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Rules Skirted, Millions Wasted on Navy Boat Barriers

The auditors concluded that Northern collected a total of $2.6 million in fees, even though "it performed none of the work." They also reported that P-Con collected more than $1 million in administrative fees.

Nelson said Northern kept little of the fees.

"They were passed along to the contractors," he said. "There was some markup that was kept."

In a brief interview, Condon disputed the auditors' findings that he collected $1 million in consulting fees for his role in the project. "That's probably not correct," he said. Condon referred questions to his lawyer, Roy Krieger.

Krieger said Condon was a "physical security" contractor at NCIS before he was recruited to manage the boat-barrier project. Condon was unaware of any inappropriate activity involving the contract, Krieger said.

Working under intense pressure, Condon earned his money by traveling the world on the project's behalf, Krieger said. Condon spent his own money on the project and is owed more than $200,000 by the government.

"This was a crash program to get this thing in place," Krieger said. "This was a fire drill when this was happening. The chief of naval operations said, 'This is never going to happen again.' "

GSA's user fees for its role in the project amounted to about 2 percent, invoices show.

In February 2003, Northern was acquired by a larger company and lost its status as a small business. As a consequence, it could no longer receive no-bid jobs from the government program. The Navy had to find another small business to serve as the prime contractor.

The new prime contractor was RMES Communications, a small business that provided coin telephone service at Denver International Airport along with "other communications technology solutions."

On Feb. 14, 2003, RMES sent the government invoices for six payments of $2,678,813 each for the boat-barrier project, according to invoices and contracting documents obtained by The Post. An RMES invoice instructed the government to deposit money in the same bank account that Northern had been using to receive funds on the project, according to the documents.

RMES President Herman Malone said in an interview that he could not recall much about the boat-barrier contract. "I'm a little cloudy in terms of the details," he said. "We were a small player in that."

In the fall of 2003, GSA auditors told NCIS officials they had turned up evidence of improprieties. The auditors wanted to question NCIS officials about the boat-barrier project, but the NCIS officials declined to discuss it, auditors reported.

Two NCIS agents later met with GSA auditors and asked about the thrust of the pending audit. The NCIS agents said they were conducting an investigation of their own and wanted to take over the case. GSA auditors agreed.

That was nearly four years ago.

Researchers Alice Crites and Rena Kirsch contributed to this article.

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