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Rules Skirted, Millions Wasted on Navy Boat Barriers
Northern was a small technology firm -- small enough that did not have to compete under federal rules for government contracts unless they were worth more than $3 million. It had never worked on a boat-barrier project before, but it had worked for the Pentagon on other projects.
Northern was told by NCIS officials to hire P-Con Consulting of Alexandria. The company's sole employee was Patrick Condon, who already worked as a security consultant to NCIS. Condon received a title for his role in the project: deputy program manager for Navy boat barriers.
"Northern NEF officials said they had been directed by the Navy to procure the barriers through the consulting firm instead of dealing directly with the manufacturer," auditors wrote in a 2004 report. "We found documentary evidence that showed the consulting firm was the Navy's 'recommended' contractor."
P-Con, in turn, hired a company in England to manufacture the barriers and one in Northern Virginia to install them.
The former director of government programs for Northern, Dave Nelson, said in a recent interview that he did not know why NCIS selected his company or why his company was directed to hire P-Con.
"Northern played middleman," Nelson said.
Northern stayed below the $3 million threshold when it sought payments for the work from the GSA, invoices show. Each individual payment was approved by NCIS and the GSA as though they were separate projects, even though the work was being done under one contract.
Federal contracting regulations prohibit splitting up payments to avoid competition limits.
"Almost all of the over $53 million in boat barrier harbor tasks we analyzed were split to avoid the competitive threshold," GSA auditors wrote in their report.
Between September 2001 and February 2003, at least 30 invoices came in under the $3 million limit. Three examples:
· 55 boat barriers for $2.6 million on Sept. 28, 2001.
· 24 for $1.4 million on Oct. 1.