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June 5, 2019 By AMK

A Pentagon contractor’s 9,400% profit on a half-inch metal pin is challenged

As the Pentagon weighs whether to recommend legislation to require more disclosure by contractors, the House Committee on Oversight and Reform will review the audit and TransDigm’s pricing policies in a hearing on Wednesday.

The inspector general’s report “exposes how a company entrusted with supporting our military men and women took advantage of American taxpayers by overcharging the government more than $16 million” in parts sales sold between 2015 and 2017, Oversight Chairman Elijah Cummings said in a statement. The hearing will “investigate whether these pricing issues are more widespread, and demand answers,” he said.

From 2013 through 2015, according to the audit, the contractor increased the price of a valve that opens and closes to change the pressure of fuel moving through an engine to $9,801 from $543. In those years, TransDigm also charged $1,443 each for a “non-vehicular clutch disk” that cost $32 to make.

Planes, Copters

The Pentagon’s inspector general first raised pricing concerns over TransDigm in a 2006 report, followed by the one this year that was released in redacted form in February.

TransDigm manufactures spare parts for airplanes and helicopters including the AH-64 Apache, C-17 Globemaster III, F-16 Fighting Falcon and the CH-47 Chinook. From April 2012 through January 2017, DOD issued 4,942 contracts valued at $471 million to TransDigm.

Liza Sabol, a spokeswoman for the Cleveland-based company, said in an email “that we are not providing comments on specific questions related to the IG report.”

Keep reading article at: http://amp.timeinc.net/fortune/2019/05/14/transdigm-pentagon-costs

Filed Under: Government Contracting News Tagged With: acquisition regulation, aerospace, audit, contracting officers, defense contracts, Defense Logistics Agency, Federal Acquisition Streamlining Act, House Committee, investigation, legislation, military, oversight, parts contracts, Pentagon, policy bills, pricing, reform, taxpayers, TransDigm, watchdog

August 24, 2016 By AMK

Military contractor admits to $1.4 million fraud scheme

A Pennsylvania man who managed large-scale projects at U.S. military facilities in New Jersey has pleaded guilty to charges he directed subcontracts to a company he secretly owned, causing losses of $1.4 million.  

Justice Dept. sealHe also accepted kickbacks totaling $180,345 from four subcontractors on the expectation they would receive favorable treatment, according to the U.S. Attorney’s Office for the District of New Jersey.

James Conway, 45, pleaded guilty to a criminal indictment charging him with one count of wire fraud and one count of accepting unlawful kickbacks.

According to federal prosecutors:

From September 2009 to August 2015, Conway secretly owned a company called Walsh Construction Services, which purported to provide construction services. Using his position as regional manager for a construction contractor, Conway steered subcontracts to Walsh Construction for jobs at Picatinny Arsenal in Morris County, New Jersey, and at the Joint Base McGuire-Dix Lakehurst in Burlington County, New Jersey.

Keep reading this article at: https://timesleader.com/news/576820/military-contractor-from-lackawanna-co-admits-to-1-4-million-fraud-scheme

Filed Under: Government Contracting News Tagged With: abuse, construction, DOJ, fraud, indictment, Justice Dept., kickback, military

September 23, 2013 By AMK

Procurement sleight-of-hand gave contractors access to Naval bases

The Navy Installations Command reached outside normal competitive channels to procure a flawed and risky commercial access control system that has allowed 65,000 contractors to routinely access its bases. The procurement process involved purchases on government credit cards 51 cents below the $2,500 maximum allowed, the Defense Department Inspector General said in a report released this week.

The Installations Command used a contract for a Navywide perimeter monitoring system run by the Naval Surface Warfare Center in Panama City, Fla., as the umbrella contract for the Navy commercial access control system, or NCACS, in 49 states and the Mariana Islands.  The command also tapped a contract for sensor systems run by the Naval Surface Warfare Center in Port Hueneme, Calif., to buy $9.9 million worth of handheld barcode scanners to check IDs at bases as part of the NCACS project, the IG reported.

The report also made it clear that the Installations Command outsourced base credentialing and background checks to a private contractor in order to save money.

In July 2010, the Installation Command selected the Rapidgate system developed by Eid Passport of Hillsboro, Ore., to vet contractor employees who needed routine base access for up to a year in place of the more secure Defense Department common access card issued to Aaron Alexis, an employee of a Hewlett-Packard Corp. subcontractor who killed 12 people at the Washington Navy Yard Monday.

The Rapidgate system consists of a registration station that takes a photo of the contractor and scans fingerprints, and a Web interface for submission of personnel information.

Keep reading this article at: http://www.nextgov.com/defense/2013/09/procurement-sleight-hand-gave-contractors-access-naval-bases/70496/?oref=nextgov_today_nl

Filed Under: Government Contracting News Tagged With: background check, DoD, felony, GSA, IG, military, Navy, noncompetitive, Pcard, security, security clearance

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