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FCMD Contractors in the News

BP Gets $1B Cleaning Bill, L-3 Communications Overcompensates, United Space Alliance Faces Contracting Time-Out, DynCorp Settles Fraud Case

BP (FCMD profile)

The Department of the Interior announced on Thursday that BP Exploration and Production, Inc., will provide $1 billion for early oil spill restoration efforts in the Gulf of Mexico as part of an agreement with the federal government and the five states bordering the Gulf. The money will be divided among the states, Interior, and the National Oceanic and Atmospheric Administration (NOAA) to restore coastal marshes, beaches, and barrier islands and conserve ocean habitat.

The agreement does not absolve BP of legal liability for the Deepwater Horizon oil rig explosion and spill that occurred one year ago, which spewed millions of barrels of oil into the Gulf over several months. Click here to see a list of all the instances in our Federal Contractor Misconduct Database (FCMD) involving the 2010 Gulf disaster.

L-3 Communications (FCMD profile)

Mother Jones has posted a list of “America’s 10 Most Overpaid CEOs”, which includes the sixth largest contractor in our FCMD ranking, technology firm L-3 Communications. According to MoJo, this list comprises the “most egregiously overcompensated executives” of 2010 as judged by the size of their compensation, how much more they were paid than their peers at similar companies, and the disparity between their personal bottom line and that of their company.

L-3 Chairman, President, and CEO Michael Strianese ranked seventh on the list with $16.5 million in compensation, a 22 percent increase over the previous year, even though his company’s stock tumbled more than 17 percent. One of the reasons L-3’s stock value plunged last year was the Air Force’s two-month suspension of one of its subsidiaries for allegedly spying on the email of its employees and the employees of the federal government and other contractors.

United Space Alliance (FCMD profile)

United Space Alliance (USA), a Boeing-Lockheed Martin joint venture that serves as prime contractor on the Space Shuttle and provides services for the International Space Station, recently announced drastic downsizing plans coinciding with the final two shuttle missions. While the company prepares for a post-shuttle future with roughly half of its current workforce, it can take heart in another bit of news.

As USA prepares to close out pensions for thousands of current and former employees, NASA will have to cover the more than $500 million shortfall in USA’s pension fund. That’s because NASA’s cost-reimbursable shuttle services contract with USA legally obligates the government to pay all reasonable and allowable personnel costs, including pensions and postretirement benefits. Other agencies, including the Department of Energy, are similarly on the hook for contractors’ pension fund liabilities, which according to Space News, have grown in recent years due to the underperforming stock market.

Meanwhile, USA is embroiled in a legal battle with the Department of Labor, which is seeking to debar USA for violating the terms of its contract. The Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) claims USA has refused to comply with an order to turn over detailed compensation data as part of a probe into gender pay disparity at the company.

“Debarment of United Space from receiving future government contracts will subject United Space to irreparable harm because its primary government contract is winding down based on completion of the Space Shuttle program,” the company argued in a complaint filed in federal court in D.C. Not only has the government threatened to debar USA from all future contracts, it will also terminate all of its existing federal contracts and subcontracts if it does not turn over the data by May 11.

DynCorp International (FCMD profile)

Last week, the Department of Justice announced that DynCorp International settled a whistleblower lawsuit alleging it defrauded Uncle Sam on a contract to provide civilian police training in Iraq. DynCorp agreed to pay the United States $7.7 million to resolve allegations that it submitted inflated claims for the construction of container camps at various locations in Iraq.

By: Neil Gordon
Investigator, POGO

Neil Gordon, Investigator Neil Gordon is an investigator for the Project On Government Oversight. Neil investigates and maintains POGO's Federal Contractor Misconduct Database.

Topics: Contract Oversight

Related Content: Defense, Federal Contractor Misconduct

Authors: Neil Gordon

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