Contracts for Body Armor Filled Without Initial Tests

Inspections Skipped in 13 Of 28 Deals, Report Finds

By Dana Hedgpeth
Washington Post Staff Writer
Thursday, April 3, 2008; D01

Government auditors said yesterday that nearly half of 28 contracts to manufacture body armor for Army soldiers were completed without the gear ever going through an initial test.

Nearly $3 billion worth of body armor did not go through early inspections known as “first article testing,” or FAT, that are performed before major production to ensure that a company can meet the contract’s requirements and to catch any defects, according to a report by the Defense Department’s inspector general. Contracting officials say the initial testing is done to save time and money.

“Army contracting officials did not require or perform FAT for 13 of the 28 Army contracts and orders reviewed,” the report said. As a result, the Defense Department “has no assurance” that the equipment produced under the 13 contracts “met the required standards,” the report said.

Officials with the inspector general’s office said its auditors did not test the armor or look for flaws after it was made and put into use. The Army manager who oversees the body armor program told Defense Department officials that “the Army has no evidence of deaths that can be attributed to defective body armor.”

A spokesman for the Army said that while some paperwork may have been missing, none of the body armor had problems. “None of this equipment in all of the tests we’ve done is flawed,” said Paul Boyce, the spokesman. “It has not shown any signs of flaws.”

Boyce said the Army disagrees with the inspector general’s interpretation of the acquisition rules that detail the testing requirements for equipment. “There is a debate as to the timing of the types of tests,” Boyce said. “We have a different interpretation.”

One manufacturer, Point Blank Body Armor of Pompano Beach, Fla., said in a statement that “there are rigorous testing procedures in place at Point Blank Solutions to ensure that our products are in accordance with the requirements of all of our customers, be it the United States government, U.S. Armed Forces and the various domestic law enforcement agencies we service.”

For the report, auditors looked at the pre-solicitation, awarding and administration of 40 contracts awarded to 14 contractors by the Army and the Marine Corps from January 2004 to December 2006. They found no deficiencies with the Marines’ 12 contracts.

The report said Army officials “did not follow” federal acquisition regulations in buying body armor, and it found “deficiencies in 16 of the 28 contracts and orders” it reviewed. In some cases, Army officials did not have paperwork showing whether the testing had been done, and in other contracts, the requirements for testing were waived.

Defense officials conducted the audit at the request of Rep. Louise M. Slaughter (D-N.Y.).

“This indicates that nearly half of the Army’s contractors did not perform the most basic test on the body armor before it was sent to our troops fighting overseas,” Slaughter said in a statement. “It’s shameful that the Army would not scrupulously ensure that every piece of equipment is properly tested, especially a fundamentally life and death product such as body armor.”

Navy Restarting Contest for Halted Shipbuilding Program

By David Sharp
Associated Press
Thursday, April 3, 2008; D04

PORTLAND, Maine, April 2 — The Navy is moving forward with construction of a new type of small, speedy warship after upending the program by canceling contracts last year, officials said Wednesday.

The Navy’s formal request for proposals, issued to General Dynamics of Falls Church and Lockheed Martin of Bethesda on Tuesday, calls for construction of three Littoral Combat Ships over the next several years.

The Navy envisions a competition in which the winning bidder is awarded contracts for two of the ships while the other builds a third, Lt. Cmdr. John Schofield said Wednesday.

The Navy, which hopes to eventually build 55 Littoral Combat Ships, wants the smaller warships capable of operating in shallow coastal waters to defend against pirates and terrorists. The ships are a key element of the Navy’s goal of increasing its fleet to 313 ships.

But the program has been plagued by cost overruns, and the Navy’s handling of the fast-tracked effort has come under criticism.

The Navy put the brakes on the program last year, canceling two ships, after costs of the original ships grew from early estimates of about $220 million to more than $300 million apiece.

The Navy is operating under a congressional cost cap of $460 million per ship, a reflection that the original cost estimates were too low.

Lockheed Martin’s LCS-1 is being built by Marinette Marine in Wisconsin, while General Dynamics’ LCS-2 is being built at the Austal USA shipyard in Mobile, Ala.

Lockheed Martin’s version resembles a traditional frigate or destroyer but features a sleek, semi-planing hull, while General Dynamics’ version is an all-aluminum three-hulled vessel.

 

Recent Espionage Cases Involving China

Thursday, April 3, 2008; A10

March 24, 2008: Chi Mak, a former engineer at a naval contractor, is sentenced to 24 1/2 years in prison for conspiring to export warship technology to China. He was also convicted of acting as an unregistered foreign agent of China.

March 7, 2008: WaveLab, a Reston company, pleads guilty in federal court to illegally exporting “controlled power amplifiers,” which have military applications, to China between February 2006 and October 2006.

Feb. 11, 2008: Dongfan Chung, a former Boeing engineer, is arrested after being indicted for allegedly stealing information about the space shuttle, the Delta IV rocket and the Air Force C-17 and passing it to China as an unregistered agent. The indictment said he made many trips to China, giving lectures and meeting with Chinese officials.

Jan. 25, 2008: Ding Zhengxing and Su Yang are arrested in Saipan for allegedly trying to buy and export amplifiers used in digital radios and wireless area networks that are controlled by U.S. export laws.

Dec. 3, 2007: Philip Cheng is sentenced in California to two years in prison for brokering the export to China of Panther series infrared cameras, which have night-vision technology.

Oct. 31, 2007: Bing Xu of Nanjing, China, is charged in New Jersey with attempting to export military goggles from the United States to China. Court papers claim he arrived in New York shortly after his Chinese employer transferred $14,000 to pay for the equipment, which is sold under restrictions.

Oct. 26, 2007: Noshir Gowadia is charged in Hawaii with transmitting information to China related to making cruise missile exhausts hard to detect.

Oct. 18, 2007: Qing Li is charged in California with conspiracy to export military-grade accelerometers, which have some applications in smart bombs, missile development and what the Justice Department described as “calibrating the g-forces of nuclear and chemical explosions.”

Sept. 26, 2007: Lan Lee and Yuefei Ge are charged in California with economic espionage and theft of trade secrets from two companies on behalf of a Chinese military program.

Aug. 1, 2007: Xiaodong Sheldon Meng pleads guilty in California to violating the Economic Espionage Act to benefit China’s Navy Research Center. He exported source code for simulation software for the precision training of fighter pilots.

Aug. 1, 2007: Yang Fung, president of Excellence Engineering Electronics, pleads guilty in San Francisco to illegally providing microwave integrated circuits to China, in violation of Commerce Department rules.

March 27, 2007: ITT Corp. pleads guilty and pays a $100 million fine for exporting night-vision data to China, Singapore and Britain, one of the largest such fines for export-control violations.

Chi Mak, Chinese Spy, ‘Slept’ in U.S. for 2 Decades

Chinese Spy ‘Slept’ In U.S. for 2 Decades
Espionage Network Said to Be Growing

By Joby Warrick and Carrie Johnson
Washington Post Staff Writers
Thursday, April 3, 2008; A01

Prosecutors called Chi Mak the “perfect sleeper agent,” though he hardly looked the part. For two decades, the bespectacled Chinese-born engineer lived quietly with his wife in a Los Angeles suburb, buying a house and holding a steady job with a U.S. defense contractor, which rewarded him with promotions and a security clearance. Colleagues remembered him as a hard worker who often took paperwork home at night.

Eventually, Mak’s job gave him access to sensitive plans for Navy ships, submarines and weapons. These he secretly copied and sent via courier to China — fulfilling a mission that U.S. officials say he had been planning since the 1970s.

Mak was sentenced last week to 24 1/2 years in prison by a federal judge who described the lengthy term as a warning to China not to “send agents here to steal America’s military secrets.” But it may already be too late: According to U.S. intelligence and Justice Department officials, the Mak case represents only a small facet of an intelligence-gathering operation that has long been in place and is growing in size and sophistication.

The Chinese government, in an enterprise that one senior official likened to an “intellectual vacuum cleaner,” has deployed a diverse network of professional spies, students, scientists and others to systematically collect U.S. know-how, the officials said. Some are trained in modern electronic techniques for snooping on wireless computer transactions. Others, such as Mak, are technical experts who have been in place for years and have blended into their communities.

“Chi Mak acknowledged that he had been placed in the United States more than 20 years earlier, in order to burrow into the defense-industrial establishment to steal secrets,” Joel Brenner, the head of counterintelligence for the Office of the Director of National Intelligence, said in an interview. “It speaks of deep patience,” he said, and is part of a pattern.

Other recent prosecutions illustrate the scale of the problem. Mak, whose sentence capped an 18-month criminal probe, was the second U.S. citizen in the past two weeks to stand before a federal judge after being found guilty on espionage-related charges.

On Monday, former Defense Department analyst Gregg W. Bergersen pleaded guilty in Alexandria to charges that he gave classified information on U.S. weapons sales to a businessman who shared the data with a Chinese official.

In March, the Reston company WaveLab pleaded guilty to violating export laws when it shipped militarily sensitive power amplifiers to China, according to court papers. A lawyer for the company said it neglected to get proper licenses and did not engage in “underhanded” behavior.

Dongfan Chung, a Boeing engineer arrested in February for allegedly passing classified space shuttle and rocket documents to Chinese officials, was accused in court documents of responding to orders from Beijing as long ago as 1979 — making him a second alleged longtime agent.

Yesterday, federal prosecutors in Chicago indicted a software engineer for allegedly stealing business trade secrets and trying to take more than 1,000 paper and electronic documents from a telecommunications company on a one-way trip to China last year.

The cases are among at least a dozen investigations of Chinese espionage that have yielded criminal charges or guilty pleas in the past year. Since 2000, Immigration and Customs Enforcement officials have launched more than 540 investigations of illegal technology exports to China.

The FBI recently heightened its counterintelligence operations against Chinese activities in the United States after Director Robert S. Mueller III cited “substantial concern” about aggressive attempts to use students, scientists and “front companies” to acquire military secrets.

Recent prosecutions indicate that Chinese agents have infiltrated sensitive military programs pertaining to nuclear missiles, submarine propulsion technology, night-vision capabilities and fighter pilot training — all of which could help China modernize its programs while developing countermeasures against advanced weapons systems used by the United States and its allies.

“The intelligence services of the People’s Republic of China pose a significant threat both to the national security and to the compromise of U.S. critical national assets,” said William Carter, an FBI spokesman. “The PRC will remain a significant threat for a long time as they attempt to develop their military capabilities and to develop their economy in order to compete in today’s world economy.”

While military technology appears to be the top prize, the Chinese effort is also aimed at commercial and industrial technologies, which often are poorly protected, several officials said. “Espionage used to be a problem for the FBI, CIA and military, but now it’s a problem for corporations,” Brenner said. “It’s no longer a cloak-and-dagger thing. It’s about computer architecture and the soundness of electronic systems.”

Calls placed to the Chinese Embassy in Washington requesting comment on recent spy cases were not returned. But Chinese officials have repeatedly denied that their country is stealing military technology. “We have reiterated many times that allegations that China stole U.S. military secrets are groundless and made out of ulterior motives,” Chinese Foreign Ministry spokesman Qin Gang said at a recent news conference in Beijing, commenting on the Mak case.

But U.S. intelligence and defense officials say China has been able to use technology of U.S. origin in a new generation of advanced naval destroyers and quiet-running, stealthy submarines.

Some of those secrets may have been obtained with the help of Mak, a 67-year-old electrical engineer who became a naturalized U.S. citizen in 1985 along with his wife, Rebecca Chiu Mak. The two settled in Southern California, where Mak eventually accepted a job with Power Paragon, a defense contractor that specialized in advanced naval propulsion technology. In 1996, Mak was given a security clearance at the “secret” level, which gave him access to sensitive engineering details for U.S. ships and submarines.

In 2003, Mak became the subject of an intensive federal investigation that included court-ordered wiretaps, secret property searches and the clandestine installation of a video camera inside his home. Through surveillance, FBI agents discovered that Mak was in the process of copying thousands of pages of technical documents onto computer disks, which he arranged to send to China using his brother and sister-in-law as couriers.

According to court documents, the Maks encrypted the disks to avoid detection and used coded words to arrange a drop-off of the disks to a Chinese intelligence operative. In one phone conversation, the brother, Tai Wang Mak, intimated that he would be traveling with his wife and a third companion he described as his “assistant” — a reference, prosecutors said, to the disks, hidden in his luggage.

The plan was foiled on Oct. 28, 2005, when agents arrested Tai Wang Mak as he was preparing to board a plane at Los Angeles International Airport. Chi Mak and his wife were arrested at their home the same day.

A key piece of evidence was a to-do list of apparent intelligence targets, written in Chinese script. The note, which had been shredded, was retrieved from Chi Mak’s garbage and painstakingly reassembled to reveal what prosecutors said were instructions from Beijing on the kinds of technology Mak should seek to acquire.

Mak, who testified in his defense at his six-week trial, denied he was a spy and said the information he copied was available from nonclassified sources on the Internet. Defense witnesses said that much, if not all, of the documents acquired by Mak were not officially classified, though transmitting them to China was prohibited under U.S. export laws. Mak’s attorney, Ronald O. Kaye, said his client was a scapegoat for other U.S. intelligence failures and a “symbol of the government’s cold war against the Chinese.”

In another recent case, former Northrop Grumman scientist Noshir Gowadia, who helped build the B-2 bomber, was indicted last fall for allegedly sharing cruise missile data with the Chinese government during a half-dozen trips to China. He is scheduled to go on trial in October.

A defense lawyer for Gowadia did not return calls, but Gowadia’s family in Hawaii has told local journalists that the charges stem from a misunderstanding.

Robert Clifton Burns, a Washington lawyer who specializes in export cases, said the Chinese acquisition of sophisticated U.S. technology “is fast coming out from under the radar” as authorities crack down on such shipments to foreign powers. But Burns, who closely tracks prosecutions in the area, said the government sometimes overstates the risks of exporting U.S. items.

“People who violate export laws should be thrown in jail, no question about it,” Burns said. But he added that there are also people “who would be better addressed by . . . a civil result where they get a small fine.”

Staff researcher Julie Tate contributed to this report