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Lockheed Wins Big Defense Contract (WSJ 23/6/10)

Posted in Uncategorized by ce399 on 23/06/2010

Lockheed Martin Corp. won a contract worth up to $5 billion to support the U.S. military’s special-operations units, after a competitor was barred amid an investigation into alleged improper surveillance of government emails.

The Pentagon said that Lockheed’s Information Systems & Global Services unit would get a multiyear contract to help run the Special Operations Forces Support Activity, a Lexington, Ky., facility that modifies and maintains aircraft, vehicles and weapons for U.S. commando units world-wide, and provides administrative and information-technology support.

A subsidiary of L-3 Communications Corp. previously ran the facility under a contract first awarded in 2003. In March 2009, Lockheed won a new contract to operate it, but L-3 protested the award, and the contract was terminated. L-3’s Special Support Programs Division, formerly known as L-3 Joint Operations Group, continued to run the facility.
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Earlier this month, however, the Air Force deputy general counsel’s office suspended the L-3 unit overseeing the facility, citing an “ongoing federal criminal investigation” into allegations that the unit had used a highly sensitive government computer network to collect business intelligence on its rivals. L-3 employees at the Special Support Programs Division were alleged to have improperly monitored government email traffic.

Other L-3 units weren’t affected by the suspension, which remained in effect as of Tuesday.

A spokesman for L-3 said the company continues to cooperate fully with the government.

In reinstating the Lockheed contract, the Pentagon cited “urgent operational requirements,” an allusion to the continuing military action in Iraq and Afghanistan. Keith Mordoff, a Lockheed spokesman, said the pact would allow the company to provide “critical services” to the nation’s elite troops.

Maj. Wes Ticer, a spokesman for U.S. Special Operations Command, said the decision to reinstate the award was made to avoid any interruption in operations. Special operations forces, he said, needed “continuous logistics support as they deploy, prepare to deploy, conduct combat operations, redeploy and refit. It would be very difficult to ensure continuous support to the warfighter from L-3 while the suspension is in place.”

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Lockheed will run a facility that provides support services for commando units such as the U.S. Army Special Forces shown above in Afghanistan.

A 2009 report by the Defense Department’s inspector general criticized the agency overseeing the special-operations support contract for allowing contract employees “to perform inherently governmental functions.”

The new contract award comes as Congress weighs legislation to tighten oversight of military contractors. Both the House-passed version of the National Defense Authorization Act for fiscal 2011 and a bill passed by the Senate Armed Services Committee contain provisions that could curtail or change the role of contractors within defense agencies. The Pentagon is also involved in a campaign to “insource” more jobs by tapping its civilian work force, so that core administrative functions are overseen by government personnel, not contractors.

Stan Soloway, head of the Professional Services Council, a trade association that represents government contractors, said in a conference call with reporters Monday that he saw “very few provisions” in either of these bills that would have a dramatic impact on the way contractors performed work for the Defense Department. But Mr. Soloway expressed concern that Congress “continues to jump in with little discussion about impact” when it came to giving more jobs back to the federal bureaucracy.



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