Tag Archive: Broken Oversight

This is another article sent to me today.  Thank you reader!  GFS


 G. Florence-

 The Defense Contract Audit Agency (DCAA) is broken.  The Defense Contract Management Agency (DCMA) is broken.  And the Defense Security Service (DSS) is broken.  It looks like the entire contracting and security oversight of defense contractors is broken.

 An Old Navy Man


Pentagon Radically Reducing Oversight of Contracts Worth Tens of Billions

October 29, 2010  Nick Schwellenbach

The Pentagon has radically decreased the Defense Contract Audit Agency’s (DCAA) review of contracts, according to an October 18 DCAA memo obtained by POGO. DCAA’s job is to protect taxpayers from contractor overbilling.

“POGO has long feared contractors and their government allies would block DCAA from exposing contractor ripoffs,” said Nick Schwellenbach, POGO’s director of investigations.  “Why are billions of dollars being put at risk when Secretary Gates is demanding cost savings?”

According to the memo, contracting guidance “now limits contracting officer requests for audit services to Fixed-price proposals over $10 million and Cost-Type proposals over $100 million, unless there are exceptional circumstances.”

These audit services are reviews of cost data (referred to as “reviews”) and they entail an examination of a contractor’s cost proposal to the government.  In these proposals, contractors estimate how much it will cost them to accomplish work on a contract.

Previously, there was no dollar threshold for reviews on fixed-price contract proposals, but contracting officers would limit requests for DCAA reviews of proposals over a threshold tied to the submission of cost or pricing data, which is currently $700,000. The old threshold for reviews of cost-type proposals was $10 million, but could be lower if the contractor has systemic problems estimating costs.

In FY 2009, a total of at least $92 billion in Defense Department contracts fell between the old thresholds and the new ones, according to USAspending.gov.  The $92 billion figure is a conservative estimate – it reflects awarded and funded contracts, rather than contract proposals, which are often higher than the funded contract award amounts.

The guidance states that cost proposals below the new dollar thresholds for review may be sent instead to the Defense Contract Management Agency (DCMA). DCMA is typically less thorough than DCAA, according to a 2009 Wartime Contracting Commission report.  The DCMA also does not specialize in examining and verifying cost and pricing data.

The reason for this new restriction is DCAA’s attempt to perfectly comply with Generally Accepted Government Auditing Standards (GAGAS). With this standard, which requires meticulous documentation of findings, DCAA is unable to cover as much ground as they used to, thus the need to restrict “audits” as defined by GAGAS.  The number of DCAA reports produced annually has plunged: 33,801 in FY 2007 to 30,352 in FY 2008 to 21,276 reports in FY 2009.

Rather than subjecting reviews of cost or pricing data to GAGAS, DCAA should consider these reviews as financial advisory services, which are not subject to all GAGAS requirements.  This would better protect taxpayers and warfighters by allowing DCAA to review cost data and deliver advice to contracting officers in a timely fashion.

Founded in 1981, the Project On Government Oversight (POGO) is a nonpartisan independent watchdog that champions good government reforms. POGO’s investigations into corruption, misconduct, and conflicts of interest achieve a more effective, accountable, open, and ethical federal government.


Kathleen M. Watson is the Director of the Defense Security Service.  There is little I found about her on the net.  I suspect her past associations with the CIA might explain her lack of visibility.  Her background is law.  She has served as a staff attorney in the DoD Office of General Counsel, and Central Intelligence Agency’s Office of General Counsel.  Prior to moving to her current position with DSS, she served as Chief of the CIA’s Administrative Law Division. 

Ms. Watson’s current agency’s purpose is stated as:

“DSS ensures the protection of U.S. and foreign classified or sensitive information in the possession of industry; facilitates the personnel security process; delivers security education and training; and, provides information technology services in support of Department of Defense (DoD) and partner agency industrial and personnel security missions.”

 (I do not believe DSS has any responsibility for personnel security at this time.  I was told that this was all moved to another government agency.  I had a friend who weathered through all of the uproar surrounding this some time ago, and now works as an investigator for Office of Personnel Management.)

Given all of that it would appear Ms. Watson should have detailed knowledge and understanding of laws and policies regarding defense contracting and related personnel and oversight matters.  With someone of that standing at the helm, and overseeing her staff’s endeavors, it seems odd that Boeing ostensibly is in so much trouble.  If oversight is working, they should be unable to get in to so much trouble, before being redirected and brought back into the bounds of the law and government policy.  

Anybody have any perspective on this?  GFS

I have found out in my search that Richard Lawhorn is still the  Defense Security Service Field Operations Manager, located in the Washington DC/Virgina region, possibly Alexandria.  Other than that, I am not finding much on him on line.   Anybody know this person?  Or know of this person?



Part 2: Hundreds of aircraft mechanics improperly licensed


10:54 PM CDT on Friday, April 24, 2009


VIDEOApril 24th, 2009 Byron Harris reports. >More WFAA Latest News video View largerE-mail clipMore videoRelated links:News 8 Investigates

Federal Aviation Administration

Hundreds of aircraft mechanics improperly licensed

Search Video:

Is aircraft safety for sale?

A News 8 investigation reveals thousands of aircraft mechanics may have been improperly licensed in Texas since the early 1990s.

They have been scattered throughout the state and the country.

They may even have worked on the airplanes on which you or your family have flown.

The FAA issues the certificates that permit mechanics to fix the airplanes Texans fly on.

But we’ve learned that some of those licenses have been for sale.

“My opinion is that the FAA and the Southwest region is corrupt.”

These are the words of Gene Bland, a former FAA inspector.

His harsh judgment of his former employer comes in part from a case he worked on in San Antonio 16 years ago.

Examiners, approved by the FAA, were selling certificates to mechanics.

“Those people know that the FAA is not waiting there to catch them,” he said.

Some 250 mechanics had to be re-tested by the FAA, because the FAA-deputized examiners were cheating, giving mechanics the license to repair planes, when they weren’t necessarily qualified to do the job. That was in 1993.

Now a building at the San Antonio airport is the focus of a similar scandal.

It was home to Tobias Aerospace, where 1,300 mechanics have been tested – mechanics who work on aircraft flying in Texas.

What may have happened here is what some experts call a “shake and bake” school – where improperly-certified mechanics got certificates to do business.

The testing facility was headed by Brian Tobias, an approved Designated Mechanic Examiner, known as a DME. DMEs administer a two-part test to mechanics, for what’s known as an A&P certificate.

The first part – called the written test – is given on a computer.

The second is a grueling oral and practical exam between one examiner and one mechanic. The test can take as long as ten hours – the mechanic pays the examiner, usually $600 to take it. In theory, the more tests an examiner gives, the more money he makes.


Hundreds of mechanics appear to have been tested correctly. But for the last eight months, FAA investigators have been probing the operation.

“They have told me the charges against Mr. Tobias involves several governmental organizations, including the VA, for defrauding because VA paid for my A&P license,” an anonymous source said.

The ramifications spread far beyond Texas, all the way to Boeing in Seattle, because Tobias tested mechanics from all over the world, including dozens from Boeing, who could command higher wages, once they passed the test. Now the FAA is holding all those legitimate candidates in limbo.

“They have kinda been stonewalling me,” said a source.

“I think it is a horrible situation as far as many mechanics are being affected by it. We’re looking at thousands of mechanics having their A&P revoked or never issued and not being issued,” a source said.

Documents, e-mails and interviews indicate that at some point, Tobias Aerospace may have turned into a “shake and bake” operation.

The facility allegedly gave tests to applicants from foreign countries, in Spanish, through a translator, a direct violation of FAA rules.

“She was reading the questions in Spanish and translating it A,B, C,” a source said.

“There would be a van full of guys from South America. And these guys would go on in and start testing. They did not speak English,” another source said.

The FAA declined an on camera interview. The agency denies tests were given in Spanish.

But these mechanics, like many we talked to for this story, asked that we keep their identity secret.

That’s because the FAA has a history of punishing critics. Gene Bland was one.

“The people that have been whistleblowers in the FAA have paid dearly,” he said.

Tobias Aerospace was shut down by the FAA last year. Its rooms are empty now.

We called Bryan Tobias and he did not respond.

Then we stopped to see him.

We asked him how many people he tested last year. Was that figure 700?

“It wasn’t that many. You’ll have to leave my property,” he said.

One unanswered question is how much the FAA knew about the Tobias operation.

Mechanics must visit the FAA office before they’re even allowed to take an exam. They must be interviewed as part of Form 8610.

Those who couldn’t speak English, as required, should not have been allowed to take the test.

This all leads to questions of corruption.

Have FAA individuals been getting kickbacks?

“Yes, some of them have. They had to have because you can’t inspect these people. It could not have gone through the FAA office,” a source said.

A year ago the FAA was the subject of a congressional investigation for the way it inspected airliners.

Texas was the focus.

Now the issue is mechanics.

Texas is still the focus.

At stake again is safety.

This time, for a problem the agency hasn’t solved for 16 years.

E-mail bharris@wfaa.com.

 Broken Oversight, Investigations & Justice Dept. Affect Whistleblowers


I recently, received an email from the group administrator of a
Whistleblower group I belong to chastising the group members about
only sending in posts of direct implication and interest to
whistleblowers, not notes on general corruption etc. This post is
about the problem of focus and scope of the focus and why the
patterns of corruption we see are indeed most germane to every
whistleblower, and everyone else who cares about integrity in
government and industry.


Advice from effective investigators: keep a broad focus while
digging for the details; follow the money, search for patterns and
connections. The problem may be bigger than you think.


One has to wonder about the true depth of manipulation of the various
arms of our Justice Department. It appears that there has been quite
a lot of this lately. I mean by that, finding that the FBI and
others have been turned away from certain cases, or types of cases,
and put onto selected other more politically convenient lines of investigation.

Another part of the pattern of operations by the current
Administration or their minions appears to be effective use of a “red
herring” as it gets investigators off chasing other demons, and helps
divert public attention from dangerous ground.  I have heard from some

DoD whistleblowers that their experiences have included:  having initial response of shock and indignation over the merits of the cases taken to law enforcement/ investigative personnel  (Justice and others) agencies. That followed by investigations purposefully initiated with great energy and resolve by field personnel accompanied by check backs and good communication, only to have those law enforcement/investigative personnel, inexplicably after
a few weeks, become quite mute.


These whistleblowers have further explained that they have discovered the following kinds of things have occurred:


a.      Investigators were told to stop by higher ups, sometimes
quite a bit higher levels of management.

b. Investigators were loaded down with other work and told their
priorities, which did not include the whistleblower case of concern.

c. Investigators were removed from the case and another
investigator, in one case a very senior investigator are put on it
instead, one who appeared to be on marching orders to drag it out,
obstruct the investigation and make it “go away.”

d. The whistleblowers have also reported that even though well
developed cases were turned over to the appropriate three or four
letter acronym agencies for criminal investigations, including lists
of people to be interviewed, deposed, or subpoenaed, no contacts by
the investigator now in charge to interview or communicate with those
witnesses with further evidence whatsoever.

e. In one case, the investigator ignored a list of a dozen
witnesses, and spoke instead to an employee in an involved
department, who was new, and obviously had no history and no
knowledge of the case, which many other employees with more seniority
and experience did have knowledge of, and were listed in the
witness/source list that the investigator chose to ignore. The
investigator in this case was quoted, as saying the reason the case
was not going anywhere was that “No one will talk to me.” In the
mean time, the whistleblowers were informed by the witnesses on the
list waiting to tell what they knew, that no one had contacted them.
They understandably expressed frustration that the case was not being


It seems that many view things a bit myopically. This is somewhat
understandable due to the level of stress and pressure most
whistleblowers feel, and the lack of energy and time may have to
research and reflect while in the slowly heating pot surrounding
their own particular situation. Good communication and a broader
view are necessary.


This is not about just one whistleblower.  The problems we are having are not limited only to one agency or area. The stories that do break are symptomatic of a much bigger problem. A problem created not in small part by the corruption and excesses of those who have been in powerful positions of influence and control, and position to profit from those corruptions and
excesses. Justice and law enforcement are not being allowed to function like they are supposed to and that is affecting all of us, particularly “whistleblowers.”