Pentagon, FBI Probing Air Force Contracts

By Robert O'Harrow Jr.
Washington Post Staff Writer
Friday, April 18, 2008

Federal authorities have begun investigating a contracting arrangement between the Air Force and an intelligence firm called Commonwealth Research Institute, according to documents and people familiar with the case.

Agents from the FBI and the Pentagon's Defense Criminal Investigative Service in recent weeks have delivered subpoenas seeking details about how Commonwealth, or CRI, a little-known nonprofit organization in Pennsylvania, received work from the Air Force through a sole-source deal.

The investigators want to know whether Air Force officials followed appropriate procedures in granting work to CRI. They also want to know whether work was performed primarily by CRI or by more established corporations serving as subcontractors, according to people familiar with the investigation who spoke on condition of anonymity because they are not authorized to speak about the case.

The investigation appears to be in an early stage and related in part to a five-year contract worth up to $45 million that was awarded to CRI without competition in 2006, according to people familiar with the investigation. That contract is for consulting, analysis and management support services for the Air Force, National Security Agency, CIA and other intelligence agencies, documents show.

Investigators are also seeking information about contracts involving CRI's parent, Concurrent Technologies, some of them dating to 2005, according to people familiar with the probe.

Both CRI and Concurrent are registered with the Internal Revenue Service as tax-exempt charities. Concurrent, based in Johnstown, Pa., had almost $250 million in annual revenue in 2006, most of it from Pentagon contracts. Concurrent was started two decades ago with help from Rep. John P. Murtha (D-Pa.), who arranged federal funding for the organization. In recent years, Concurrent has received at least $226 million in congressional earmarks.

An Air Force spokeswoman declined to respond to questions. But the Air Force is cooperating with investigators, according to one person familiar with its response to the probe.

A spokesman for Concurrent and CRI declined to comment but defended CRI's work on behalf of the government.

"CRI has a track record of providing significant value to the Air Force and other government agencies as a prime contractor," said the spokesman, Patrick Dorton. "As part of the current contracts with the Air Force, CRI has performed significant and substantive work in applied research and development for new systems and capabilities."

The federal investigation follows a Washington Post article that detailed how the Air Force arranged for CRI to pay $26,788 to Charles D. Riechers, a senior civilian official who was awaiting White House confirmation of his nomination as principal deputy assistant secretary for acquisition.

In an interview last year, Riechers and other Air Force officials told The Post that he was hired temporarily through CRI's contract. But Riechers said he did no work directly for the organization and instead focused on Air Force projects that had nothing to do with CRI.

The Air Force official said Riechers was retained under an arrangement that is widely used in the Pentagon because he had special talents to help on research, development and modernization programs.

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