By The Hill Staff - 05/19/05 12:00 AM EDT
Sen. Chuck Grassley (R-Iowa) wants the Transportation Department to investigate a $16 million contract the Federal Aviation Administration (FAA) had with Crown Consulting, including allegations that some of the money was spent on pricey office furniture and “unauthorized and unexplained” trips to Las Vegas.
The FAA terminated its contract with the locally based information-technology firm, which specializes in systems used in the transportation sector.
But Grassley, chairman of the Senate Finance Committee, asked Transportation Department Inspector General Kenneth Mead to investigate why the contract was canceled for “convenience” rather than “default,” according to a May 12 letter from the senator. The distinction is important because canceling a contract for default could make it more difficult for the contractor to win future government work.
An FAA spokesman said the contract was canceled for convenience because it was “less contentious” to do so than terminating the contract for performance, or default. The costs of canceling would have been roughly the same had the contract been canceled because of performance, the spokesman said.
The FAA agreed to pay Crown 85 percent of the outstanding invoices for work over a disputed five-month period, or around $742,000.
Grassley noted in his letter that the payments were made despite the “contractor’s alleged failures to perform,” according to his May 12 letter.
A call to Crown seeking comment was not returned.
Under the contract, Crown was supposed to develop software for the FAA’s military operations division. The division, known as Milops, manages civilian use of airspace typically reserved for military aircraft.
The contract started in November 2002. A Senate staffer said Crown has been paid more than $15 million for work on the contract. The staffer said FAA officials were unhappy with the software Crown developed.
Contracting authorities also uncovered questionable spending by Crown employees, which led to the five-month suspension of payments.
The “suspicious activity” listed in Grassley’s letter includes $30,000 for office furniture, seven leased properties in Australia, a $3,500-a-month auto lease and trips to Las Vegas.
“I think it is clear that a thorough review of this contract is in order,” Grassley wrote.
The inspector general’s staff plans to meet with committee staff a week from tomorrow.
The inspector general was already looking into an allegation of a conflict of interest between Crown and the FAA. The wife of an FAA employee worked at Crown, but apparently the investigation has uncovered no wrongdoing on the part of the FAA employee, the staffer said.
However, an investigation is continuing into how Crown spent the money it received from the contract.
The staffer said that the review is part of a larger investigation into FAA contracting practices, something Grassley also sought.