News Briefs

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  Space News Business

News Briefs

By Warren Ferster

posted: 21 February 2005
01:30 pm ET


Boeing Hiring Scandal Triggers Broad Probe

The U.S. Defense Criminal Investigative Service (DCIS) has been quietly investigating senior Pentagon procurement officials who have gone to work for defense contractors.

From an office in Virginia, investigators are combing employment records, contract awards and other data involving former defense employees in search of cases where companies may have offered jobs to procurement officials in exchange for favorable contract decisions.

Joseph McMillan, special agent-in-charge of the DCIS Mid-Atlantic Field Office, disclosed the ongoing probe Feb. 18 after the sentencing of Michael Sears (right), Boeing’s former chief financial officer.

Sears was sentenced to four months in prison and fined $250,000 for illegally hiring Darleen Druyun, a former Air Force deputy procurement chief, in 2002. Druyun, who had been principal deputy assistant Air Force secretary for acquisition, was hired as a $250,000-a-year deputy general manager of Boeing’s Missile Defense Systems division.

Sears negotiated the terms of her employment while Druyun was deciding whether to award a $29 billion contract to Boeing to build Air Force refueling tankers.

Druyun was sentenced to nine months’ imprisonment, but the ripples of her misconduct continue to spread. On Feb. 18, the Government Accountability Office upheld Lockheed’s protest of a Druyun decision to award Boeing a $2.5 billion contract to build Small Diameter Bombs. And the Pentagon’s inspector general has been tasked to investigate eight other U.S. Air Force contracts that she handled. These include Boeing Satellite Systems’ $335 million- $400 million contract to build the Conical Microwave Imager/Sounder, a key sensor for a new generation of polar-orbiting weather satellites that will serve military and civilian users.

Inspired by the Druyun scandal, investigators are searching four years’ worth of records throughout the Defense Department for evidence of similar improprieties, McMillan said. Computer-assisted analysis has led to some investigative successes, he said. Data mining can be used to uncover hid den patterns of fraud.

But McMillan refused to reveal many details. He would not say how many former senior defense officials are being investigated, how many are suspected of violating laws, how long the investigation would continue or whether evidence of widespread illegal activity has emerged from the probe so far.

An official at the U.S. Attorney’s Office in Alexandria, Va., said the investigation, which began in June, is just reaching full stride. Part of the time was consumed getting the probe organized.

The DCIS investigation is part of a much wider search by federal law enforcement agencies for evidence of procurement fraud, bribery and conflicts of interest.

U.S. Attorney Paul McNulty announced the creation of a Procurement Fraud Working Group that includes law enforcement arms of eight federal agencies, including the DCIS, the Naval Criminal Investigative Service, the National Reconnaissance Office, the FBI and the departments of State, Homeland Security and Transportation.

Boeing officials said they would cooperate with the investigation.

“All we know about it is what District Attorney McNulty stated at his press conference, but our record is one of full cooperation with any government review or investigation,” Boeing spokeswoman Deborah Bosick said.

Atlas 3, Titan 4 Layoffs Could Affect 400 Workers

Lockheed Martin has eliminated 38 jobs and could cut about 400 more as the company flies out its older launch vehicles in favor of the Atlas 5, Lockheed Martin announced Feb. 14.

The first cuts affected employees at Cape Canaveral Air Force Station, Fla., where Lockheed Martin shut down Launch Complex 36 after the final launch of an Atlas 3 Feb. 3. Lockheed Martin plans to cut another 60 positions in this area during 2005.

Another 325 positions will be cut following the final launch of the Titan 4, which is scheduled for April.

Both Atlas 3 and Titan 4 are being replaced by the Atlas 5 family, which was developed under the U.S. Air Force’s Evolved Expendable Launch Vehicle program.

ATK Tests Shuttle Booster For Certification Program

ATK completed a test of a space shuttle solid rocket motor under a program designed to validate the certified lifespan of the giant boosters , ATK and NASA announced Feb. 17.

During the two-minute test at ATK’s Promontory, Utah, facility, 167 instruments gathered data on motor performance. The test mimicked the flight profile of a space shuttle. Space shuttle rocket motors are certified for flight for five-year periods.

This was the last test firing of a solid rocket motor before the space shuttle fleet returns to flight this spring, ATK said in its press release. NASA has set a return-to-flight target date of May 15.

Travel by NASA Personnel Under The GAO’s Spotlight

The U.S. Government Accountability Office (GAO) is investigating all travel by NASA personnel, although no particular individual is being targeted at this time, according to an official with the congressional watchdog agency.

The GAO official said the transportation audit is part of a wider review of NASA’s internal mechanisms for controlling waste, fraud and abuse of U.S. taxpayer resources. That investigation was requested last June by Sen. Susan Collins (R-Maine), chairman of the Senate Governmental Affairs Committee.

In a June 28 letter to the GAO, Collins called for “one or a series of audits” to look into NASA’s controls over disbursements, including credit card programs. “We are particularly interested in your recommendations for improvements and any case studies that demonstrate fraud, waste and abuse,” Collins wrote.

NASA spokesman Glen Mahone said the space agency is cooperating fully with the investigation and has nothing to hide. “We went straight by the book,” he said.

Lockheed Martin Corp. To Acquire SYSTEX Group

Lockheed Martin Corp. will acquire the SYSTEX Group, a Pennsylvania-based defense and intelligence information technology firm, for $462 million, according to a Lockheed Martin news release issued Feb. 18.

SYSTEX’s revenue grew 50 percent in 2004 to $425 million, according to the news release.

The company specializes in engineering and systems integration; command, control, communications, computers and intelligence; information operations; network security; and integrated logistics and business management systems, according to the news release.

The sale, which is subject to U.S. government approval, is expected to close in early 2005, according to the news release.