Justice Department watchdog summarizes investigations of $30 million project.
Two contractors -- one private and one government-owned -- manufactured defective combat helmets ordered by the Pentagon, costing the government millions, a watchdog said on Wednesday.
Justice Department Inspector General Michael Horowitz released a summary of two fraud investigations by his office and the Defense Criminal Investigative Service, with help from Army personnel, in response to whistleblower allegations made by two employees of Federal Prison Industries.
The defective products in two models were advanced combat Kevlar helmets used by the Army and lightweight helmets used by the Marines. The probes determined that the deliverables were made with “degraded or unauthorized ballistic materials, [and] used expired paint and unauthorized manufacturing methods.”
The main contractor, the Hebron, Ohio-based ArmorSource, won the order in 2006. It then subcontracted in two phases with the government corporation Federal Prison Industries working out of Beaumont, Texas (part of a prisoner reentry program run by the Federal Bureau of Prisons).
From 2006-2009, the two firms produced 126,052 Army helmets, for which ArmorSource received more than $30 million. Separately, FPI produced some 23,000 Marine helmets, of which 3,000 were sold and delivered to the Defense Department.
Investigators found that FPI had “endemic manufacturing problems” and that both companies failed to manufacture in accordance with contract specifications. Defects included “serious ballistic failures, blisters, and improper mounting-hole placement and dimensions, as well as helmets being in appropriately repressed to remove paint bubbles or blisters.
“A surprise inspection by the OIG and military personnel uncovered inmates at the Beaumont FPI facility openly using improvised tools on the ACH helmets, which damaged the helmets’ ballistic material, and created the potential for the tools’ use as weapons in the prison, thereby endangering the safety of factory staff and degrading prison security,” the report said. They also found irregularities in testing and quality control, including false inspection reports. ArmorSource was faulted for inadequate oversight of the process. Yet “the investigations did not develop any information to indicate military personnel sustained injury or death as a result of the defective ACH helmets.”
After an Army recall of 126,052 helmets, losses to the government were calculated at $19 million. In the case of the Marines, only 3,000 of the 23,000 manufactured helmets were sold and delivered, so the losses were under $1 million.
Officials opted not to file criminal charges. But the FPI’s Beaumont facility was closed and its staff transferred to other Bureau of Prisons assignments.
A civil settlement that produced a $3 million payment from ArmorSource under the False Claims Act, based on its ability to pay, was announced last March.