| From the DoD IG ... | April 2012 |
The purpose of the “DoD IG Update” is to make the organization more transparent. Transparency is one of the ways we can demonstrate how we live up to our core values of accountability, integrity, efficiency, and excellence. If you have any questions or suggestions, please reply to IGUpdate@dodig.mil.  UPCOMING REPORTS Significant reports expected to be released within the next 30 days include:
Inadequate Controls Over the DoD Service-Disabled Veteran-Owned Small Business Set-Aside Program Allow Ineligible Contractors to Receive Contracts (Report No.DODIG-2012-059). This audit found that DoD contracting activities awarded 6 contracts, valued at approximately $1.9 million, to contractors ineligible for Service-Disabled, Veteran-Owned Small Business (SDVOSB) set asides, and 27 contracts, valued at approximately $340.3 million, to contractors that potentially misstated their SDVOSB status. As a result, nonqualified firms received awards, reducing the opportunities for veterans disabled defending their country to receive DoD contracts. Vulnerability and Risk Assessments Needed to Protect Defense Industrial Base Critical Assets (Report No. DODIG-2012-064). The report is For Official Use Only. To request a copy, please file a Freedom of Information Act request. Federal Government requesters: please click here. General Fund Enterprise Business System (GFEBS) Did Not Provide Required Financial Information (Report No. DODIG-2012-066). This audit reported that GFEBS did not contain accurate and complete FY 2010 information as required by the Federal Financial Management Improvement Act of 1996 and DoD guidance. As a result, GFEBS did not provide DoD management with required financial information and may not resolve long-standing material weaknesses, despite costing the Army $630.4 million. Therefore, the Army may need to spend more funds than originally budgeted for GFEBS to produce auditable financial statements and to provide decisionmakers with accurate and reliable financial information. Assessment of the DoD Establishment of the Office of Security Cooperation – Iraq (Report No. DODIG-2012-063). This assessment evaluated the sufficiency of actions taken to bring the Office of Security Cooperation – Iraq (OSC-I) to “initial operating capability” and identified impediments that may impact OSC-I achieving “full operating capability.” The establishment of the OSC-I was on track and on schedule to meet its full operating capability target date of October 1, 2011 and to operate independently as an element of U.S. Mission to Iraq by January 1, 2012. However, the report identified key areas that required management attention. Assessment of DoD Wounded Warrior Matters – Camp Lejeune (Report No. DODIG-2012-067). This assessment, the third in a series of assessments evaluating the policies and processes in place to assist wounded warriors in their return to duty status or transition to civilian life, reviewed the Warrior Transition Unit at Camp Lejeune, North Carolina. The assessment found a need for improving timeliness in the delivery of care; developing a comprehensive training program for staff; ensuring that Warrior recovery and transition plans are individually tailored and effective; establishing policies to ensure Warriors can be uniquely identified for DoD TRICARE access to specialized care tracking; implementing measures to decrease Wounded Warriors’ potential misuse and/or abuse of prescription medications; and updating policies and procedures for managing the use of medications.
On February 27, 2012, Andrew Silcox was sentenced to 24 months imprisonment followed by three years of supervised release for violating the Arms Export Control Act. An investigation determined that Silcox exported from the United States a Naval Radar Control Unit, AN/SPS-40 B/C/D part, which is designated as a defense article on the United States Munitions List, without having first obtained a Department of State license or written authorization for the export. Silcox was arrested in San Antonio on October 21, 2011, when he attempted to sell three other units. This was a joint investigation by DCIS and Homeland Security Investigations. DoD Contractors Convicted of Defrauding SOCOM and the Small Business Administration. On February 28, 2012, Eduardo Blanchet and Daniel Guillan were found guilty of conspiracy to defraud the United States and to commit wire fraud. It was determined that more than $9,401,290 fraudulently obtained proceeds should be forfeited. Blanchet and Guillan each face a maximum penalty of 20 years imprisonment. In 2002, the United States Special Operations Command awarded B.I.B. Consultants (founded by Blanchet) a five-year, $50 million small business set-aside contract to teach foreign languages to Special Forces personnel. Subsequent to receiving the award, B.I.B. and affiliated companies became ineligible to bid on additional small business contracts. To circumvent this provision, Blanchet and Guillan formed another company, MiLanguages Corporation, and fraudulently identified a third party as the owner of the company on legal documents. This case was investigated by DCIS and the Small Business Administration. Former Business Executive Pleads Guilty In Alleged $28 Million Bribery and Kickback Scheme. On March 13, 2012, Harold F. Babb, the former director of contracts at Eyak Technology LLC, pleaded guilty for his role in a scheme that allegedly involved more than $28 million in bribes and kickback payments and the planned steering of a government contract that potentially was worth $1 billion. Babb admitted to carrying out the scheme with Army Corps of Engineer program managers and a contractor for Nova Datacom, LLC. Babb pleaded guilty to soliciting, accepting and attempting to accept more than $1 million in kickbacks for giving Nova Datacom preferential treatment on subcontracts. To date, the United States has seized for forfeiture or has recovered approximately $7.2 million in bank account funds, cash, and repayments, 16 real properties, five luxury cars, and multiple pieces of fine jewelry. This was a joint investigation by DCIS, U.S. Army Criminal Investigation Command, FBI, IRS-CI, and SBA.
Audit of the Award and Administration of Performance-Based Payments in DoD Contracts. The objective of this audit is to determine whether DoD officials negotiated and administered performance-based payment milestones in DoD contracts in accordance with selected Federal Acquisition Regulation requirements. Specifically, it will determine whether DoD properly negotiated, verified, and disbursed performance-based payments. Audit of the Oversight Processes and Procedures for the Afghan National Police Mentoring/Training and Logistics Support Contract. The audit will be the second in a Audit of Antideficiency Act Violations in the DoD Military Personnel Accounts as Required by the Consolidated Appropriations Act, 2012. The objective of this audit is to determine whether DoD developed and implemented effective controls to prevent future Antideficiency Act violations of the Military Personnel accounts. Specifically it will determine whether DoD implemented the recommendations in prior reports and investigations that identified the Antideficiency Act violations of the Military Personnel accounts and whether DoD maintained its process improvements to prevent future Antideficiency Act violations.
On March 27, 2012, Deputy Inspector General for Special Plans & Operations, Ambassador Kenneth Moorefield, testified before the Subcommittee on Technology, Information Policy, and Intergovernmental Relations, House Committee on Oversight and Government Reform, on "Labor Abuses, Human Trafficking, and Government Contracts: Is the Government Doing Enough to Protect Vulnerable Workers?" For a copy of the testimony, please click here. ____________________________________________________ |
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