I helped run a small business in the mid-90s. And, back then, if someone sold me shoddy supplies — and then had the stones to lie about it — I would make damn sure never to do business with the bastard again.
The U.S. military works under a different set of criteria, however. Companies found to be crooked one day are given giant contracts the next. Sometimes this is unavoidable — like when there’s only one firm with has the expertise to tackle a particular task. But more often, it seems, the Pentagon goes out of its way to reward business that screw them over.
Take this story from Defense Industry Daily, for example:
In April 2005, L-3 Communications subsidiary Interstate Electronics Corp. in Anaheim, CA was placed under criminal investigation for providing faulty parts to the CSEL [Combat Survivor/Evader Locator] search and rescue GPS/ beacon/ communicators used by US aviators, special forces teams, et. al. — and concealing test failures.
So, naturally, they’ve just been awarded a contract to support the test
instrumentation hardware for most of America’s nuclear missile fleet,
and all of Britain’s.
I’ve been covering military matters for four years, now. And items like this still leave me slack-jawed. Can someone please explain how these deals are allowed to go down?
{ 11 comments… read them below or add one }
there is no ‘real’ concept of a reputation system (and no real impact or effect if you screw somethign up) mainly a fine and ‘time-out’. Transparency doesn’t exist. What is needed is a rated reputation system that impacts if you are awarded a contract otherwise it’s just business as usual and the soldier (and tax payer gets screwed).
Why does this occur? Come on, you know. No one is really THAT naive.
Where do generals/admirals go after they leave the service? hmmm…something called the “private sector” right? Do you suppose the “private sector” is going to give the above generals and admirals stock options and a cushy corner office if they cause “problems” for these same companies while on active duty? It’s just taxpayer money, after all.
Folks like Randy “Duke” Cunningham, the California Republican who is the soon-to-be departed chairman of the House defense appropriations subcommittee also help. For instance, “Duke” sold his house to the owner of a defense contractor with business before his committee for about $700,000 above fair market value. Amazing, no?
& we wonder why our Security is so lapse?
No wonder we had 9-11.
Faulty Corp, faulty Mgmt.
Thats why I wont own a Vette or Viper due to Bad Plant production mode vs Infiniti G35 coupe in QUALITY CONTROL.
Why honor Bad companies or Bad Mgmt in Companies.
Thats a Threat to Security alone.
Alas, NG builds our Subs for the US Sub Forces alone & Boeing the B1 bomber.
Hello all,
As an employee of L-3 GSI, I would like more info on this CSEL investigation, so as to not sway one way or the other. As for subsidary companies under L-3, there are lots of them. I don’t think L-3 as a whole should be brought into the matter. Comparing these two contracts is like comparing apples and oranges… More than likely, these two contracts will have been done by completely different people, who know nothing about each other, even though they both work for this company. I agree that the personnel responsible for screwing the pooch during the CSEL contract should have been dealt with, but saying that the contractors who will be supporting this new contract are going to bomb is absurd. I don’t critisize someone whose cousin commits a crime, just because they have the same last name. Anyone who has UNOPINIONATED info on the investigation, feel free to give it to me.
Steven
Is a company de facto corrupt because of a previous indiscretion? What if they fired the people that oversaw this particular contract? You are making the assumption that because some equipment was faulty and MAY have been covered up, that every time this particular subsidiary receives a contract, it will be carried out in the same manner. Even the particular article you link to shows that this subsidiary has provided parts to submarine missile programs for 50 years. Maybe they screwed this one up, and people should be fired, but forgive me if I do not express the same level of outrage.
I could write an in-depth personal opinion on this subject but why waste the readers time. All it boils down to is “MONEY.” Doesn’t take a fool to not see through all the lies, etc. The old saying is applicable “Money talks.”
As a USAF programmer who has previously worked in one of the AF testing agencies, it boils down to lack of oversight. The F-22 gets extensively tested due to the overall program cost, while something like relocating a radar system gets extensively tested due to it’s missile-warning role, even though it doesn’t cost as much… If this company has the contract to test the missile ranges, they’ll have to meet certain technical criteria, then they’ll have to meet stringent interim milestones. And if they or one of their subsidiaries has undergone an investigation, then the operational test agency, or OTA, should already have their guard up. The comments above are true enough, it boils down to money, or at least the company has to underbid anyone else, unless it’s a sole-source buy, but it’s the OTA’s job in the end to make sure the equipment works…
Hopefully it was the actions of the OTA on the previous contract that resulted in the legal action, and not the use of the items in the field
I think the mechanism here is known as BUTT (Bucks Under The Table), as others have observed. Too bad, because the most rugged and reliable test instrument I still own and use (an F-34 Function Generator) was made by that same Anaheim company Interstate Electronics (not ‘Electric’) back in their better days. I also used their telemetry data recorders on submarines, and nothing matched their design. What a difference time and people make in once-great companies! (IEC is not alone in that respect.)
Having been in the FBM submarine Navy since near its inception, I am all to familiar with Interstate Electronics Corp. (IEC). They have always been the prime contractor for the instrumentation systems onboard all FBM boats. Although I’ve been out of the loop since the mid nineties, IEC has always had a good reputation with the navy.
SO, WHAT ELSE IS NEW!!
Personally, the people involved should be arrested and tried for treason, the company seized and sold to someone more honest. Of course if we go back to the Clinton administration, old slick willie and company changed export technology controls from the state department to the commerce department, you know the department headed by the late Ron Brown. The fellow who died in that plane wreck. Anyway, Clinton’s military advisors told him not to sell China new supercomputers, not to sell them improved missles, that we were assured they would only be used for commercial purposes. Now they have MIRV capable missles that can hit a piece of plywood from the other side of the world, before that they were lucky if it got off the launch platform. You see none of this surprises me, we always give our future adversaries our good military hardware, i.e. (rumsfeld shaking hands with saddam, while we were selling him some of our most lethal bio agents or the Reagan Administration forcing Standard oil to issue credit to the Soviet Navy so they could fuel up their warships over seas so they could maintain the illusion they had a formidable force)
We always seem to pay the price in the form of higher taxes and higher casualties when we our own weapons are used on us. i.e. – Germany’s US deisgned and built Freighters converted over to frigates or the Japanese dive bombers that were designed by our own engineers. We had better wake up to this foolishness, because the war of the future wont last years, but hours or days and if we get hit first, we may not be able to strike back in the future.