A Lockheed Martin subsidiary illegally used federal dollars to lobby for more federal money, according to a new inquiry by the Department of Energy’s inspector general.
Sandia Corp., a subsidiary of the Bethesda, Md., defense giant that held a contract to operate the nuclear weapons complex at Sandia National Laboratories, “used federal contract funds to engage in activities that were intended to influence the extension of Sandia Corporation’s contract with the department — a contract then valued at about $2.4 billion per year,” the IG said in a Nov. 7 report.
The noncompetitive contract extension was granted.
These activities ran afoul of federal rules “prohibiting the use of federal funds to influence members of Congress or federal officials with regard to an extension of a contract,” the IG said.
In 2009, Sandia formed a “contract strategy team” to make sure the company wouldn’t have to compete for an extension of its contract by showing that it would have the best price and performance.
Sandia, which had operated the New Mexico facility for 16 years, wanted an uncontested contract extension of seven to 19 years.
If Sandia could not prevent competing bids, then it wanted the criteria by which proposals were evaluated changed in its favor.
To accomplish these goals, Sandia hired Heather Wilson, a former Republican member of Congress from New Mexico. The cost of retaining her was “borne by taxpayers,” according to the IG.
An Energy Department official had warned Sandia against using taxpayer-funded time to contact members of Congress with policy recommendations, but the company continued to do so.
“We find that the position and actions taken by SNL to develop and execute the contract extension plan to be highly problematic,” the IG said, calling them “inexplicable and unjustified.”
Lockheed Martin officials reasoned that the activity was legal because they had done it before.
The company paid the Energy Department $226,000 last year to resolve the matter while officials continued to tally the amount of contract dollars Sandia spent to influence federal decisions.
Despite the unjustifiable use of tax dollars, the government extended Sandia’s contract without competition for 2.5 years, and then for another two to three years.
The Energy Department said it will use the extension time to prepare “for a full and open competition.”
Lockheed Martin spent $15 million on lobbying last year, more than all but a handful of companies, according to OpenSecrets.org.
