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Neil Gordon: Army of One … Contractor

Neil Gordon – (POGO) – January 11, 2013 – Mark Thompson posted an interesting federal contracting-related tidbit Tuesday on TIME’s national security blog, Battleland. He looked at a list of recent Department of Defense contract awards and noticed that many of them had received only one bid.

Of the 35 contracts in the list that Thompson reviewed, 20 of them, worth a combined $257 million, either solicited or received just a single bid. On many of them, including contracts awarded to big players such as Computer Sciences Corporation (CSC), General Dynamics, Raytheon, and BAE Systems , the government solicited only one bid. Federal agencies are required to award contracts on the basis of full and open competition but are permitted to award non-competitive contracts in certain situations. The U.S. Army awarded 19 of the 20 contracts, which makes us wonder if the Army is perhaps taking its old “Army of One” slogan a bit too literally when it comes to contracting.

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KBR November Litigation Round-Up

NEIL GORDON – (POGO) – November 26, 2012 – November has been a very bad month for defense contractor KBR.

KBR is the federal government’s primary logistics support contractor in Iraq, receiving tens of billions of dollars in business from the Department of Defense over the last decade, much of that under the U.S. Army’s monopolistic Logistics Civil Augmentation Program (LOGCAP) III contract.

In early November, an Oregon federal jury returned an $85.2 million verdict against KBR for exposing military personnel to toxic chemicals at an Iraqi water treatment facility in 2003. The jury found that KBR had “acted with reckless and outrageous indifference to a highly unreasonable risk of harm and conscious indifference to the health, safety, and welfare” of the plaintiffs. A case raising similar claims is pending in KBR’s hometown of Houston, Texas, and will soon go to trial.

U.S. Contractor Held Liable for Scalding at Iraq Compound; Fluor Ordered to Pay $19 Million in Damages

Photo - POGO WebsiteNEIL GORDON – (POGO) – July 13, 2012 – Top 100 federal contractor Fluor Corporation got a dose of Texas justice this week. On Wednesday, a Dallas jury returned a nearly $19 million verdict against the engineering and construction giant in a negligence lawsuit.

Plaintiff David Dawson, who worked as a contractor in Iraq, filed a lawsuit against Fluor Intercontinental, Inc. seeking to hold the company responsible for third-degree burns he suffered over 65 percent of his body while showering at Freedom Compound in Baghdad in November 2007. Fluor provided Operations and Maintenance and Life Support services at the compound under a contract with the U.S. Army Corps of Engineers. Dawson alleged the company was negligent in failing to properly maintain a safe temperature in the water heating system. The jury agreed and awarded Dawson $18.78 million in damages.

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Pentagon Ordered to Lift Suspension of Kuwaiti Contractor’s Affiliates

NEIL GORDON – (POGO) – July 3, 2012 – You might be familiar with the story of Agility, the Kuwaiti company that was, until a few years ago, a key provider of logistics services for the U.S. military in the Middle East. That changed in November 2009 when Agility (formerly called Public Warehousing Company KSC and PWC Logistics) was indicted on charges of defrauding the government of more than $6 billion on food supply contracts, and the Defense Logistics Agency  suspended Agility and dozens of affiliated and subsidiary companies from federal contracting. (Agility was also the target of a civil False Claims Act lawsuit in which a default judgment was recently entered against Agility for failing to respond to the lawsuit.)

The criminal prosecution drags on and the suspensions are nearing the three-year mark. But last week, the U.S.  District Court for the Northern District of Alabama heard the plea of two PWC affiliates and ordered the logistics agency to lift their suspensions. The court ruled that the suspensions of Agility Defense and Government Services, Inc., and Agility International, Inc., two U.S.-based “indirect subsidiaries” of PWC, were illegal.

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United Technologies Subsidiary Pleads Guilty to Criminal Charges for Helping China Develop New Attack Helicopter (Updated)

United Technologies, Pratt & Whitney Canada and Hamilton Sundstrand Corporations Also Agree to Pay More Than $75 Million to U.S. Government

Drawing of Z-10 Helicopter from blueskyrotor.com

The Justice Department announced Thursday that aerospace and defense giant United Technologies Corporation (UTC) and two of its subsidiaries, Pratt & Whitney Canada and Hamilton Sundstrand, paid the federal government more than $75 million to settle criminal and civil charges of violating export control laws. The Project On Government Oversight has obtained documents filed by the government in the case, including a statement of the charges, the guilty plea, and the deferred prosecution agreement. ~Neil Gordon, POGO – “Documents Detail United Technologies’ $75 Billion Settlement in China Export Case”

(DoJ) – BRIDGEPORT, Conn. – June 28, 2012 – Pratt & Whitney Canada Corp. (PWC), a Canadian subsidiary of the Connecticut-based defense contractor United Technologies Corporation (UTC), today pleaded guilty to violating the Arms Export Control Act and making false statements in connection with its illegal export to China of U.S.-origin military software used in the development of China’s first modern military attack helicopter, the Z-10.

In addition, UTC, its U.S.-based subsidiary Hamilton Sundstrand Corporation (HSC) and PWC have all agreed to pay more than $75 million as part of a global settlement with the Justice Department and State Department in connection with the China arms export violations and for making false and belated disclosures to the U.S. government about these illegal exports.  Roughly $20.7 million of this sum is to be paid to the Justice Department.  The remaining $55 million is payable to the State Department as part of a separate consent agreement to resolve outstanding export issues, including those related to the Z-10.  Up to $20 million of this penalty can be suspended if applied by UTC to remedial compliance measures.  As part of the settlement, the companies admitted conduct set forth in a stipulated and publicly filed statement of facts.
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