SYSTEMS

A former employee, recently joined by the Department of Justice, has filed a lawsuit in U.S. District Court for the Southern District of Mississippi, alleging that Science Applications International Corp. and others improperly colluded with government officials to obtain a General Services Administration information technology contract worth up to $3.2 billion. An investigation on behalf of former and current employees of SAIC, who participated in the company plan was announced.

If you are a former and current employee of SAIC, who participated in the company plan, you have certain options and you should contact the Shareholders Foundation, Inc. at Email: mail@shareholdersfoundation.com

The Justice Department announced on Thursday, July 2, 2009, that it had joined the whistleblower lawsuit against SAIC, Adamec, Knesel and Galloway to get the $3.2 billion contract and then destroyed documents and computer hard drives to cover up the scheme seeking to recover a monetary award that is three times the actual damages the government suffered, plus civil penalties under the False Claims Act, which could lead the government to temporarily suspend SAIC from competing for new contracts. But Justice Department declined to join the portion of the lawsuit that alleged wrongdoing by Lockheed Martin. In a court filing in the Mississippi Federal Court the Department of Justice said that SAIC and an outside partner conspired with two government officials involved in the contracting process to taint the proceedings in SAIC's favor. The General Services Administration sought in 2004 bidders for a contract to provide support services to the NAVO MSRC--the Naval Oceanographic Major Shared Resource Center at the Stennis Space Center in Mississippi, which has provided state-of-the-art supercomputing resources to the military for the past 15 years.

In its suit, the Department of Justice alleges that in 2002 the two top officials at the Space Center who ultimately oversaw the $3.2 billion bid Stephen Adamec Jr., a member of the evaluation board that awarded the contract, and Robert Knesel, the director and deputy director of the Navy computer center at the Stennis Space Center in Mississippi, began meeting with former director of the Space and Naval Warfare Systems Command's Information Technology Center in Louisiana, Dale Galloway, to devise a plan for expanding computer operations at Stennis. The lawsuit says the three met even though Galloway's center had no business with the Mississippi facility.

In 2003 a report by the Defense Department's inspector general, which alleged waste, fraud and abuse and recommended administrative action against Galloway was released and Galloway resigned in June. According to court documents Galloway then formed a shell company, Applied Enterprise Solutions ”with no employees (other than Mr. and Mrs. Galloway), no offices, and no contracts,” in the name of his wife, Mary, a homemaker and self-employed photographer with no experience in the computer industry, so the lawsuit. Galloway then approached SAIC executives with the idea of bidding together on contracts that might become available under the program National Center for Critical Information Processing and Storage, (“NCCIPS”). During that time, top SAIC officials met frequently with Knesel and Adamec to design the program. According to the complaint, they met with the top computer official at the new Department of Homeland Security to win his participation in the program, and hired a lobbyist who began meeting with members and the staff of the Senate Appropriations Committee to win earmarked funding for the project.
Lockheed Martin, another big contractor that was already doing extensive work at Stennis, was recruited as a member of the SAIC team and according to the lawsuit at the end of 2003 Knesel began to secretly meet with Lockheed Martin employees about the project. According to court documents, Lockheed Martin and SAIC entered into a non-disclosure agreement in December 2003 concerning an "expansion opportunity" at the space center.

A few days before the requests for proposals were issued, SAIC hosted a meeting with Galloway and Lockheed Martin employees during which information about the request was disclosed and tasks were assigned to begin forming a bid and according to the Justice Department that was illegal. Adamec and Knesel gave SAIC, Galloway and Lockheed crucial non-public information that was never released to other prospective bidders and that gave them an advantage over other bidders when the request for proposals was finally sent out in February 2004, so the lawsuit.

The government also charges that Knesel and Adamec carefully structured the request for proposals so that only SAIC and a handful of other companies would be qualified to bid for the work, and that the specifications were drawn in such a way that SAIC would be the winner. In fact besides SAIC, only one other company submitted a proposal for the enormous contract. The contract was awarded to SAIC in April 2004 and Galloway's company Applied Enterprise Solutions became a subcontractor for SAIC, according to the suit.

According to the government, in October 2006, after being notified of Department of Justice's investigation, Adamec put all of his office documents relating to the NCCIPS in burn bags and gave instructions to his staff to do the same. The government claims he also instructed Knesel to have the hard drive and all backup disks to his computer destroyed.

Science Applications International Corp. announced on Monday, July 06, 2009 that it will strongly defend itself against the False Claims Act lawsuit, characterizing it as “without merit.” Melissa Koskovich, a spokeswoman for SAIC, said in a statement that “"SAIC has fully cooperated with the government over the past three years as this matter was reviewed. We have thoroughly examined the government's claims and found the allegations to be without merit.” and that “SAIC has destroyed no records associated with this case; to the contrary, upon learning of the government’s investigation, we took immediate steps to preserve all potentially relevant records and have made available any and all records requested,” Koskovich said “SAIC provided the government high-quality services under this contract, and there are no claims by the government to the contrary,” and SAIC said the aggregate payments to SAIC under the $3.2 billion contract task orders totaled approximately $115 million and that $3.2 billion was only the ceiling value of the contract.