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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.
Read the remainder of this entry »
April 23, 2010
Yesterday the Project On Government Oversight (POGO) sent a letter to Office of Management and Budget (OMB) Director Peter Orzsag and Jared Bernstein, the Assistant to the Vice President for Economic Policy, urging them to lower and extend compensation limits for all federal government contractor employees.
“If the Obama Administration wants to limit executive compensation for Wall Street, why aren’t they stopping excessive executive compensation for government contractors? Don’t the taxpayers deserve that?” asked POGO Executive Director, Danielle Brian.
On Tax Day 2010, OMB published its annual contractor “benchmark” compensation limit — $693,151 — the amount that may be priced into, or reimbursed under, government contracts. The limit does not apply to all government contractor employees, but only a small group of top executives.
In the letter POGO urged OMB, through the Federal Acquisition Regulatory Council, to extend the current FAR rule to limit allowable costs to all contractor employees, and not just to the top five executives at each contractor home office and segment location. Furthermore, POGO pointed out that the nearly $700,000 limit is ridiculously high, especially during these difficult economic times.
Founded in 1981, the Project On Government Oversight (POGO) is an independent nonprofit that investigates and exposes corruption and other misconduct in order to achieve a more effective, accountable, open, and ethical federal government. (Click HERE for original article)
So who thinks any of KBR’s, Dyncorp’s, Flour’s top 5 are worth $600+K a year? 500K? $400? Anything?
This has been a month of resignations for KBR’s LOGCAP III Senior Leadership Team (SLT) in Iraq. Three out of five of their top Managers are calling it quits.
The current members of the Senior Leadership Team are:
Maj. Gen. (ret) Larry J. Lust – Deputy Principal Program Manager and former Program General Manager LOGCAP-IV has reportedly given notice of resignation. Replacement unknown at this time. Read the remainder of this entry »
Note: I kept forgetting to update this post about Stanksi. Post updated on 6/29/2009-See red italics
On March 17, 2009 Bruce Stanski, KBR’s President of Government and Infrastructure (G&I), just up and quit!! Stanski had worked for KBR since 1995. The Government and Infrastructure Division is the division that holds the LOGCAP contracts with DoD in the Middle East and Africa. (Click HERE to read that post)
We (I) have been wondering why an executive at his level would just up and quit. No notice…no nothing. Just “I’m outta here.” The rumors as to the reasons have ranged from:
- He went into the witness protection program
- Personal or family illness (was hoping this wasn’t true)
- Left the country to avoid prosecution for KBR’s alleged contracting fraud
- Won the lottery
- Went to work for a major LOGCAP competitor (Fluor)
Well it would appear the latter might be true. I was told that Bruce Stanski is now the Vice President of Human Resources at Fluor as of March 30, 2009. (Updated 06/25/2009): There is some conflicting information here. Jeff Uribe a former KBR concentration camp commandant is reported to be the VP of HR. Stanski clearly working for Fluor directly or as a consultant.) Can anyone fill me in here.
That just leaves me with so many unanswered questions.
Why would the President of a major LOGCAP company take a Vice President of HR position with a competitor?
Is there something going on with KBR that he no longer wanted to be a part of?
Will he use his vast knowledge of KBR’s bidding processes to assist Fluor in bidding against them? That would be only fair I guess since KBR’s Program Manager Larry J. Lust “opened the file but did not read it” with regards to Flour’s bidding information. This information was accidentally sent to him by the DoD Contacting Officer and then immediately recalled. I’m sure KBR won’t use that information to their advantage in any way. (click HERE to read about that)
Maybe it was some kind of a trade. A corporate baseball team so to speak. Like, one of your guys obtained all our bidding info…..now we want one of your guys and we won’t sue you into bankruptcy!! (I wonder if they will do trading cards? Just a humorous thought)
I’m sure there are just stacks of legal non-disclosure agreements. As an HR VP he would not be “directly” involved in the bidding process. But still…all that inside information is priceless.
It will be very interesting to see how this all plays out.
What do you think?
According to this United States Government Accountability Office (GAO) “Decision” dated February 23, 2009 KBR may not be eligible to bid on LOGCAP IV Task Orders. This document has been”Approved For Public Release” click HERE to read the decision in it’s entirety.
I read it and I have a couple questions.
- Does this mean that KBR is no longer eligible to bid on ANY LOGCAP IV Task Order? Or just the ones in question in Kuwait? (I’m not a lawyer?)
- Who can tell tell me how much these Task Orders are worth and how much money KBR lost?
- Does this have anything to do with KBR losing Kuwait to Dyncorp?
- Can anyone tell me who the “offending” KBR LOGCAP IV Program Manager was/is and what they are doing now? In classic KBR fashion, did they get promoted?
- Can anyone tell me who the DOD cognizant contracting officer was/is? Just curious.
If you have any other information surrounding this let me know.
You can find this and other GAO decisions on KBR HERE.