A recent review of the Defense Threat Reduction Agency revealed that the office responsible for countering and eliminating weapons of mass destruction lacks adequate funding.  But the agency's employees may be responsible for some of its money woes.

A federal grand jury in Alexandria recently indicted a former head of security for the Department of Defense (DoD) agency in late June for attempting to award large government contracts to a company he helped create.

James E. Wright, the former chief of the Security and Counterintelligence Directorate for DTRA, and John D. Villanueva, a Department of Defense Contractor, are charged with conspiracy and committing an act of personal financial interest. The pair partnered to create VMW, Inc., the company that Wright allegedly helped grant a $450,000 government contract.

According to court documents, Wright assisted in the decision to award a contract to ZDK, Inc., which subsequently subcontracted VMW, Inc., to do the work. He then unsuccessfully attempted to mask his involvement with the VMW, Inc., by resigning from his position within the company and transferring his shares to his wife and son.

But this isn't the first time DTRA, an agency responsible for protecting Americans from weapons of mass destruction, has had to investigate contract negotiations. Last September, the DoD Office of the Inspector General (IG) released a report detailing the results of an audit of DTRA's contract negotiations, in response to allegations reported on a Defense hotline.

The audit revealed that the DTRA contracting officials awarded Northrop Grumman Information Technology a contract worth up to $375 million using "flawed techniques that were in conflict with the Federal Acquisition Regulation."

DTRA had issued a solicitation for the contract in January 2005, requesting proposals from all companies interested. According to the report, the RFP stated that "the Government anticipates awarding one contract under full and open competition." However, when only NGIT, a company that had previously been granted contracts by DTRA replied, officials entered negotiations with the company instead of reworking their initial solicitation to encourage more competition from other companies.

DTRA contracting officials also negotiated contract prices and terms after informing NGIT that they were the only company in the running for the contract and drafted a new proposal that contained very different requirements from the original contract solicitation. According to the IG report, they also agreed upon "abnormally high profit rates" and validated contract prices "based on a competitive contract award," despite having no competition.

Ultimately, the audit substantiated six of the seven allegations made on the Defense hotline and the director for DTRA was asked to terminate the contract. However, DTRA Director James Tegnelia believes that the agency followed Federal Acquisition guidelines "in determining that a single award contract was in the best interest of the Government" and has not complied with their request.

In response, the auditors argued "a single-award contract with a longtime support contractor will continue to raise questions of efficiency and fairness costs" and urged the Tegnelia to reconsider his decision.


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