Back in June, the U.S. Air Force issued a notice of suspension to L-3 Communications Special Support Programs Division (L-3 SSPD), formerly known as the Joint Operations Group (L-3 JOG). The Air Force found “adequate evidence” that L-3 JOG committed “serious and compelling” criminal offenses on its multibillion-dollar Special Operations Forces Support Activity (SOFSA) contract – namely, secretly spying on the email communications of its own employees as well as the employees of other contractors and the federal government. The Air Force immediately suspended L-3 JOG from receiving new contracts. The government also launched a criminal investigation.
It seemed like L-3 JOG was in a world of trouble, destined to remain in contracting “time-out” for a long time. But last week, despite an unresolved criminal investigation, the Air Force decided to end the suspension. The Air Force, after meeting with L-3 executives, changed its mind and decided that the offenses weren’t so “serious and compelling” after all. This decision, by the way, came just a few days after another L-3 subsidiary won a $200 million Air Force contract to develop high-precision sensors and targeting systems.
L-3 Communications was the sixth largest federal contractor last year with over $7.6 billion in contracts, about 90 percent of which were with the Department of Defense. Clearly, L-3 is a very important Pentagon supplier, but is it too important to be sidelined with a suspension even when facing a criminal investigation for conduct “indicating a lack of business integrity or business honesty that seriously and directly affects its present responsibility” to be a federal contractor? In short, is L-3 “too big to fail”?
Instances like this are a cause of great concern to Sen. Russell Feingold (D-WI). Feingold is worried about “agency capture” – the growing subservience of the government to the companies it contracts with or regulates. At a hearing this week, he pointed out that the number of suspensions and debarments has been decreasing over the last five years while the number of contractor misconduct instances has been increasing. (To prove his point, Feingold cited POGO’s Federal Contractor Misconduct Database.)
Senator Feingold issued a warning that should be posted in all federal agencies, next to the President’s portrait:
An agency should never be in a position where it is so dependent on a contractor to perform certain functions that it cannot take appropriate actions to suspend or debar that contractor.
-- Neil Gordon
See also: The Problem with Agency Capture