Sen. Claire McCaskill, above, and Sen. John McCain wrote a letter to the acting undersecretary of Defense for acquisition, technology and logistics, asking to review all sole-source contracts awarded to Alaska Native corporations before the 2010 DoD authorization law took effect. (Alex Wong / Getty Images)
Sens. Claire McCaskill, D-Mo., and John McCain, R-Ariz., have asked the Defense Department to review all sole-source contracts to Alaska Native corporations in the wake of an alleged fraud scheme that cost the government $20 million.
Both senators have previously accused Alaska Native corporations (ANC) of exploiting their ability to get lucrative sole-source contracts by subcontracting with non-ANC companies to perform most of the work. McCaskill and McCain were among lawmakers who pushed for language in the 2010 National Defense Authorization Act that requires a contracting officer to justify and get approval for a sole-source contract worth more than $20 million that has been set aside for small and disadvantaged businesses, which includes ANCs.
The additional oversight is meant to prevent fraud and abuse, such as the alleged scheme that led to the Oct. 4 arrest of two Army Corps of Engineers employees and an official with EyakTek, a subsidiary of an ANC.
The Army employees allegedly conspired with the former contracts director at EyakTek and a subcontractor to overcharge the government by $20 million and pocket the money. The men also planned to direct another contract to EyakTek's subcontractor by using specific language in the contract that favored the company and rigging the selection process, according to the indictment.
In http://mccaskill.senate.gov/files/documents/pdf/FINAL_SIGNED_Kendall.11.10.12.pdf">an Oct. 12 letter, McCaskill and McCain asked Frank Kendall, acting undersecretary of Defense for acquisition, technology and logistics, to review all sole-source contracts awarded to ANCs before the 2010 authorization law took effect.
The senators also ask for information, including subcontractor awards, on sole-source contracts greater than $20 million that went to small and disadvantaged businesses since 2006, and descriptions of the controls that the Defense Department will use to ensure that source-selection boards cannot be manipulated to favor certain bidders.