EX-MARE ISLAND EMPLOYEE STILL CLAIMS FRAUD
West County Times
Elizabeth Hayes, Staff Writer
Tuesday, October 3, 1995
Section: news
Page: A06
VALLEJO A former Mare Island Naval Shipyard employee says federal investigators have not fully examined the fraud and favoritism he says tainted $3.5 million worth of contracts.
Roger Helbig of Richmond, former head of the contracts branch at Mare Island, accused senior naval officials of forcing Mare Island and five other shipyards to award work to Coopers & Lybrand.
Helbig says Navy officials improperly awarded the contract for a cost study so it would benefit former naval officers who work for Coopers & Lybrand, conspiring to defraud the government of millions.
"It was worthless work created to give ex-Navy captains a job at good salaries," Helbig said.
The Naval Criminal Investigative Service found Helbig's allegations did not warrant a criminal investigation, according to a letter from Ernest Simon, deputy assistant director for fraud investigations. A Department of Defense Inspector General audit found no basis for the accusation of favoritism.
But the audit found the Coopers & Lybrand work was "inappropriately awarded noncompetitively." As a result, the Navy agreed to require three competitive proposals or quotes from contractors.
Coopers & Lybrand also said Helbig's allegations are unfounded. "There have been a number of government investigations," said Michael Garrett, associate general counsel for Coopers & Lybrand. "The Navy, the General Accounting Office and Inspector General. . .found nothing amiss. We don't understand why Mr. Helbig can't accept these findings."
Scrutiny continues. Navy Admiral J.M. Boorda, chief of naval operations, is looking into the matter, as is Sen. David Pryor, D-Ark.,. "The Navy seemed bent on awarding these contracts regardless of the procurement rules," Pryor wrote in a letter to Assistant Navy Secretary Nora Slatkin. Pryor is the ranking minority member of the subcommittee on post office and civil service.
In a statement to the Contra Costa Times, Pryor said he believes the contract was "a classic case of the Pentagon's open money sack." "This case has all of the main problems with consulting contracts," he said, "including the buddy system, the revolving door and contracts awarded without competition. I am afraid that the taxpayers paid several million dollars and got little if anything in return."
The Navy paid Coopers & Lybrand $3.5 million for cost studies of six naval shipyards. Mare Island's share was about $457,997, including $108,000 for travel, according to a shipyard document.
The Mare Island project concluded in April 1993, a month after the Base Realignment and Closure Commission named the shipyard as a candidate for closure. The study was "discarded as useless after the base closure decision was finalized," Helbig said.
The theory was the studies could be used to save the shipyards from the closure list, said Reed Sullivan, a retired captain and former Mare Island comptroller and supply officer. "That was the big party line as to why they wanted the contract at every shipyard," he said.
The Navy approved the study in December 1992.
Helbig and Sullivan said they tried to open the contract to competition. "We do things non-competitive, but you have to justify it in writing," said Helbig, who said his entire 17-year civilian career has been in contracting. "No one would say, This is why we're using Coopers & Lybrand.' "
Defense Department auditors said the majority of the studies were ordered "without the required justification" for contracting without competition.
Contracts do not always need to be awarded competitively, said Garrett, the Coopers & Lybrand attorney. "If that's favoritism, everyone who does business with the government receives favoritism by the awarding of contracts," he said.
The Navy decided that since Coopers & Lybrand had successfully studied two naval shipyards, the remaining shipyards should also contract with the company, according to investigators with the Naval Sea Systems Command Inspector General's office.
Using the firm allowed "a consistency in analysis and comparison of the shipyard procedures," according to the investigation report. It confirmed three retired Navy officers who work for Coopers & Lybrand carried out the contract at Mare Island. It said the three were experts in naval supply and finance.
The Navy also saw the Coopers & Lybrand study as a way to consolidate or eliminate positions and reduce overhead, according to the Naval Sea Systems investigation.
The study fell under a federal contract for total quality management, a business doctrine that advocates involving everyone in an organization to continually improve performance and meet customer needs.
"We did it well. This is a real strength of ours, this kind of service," Garrett said. Mare Island began a quality management program in 1989 and had several dozen specialists on staff. Coopers & Lybrand "didn't provide training in anything we didn't already know," Helbig said.
Valinda Gillis, quality management advisor at the shipyard, said the Coopers & Lybrand work "had nothing to do with TQM. It was a joke."
Adm. Boorda wrote last month to Helbig: "Roger, I'm in agreement with your basic premise. I don't want to pay one cent more than something is worth and I want our contracting procedures to be correct and lead to lowest cost for value received. I have asked for a complete brief on this."
Boorda said he would pursue the matter to "to see if anything remains to be done."
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