Navy | The Contracting Education Academy

April 29, 2019 By AMK

Why the Navy is giving agencies, industry a much-needed wake-up call on supply chain risks

On page 6 of the Navy’s recent report about its cyber readiness, there is a jaw-dropping confession: “The systems the U.S. relies upon to mobilize, deploy and sustain forces have been extensively targeted by potential adversaries, and compromised to such extent that their reliability is questionable.”

Bill Evanina, director of the National Counterintelligence and Security Center in the Office of the Director of National Intelligence, wants that single sentence in the 80-page report to sink in for a second.

“The Navy’s report on their resilience and reliability is that watershed moment not only for the Department of Defense but for all agencies in the federal government, and I would even proffer in the private sector, to have an honest, internal look at their systems, their data, their capabilities and their protection mechanisms and where they have vulnerabilities and how the threats are manifested in their organizations,” Evanina said after speaking at the Intelligence and National Security Alliance (INSA) event on supply chain management in Arlington, Virginia, on April 1. “I think all agencies should take a hard look and say, ‘What can we do that is similar to this to look at our own processes and protection models?’”

The Navy report serves as a call to arms around the challenges every agency faces from systems under attack to attempts to steal information from its industrial base.

“The DON’s dependency upon the defense industrial base (DIB) presents another large and lucrative source of exploitation for those looking to diminish U.S. military advantage. Key DIB companies, primes, and their suppliers, have been breached and their IP stolen and exploited,” the report states. “These critical supply chains have been compromised in ways and to an extent yet to be fully understood.”

Keep reading article at: https://federalnewsnetwork.com/acquisition/2019/04/navy-giving-agencies-industry-much-needed-wake-up-call-on-supply-chain-risks/

February 15, 2019 By AMK

Recruiting, faster tech acquisition are vital to maritime superiority

The U.S. Navy, which is graduating 40,000 trained recruits every year, “is the most talented Navy we have on record,” Chief of Naval Operations Adm. John Richardson says.

The service has met its recruiting goals for sailors every month for the past 12 years, he told an audience at the Brookings Institution in Washington on Jan. 28th, “even though we can’t compete” with the private sector on salary. And the Navy “demands a lot,” Richardson added, citing requirements that recruits spend seven months at sea away from their families.

The incoming maritime aspirants also are drawn from a diverse talent pool because diversity is an “asymmetric advantage,” he said. “Diverse teams have been shown scientifically to be better” at collaboration, creativity and innovation. Recruiters will also tailor their pitches to candidates with differing goals in education, travel and family obligations.

Such moves to care for the “U.S. Navy team” are one of the components of the Navy’s newly revised “Design for Maintaining Maritime Superiority,” released last month after Navy leaders updated a January 2016 version to reflect the President’s National Security Strategy and the Pentagon’s National Defense Strategy.

Keep reading this article at: https://www.defenseone.com/politics/2019/01/recruiting-faster-tech-acquisition-are-vital-maritime-superiority-cno/154485

November 16, 2018 By AMK

Captain from Georgia is latest Navy officer caught in ‘Fat Leonard’ corruption

The 350-pound Leonard Glenn Francis — known in Navy circles as “Leonard the Legend” for his wild-side lifestyle — spent decades cultivating relationships with Navy officers, many of whom developed a blind spot to his fraudulent ways. In the past three years, 33 defendants have been charged and 22 have pleaded guilty, many admitting to accepting things of value from Francis — also known as “Fat Leonard” — in exchange for helping the contractor win and maintain contracts and overbill the Navy by millions of dollars.

On Tuesday, Nov. 13, 2018, another Navy captain pleaded guilty to criminal conflict of interest charges and a former Navy master chief was sentenced to 17 months in prison today on corruption charges. The defendants are among the latest U.S. Navy officials to plead guilty and be sentenced in the expansive corruption and fraud investigation involving foreign defense contractor “Fat Leonard” Francis and his Singapore-based ship husbanding company, Glenn Defense Marine Asia (GDMA).

Jeffrey Breslau of Cumming, Georgia pleaded guilty to one count of criminal conflict of interest before U.S. District Judge Janis Sammartino of the Southern District of California. Breslau was charged in September 2018. Retired Master Chief Ricarte Icmat David of Concepcion, Tarlac, Philippines, was sentenced by Judge Sammartino, who also ordered him to serve a year of supervised release and pay restitution of $30,000. David was charged in August 2018 and pleaded guilty in September to one count of conspiracy to commit honest services wire fraud.

According to admissions made as part of his guilty plea, from October 2009 until July 2012, Breslau was a captain in the U.S. Navy assigned as director of public affairs for the U.S. Pacific Fleet, headquartered in Pearl Harbor, Hawaii. As part of his duties, Breslau was involved in devising the Navy’s public affairs communications strategy, and provided public affairs guidance to Pacific Fleet components and other Navy commands. From August 2012 until July 2014, Breslau was assigned to the commanding officer for the Joint Public Affairs Support Element in Norfolk, Virginia, where he was responsible for leading joint crisis communications teams.

Breslau admitted that from March 2012 until September 2013, while serving in the Navy, he provided Francis with public relations consulting services, including providing advice on how to respond to issues and controversies related to Francis’s ship husbanding business with the Navy. These included issues related to port visit costs, allegations of malfeasance such as the unauthorized dumping of waste, disputes with competitors, and issues with Pacific Fleet and contracting personnel. During the course of his consulting agreement with Francis, Breslau authored, reviewed or edited at least 33 separate documents; authored at least 135 emails providing advice to Francis; provided at least 14 instances of “talking points” in advance of meetings between Francis and high ranking Navy personnel; and “ghostwrote” numerous emails on Francis’s behalf to be transmitted to Navy personnel. During the course of this consulting agreement, Francis paid Breslau approximately $65,000 without Breslau disclosing the agreement to the Navy, Breslau admitted.

As part of his guilty plea, David admitted that he was assigned various logistics positions with the Navy’s Seventh Fleet, including with the Fleet Industrial Supply Center in Yokosuka, Japan from June 2001 to July 2004; on the USS Essex from July 2004 to August 2007; on the USS Kitty Hawk from September 2007 to August 2008; and on the USS George Washington from September 2008 to July 2010. In these positions, David was responsible for ordering and verifying goods and services for the ships on which he served, including from contractors during port calls. Throughout this period, David received from Francis various things of value, including five star hotel rooms during every port visit, he admitted.

David further admitted that he repeatedly facilitated fraud by allowing Francis and GDMA to inflate the husbanding invoices to bill for services never rendered. For example, David instructed Francis to inflate invoices for the USS Essex’s anticipated November 2007 port visit to the Philippines. As David transitioned to a new position aboard the nuclear aircraft carrier USS Kitty Hawk, on or about May 8, 2008, Francis’s company paid approximately 84,637.00 Hong Kong Dollars (HKD) for hotel reservations at the Grand Hyatt Hong Kong for Navy personnel assigned to the USS Kitty Hawk including 10,396 HKD for David’s four-night stay in a Harbor View Room, David admitted.

Francis pleaded guilty in 2015 to bribery and fraud charges, admitting that he presided over a massive, decade-long conspiracy involving “scores” of U.S. Navy officials, tens of millions of dollars in fraud and millions of dollars in bribes and lavish gifts, including luxury travel, airline upgrades, five-star hotel accommodations, top-shelf alcohol, the services of prostitutes, Cuban cigars, Kobe beef and Spanish suckling pigs.

The case was investigated by DCIS, NCIS and the Defense Contract Audit Agency.

For earlier reports on this scandal, see: https://contractingacademy.gatech.edu/?s=fat

Source: https://www.justice.gov/opa/pr/former-us-navy-captain-pleads-guilty-and-former-master-chief-petty-officer-sentenced-sweeping

August 8, 2018 By AMK

Navy’s top acquisition priority stumbles out of the gate

The U.S. Navy’s $122.3 billion Columbia-class ballistic missile submarine program is off to an inauspicious start after faulty welding was discovered in several missile tubes destined for both the Columbia and Virginia-class programs, as well as the United Kingdom’s follow-on SSBN program.

**The future ballistic missile submarine Columbia, the lead boat in the next generation of nuclear missile boats.** (drawing courtesy of US Navy)

In all, 12 missile tubes manufactured by BWXT, Inc., are being scrutinized for substandard welds. Seven of the 12 had been delivered to prime contractor General Dynamics Electric Boat and were in various stages of outfitting, and five were still under construction. The Navy and Electric Boat have launched an investigation, according to a statement from Naval Sea Systems Command spokesman Bill Couch.

“All BWXT welding requiring volumetric inspection has been halted until the investigation is complete,” Couch said.

The bad welds came to light after discrepancies were discovered with the equipment BWXT used to test the welds before shipping them to GDEB, according to a source familiar with the issue.

The discovery of a significant quality control issue at the very outset of fabrication of Columbia injects uncertainty in a program that already has little room for delays. The issue is made even more troubling because it arises from a vendor with an excellent reputation, and raises questions about whether the Navy can deliver Columbia on time, something the Navy says is vital to ensuring continuous nuclear deterrent patrols as the Ohio class reaches the end of its service life.

Keep reading this article at: https://www.defensenews.com/breaking-news/2018/08/06/the-us-navys-top-acquisition-priority-stumbles-out-of-the-gate-after-bad-welds-discovered-in-missile-tubes/

June 15, 2018 By AMK

$20 million lawsuit settled alleging contractor falsely overcharged Navy for ship husbanding services

Inchcape Shipping Services Holdings Limited and certain of its subsidiaries (collectively, Inchcape) have agreed to pay $20,000,000 to resolve allegations that they violated the False Claims Act by knowingly overbilling the U.S. Navy under contracts for ship husbanding services, the Department of Justice has announced.

Inchcape is a marine services contractor headquartered in the United Kingdom.

Inchcape provided goods and services to Navy ships at ports in several regions throughout the world, including southwest Asia, Africa, Panama, North America, South America and Mexico. Inchcape provided ships with food and other subsistence items, waste removal, telephone services, ship-to-shore transportation, force protection services and local transportation. The lawsuit alleged that from 2005 to 2014, Inchcape knowingly overbilled the Navy for these services by submitting invoices that overstated the quantity of goods and services provided, billing at rates in excess of applicable contract rates, and double-billing for some goods and services.

“Federal contractors may only charge the government for costs allowed by their federal contracts,” said Acting Assistant Attorney General Chad A. Readler, head of the Justice Department’s Civil Division. “The Department of Justice will take action against contractors that knowingly submit inflated claims to the armed forces—or any other agency of the United States—as those inflated claims wrongfully divert taxpayer dollars.”

“We trust contractors supporting our warfighters to act with the utmost integrity and expect them to comply with their obligations to bill the government as called for by their contracts,” said U.S. Attorney for the District of Columbia Jessie K. Liu. “This settlement reflects our Office’s strong commitment to holding accountable those who violate these fundamental principles, no matter where they may be located.”

“This settlement demonstrates that the Department of the Navy will continue to hold contractors accountable for the agreements they make to supply our fleet,” said Secretary of the Navy Richard V. Spencer. “The Department expects strict adherence to higher standards within the Department and expects the same from its contractors.”

“Fraud is an abuse of the system that siphons resources away from the American warfighter,” said Jeremy Gauthier, Special Agent in Charge of the Naval Criminal Investigative Service’s Washington D.C. field office. “NCIS will continue to work with our law enforcement partners to hold responsible those who would put personal gain above corporate integrity.”

The lawsuit was brought under the qui tam, or whistleblower, provisions of the False Claims Act by three former employees of Inchcape, Noah Rudolph, Andrea Ford and Lawrence Cosgriff. Under the act, a private citizen may bring suit on behalf of the United States for false claims and share in any recovery. The government may intervene in the case, as it did here. The False Claims Act allows the government to recover treble damages and penalties from those who violate it. As part of today’s resolution, the whistleblowers will receive approximately $4.4 million.

The case was handled jointly by the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office of the District of Columbia, with assistance from the Department of the Navy and the Naval Criminal Investigative Service.

The case is captioned United States ex rel. Rudolph v. Inchcape Shipping Services Holdings Limited, et al., No. 1:10-cv-01109 (D.D.C). The claims alleged in the case are allegations only, and there has been no determination of liability.

Source: https://www.justice.gov/usao-dc/pr/united-states-settles-lawsuit-alleging-contractor-falsely-overcharged-united-states-navy

The U.S. Navy, which is graduating 40,000 trained recruits every year, “is the most talented Navy we have on record,” Chief of Naval Operations Adm. John Richardson says.

The U.S. Navy’s $122.3 billion Columbia-class ballistic missile submarine program is off to an inauspicious start after faulty welding was discovered in several missile tubes destined for both the Columbia and Virginia-class programs, as well as the United Kingdom’s follow-on SSBN program.

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