The following has been edited to focus on the Lockheed Martin information, please click on the following link to view the document in it's entirety.
Contractor Misconduct
July 17, 2003 POGO Releases Updated
Contractor Misconduct Database:
The Project On Government Oversight (POGO) has found an additional 70 instances of misconduct and alleged misconduct that have cost the federal government's top ten contractors an additional $357 million in pay outs to resolve the instances.
However, none of the top contractors have been suspended or debarred from doing business with the federal government in the last decade.
In all, POGO's new data, updated in the past year, shows that from 1990 through 2003 the top ten federal contractors had a total of 280 instances of misconduct and alleged misconduct and have paid over $2.97 billion dollars in fines, penalties, restitution, settlements and cleanup costs. (see chart below of top ten contractors by number of instances, and examples of contractor misconduct allegations)
Lockheed Martin was number two, with 84 instances of misconduct and alleged misconduct and pay outs of just over $426 million - a 21 percent increase and $194 million in new pay outs. Lockheed Martin made up 9% of government contracts in 2002, the most of any government contractor.
Despite the 50 instances of misconduct, Boeing - number three on POGO's list - is still being considered for a new $16 billion handout to lease 100 converted B-767 tankers to the U.S. Air Force. The Air Force also appears to be ignoring the fact that former Boeing officials are the target of a current federal investigation into allegations that they illegally obtained Lockheed Martin Corp. documents to help Boeing win a huge government contract to launch military satellites.
Although POGO's investigation has documented a large number of instances of misconduct and alleged misconduct, the federal government currently does not possess any sort of database to record such abuse. Federal suspension and debarment officials do not have the necessary information to protect the American taxpayer's interests and account for government purchases.
Misconduct Highlights
Compromising National Security
2000: Lockheed Martin was charged with 30 violations of the Arms Export Control Act and the International Traffic in Arms Regulations. The violations were regarding the transfer of space launch assistance technologies to China. Lockheed Martin paid a civil penalty of $13 million.
1997: Lockheed Martin allegedly exported material to South Korea that can be used in missile delivery/reentry systems. Lockheed did not obtain the export license required for national security and nuclear nonproliferation considerations. The company paid a $45,000 civil penalty.
1995: Lockheed Martin pleaded guilty to violating the Foreign Corrupt Practices Act for paying bribes to officials of the Egyptian Government. The company paid a criminal fine of $24.8 million.
2000: A C-130 Hercules aircraft was on a routine training mission when its four Allison T-56 turboprop engines failed, causing the aircraft to crash into the Pacific Ocean. Lockheed Martin was one of the parties allegedly responsible for the crash that took the lives of ten Air Force Reservists. The sealed case was later settled.
Contractor Misconduct
