Force. We strongly encourage you to read the agreement, which contains several astonishing admissions about the company’s ethics environment and business practices.

POGO blog readers may remember that Booz Allen’s San Antonio office was proposed for debarment in February because, in April 2011, an employee at the office disseminated protected, non-public procurement information in apparent violation of the Procurement Integrity Act. On his first day of work, retired Air Force Lieutenant Colonel Joselito Meneses shared with his co-workers sensitive pricing data he had obtained while at the Air Force that gave Booz Allen an unfair competitive advantage in an upcoming procurement. Meneses and four of the co-workers with whom he shared the data were also proposed for debarment. (A search of the EPLS today reveals that Meneses and two co-workers are still proposed for debarment. The other two employees’ suspensions were lifted in March.)

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Booz News: Top Contractor Booz Allen Making Headlines for the Wrong Reasons

Scott Amey – (POGO) – The Securities and Exchange Commission (SEC), the agency responsible for protecting investors and economic markets, has awarded millions of dollars to top 100 federal contractor Booz Allen Hamilton for management support services. According to Reuters, some lawmakers and SEC insiders are questioning the fiscal wisdom of the SEC’s decision.

“If they’re not careful, agencies can spend billions of taxpayer dollars on outside studies and contractors and have nothing to show for it,” Senator Charles Grassley (R-IA) told Reuters, adding that “The SEC appears to be headed down this path in hiring a consultant to implement another consultant’s work.”

As Reuters reports, Booz Allen consultants are costing the SEC anywhere from $100 an hour to over $300 an hour and are being paid an average of $140 per hour as compared to $93 per hour for SEC staff. That’s a differential of over 50 percent, which over a year is a cost premium of nearly $100,000 to have Booz perform those jobs.

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Grounds for debarment or too big to fail?

Suspend a Big Government Contractor. “Too big to fail” is a term thrown around the financial world quite a bit these days, but apparently it applies to the government contracting industry as well. As it stands right now, there are large contractors that would never make it on the suspended or debarred list, simply because they do so much business with the government. There are a few examples of large contractors being suspended for a short period of time, but never anything that leaves a mark. If this administration really wants to make a stand on contracting ethics, it would give a serious suspension to a large contractor that commits a violation to show that no company is above the law. ~Government Contractors Gaming The System, Ethisphere

POGO has recently posted  two articles with more details on the latest procurement fraud scandal to hit the defense contracting industry, this time it is Booz Allen Hamilton on the hot-seat.  Before you click on those links, let’s take a trip back in time to February 2009.

Almost three years ago to the day of the Booz Allen incident another similar incident came to light which resulted in a mere slap on the wrist for the offending contractor and their program manager, who also happened to be a retired military officer.
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Contracting Time Out for Booz Allen Hamilton

NEIL GORDON – (POGO) – February 8, 2012 – The Air Force has just suspended from federal contracting a unit of global consulting firm Booz Allen Hamilton and recommended it for debarment. The notice was posted in the Excluded Parties List System on Monday.

The EPLS record cites the action as a proposed debarment pursuant to Federal Acquisition Regulation (FAR) section 9.406-2, which outlines the various causes for debarment: conviction of or civil judgment for commission of fraud or a criminal offense in connection with a contract; violation of federal or state antitrust laws relating to the submission of offers; commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, tax evasion, violating federal criminal tax laws, or receiving stolen property; commission of any offense indicating a lack of business integrity or honesty; or serious violations of the terms of a federal contract or subcontract.

In a statement to Federal News Radio, Booz Allen said the Air Force’s action “relates specifically and solely to the San Antonio office and individually to two current and three former employees based there.” The EPLS notice indicates that the proposed debarment includes four individuals. According to the company, the incident “involved a former government employee who we hired who inappropriately retained and provided government procurement-sensitive information.”

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CWC Commissioners give award winning performance at Hearing

One day after the 83rd Annual Academy Awards, the Commission on Wartime Contracting (CWC) held a their 20th hearing on wartime contracting. This hearing was entitled  “Ensuring contractor accountability: Past performance and suspensions and debarmements“.  I only wish there was an Academy Honor for the “Best Tough Guy”  on the CWC.  These Commissioners would certainly have my vote.   Perhaps a more appropriate honor would be a Lifetime Achievement Award for Excellence!  The Commissioners continue to show the country how bipartisan politics should work for the greater good of our country, not for personal petty ass partisan agendas.

Their tough as nails approach and ability to to ferret out the truth amongst the BS some witnesses attempt to baffle the Commission with is truly amazing and keeps the audience riveted.  Yes, I said riveted and when it comes to hearings and the day to day business of our government that is usually not the case. But the Commission accomplishes this with each hearing they conduct.

Yesterday’s hearing was no exception, several witnesses attempted to spend their time testifying about everything but the issues and trying their damnedest not to answer the questions.  I once heard someone describe this type of doublespeak as “spending all day talking about a broom but never getting to the handle.”  Our awarding winning cast on the Commission will have none of it and are quick to call these types to the carpet. These double-talkers are verbally dragged back on point squirming all the way.

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