GSA slams contracting for Navy boat protection barriers

Ever since the 2000 attack on the USS Cole, Navy officials have worked hard to keep terrorists away from American warships in port, both through new patrol and watch procedures and through technological means such as floating, rubberized barriers. Unfortunately, it seems a greater criminal risk came from the contractors hired to perform the work. According to the Washington Post, the Naval Criminal Investigative Service (NCIS) — the office charged with protecting ships in international ports, among other things — “hired companies that did little or no significant work on the boat barriers yet collected millions of dollars in fees.” Worst of all, having spent $100 million, the barriers were prone to leaks, accidental deflates, and often could not close entirely, thereby obviating their central purpose.

Intending to avoid a time-consuing open competition for the work, NCIS used a GSA small business program to award the contract straightaway to Colorado Springs-based Northern NEF (NNEF). Under the program, NNEF could continue under this specialized treatment so long as the contract was worth no more than $3 million. This was fine for NNEF, a small technology firm that had never done any port protection work. Rather, NCIS told the company to hire Alexandria-based P-Con Consulting of Alexandria, a one-man shop, to buy the barriers and hire a fourth company to install them. Then, NNEF sent multiple bills to the government for the work.

This, the GSA found, violated rules against splitting up payments to avoid competition limits. “Almost all of the over $53 million in boat barrier harbor tasks we analyzed were split to avoid the competitive threshold,” GSA auditors wrote in their report. At each step in the process, NNEF and P-Con received a percentage of the proceeds from the project, often charging large mark-ups and fees that increased the cost as much as 30 percent. All told, GSA auditors found that NNEF collected a total of $2.6 million in fees, even though “it performed none of the work.” They also reported that P-Con collected more than $1 million in administrative fees. “Millions of dollars were wasted by compensating the contractors for doing little more than placing orders with other favored contractors to do the actual work,” the auditors said.