Thursday, September 19, 2013

Things that go boom

Posted By on Thu, Sep 19, 2013 at 1:25 PM

click to enlarge The Sourdough Ranch in Teller County is zoned for agriculture, not explosives. - PAM ZUBECK
  • Pam Zubeck
  • The Sourdough Ranch in Teller County is zoned for agriculture, not explosives.

Back in June 2012, we told you about a local defense contracting firm, NEK Advanced Securities Group, that caused quite a disturbance in Teller County. ("Collateral damage," June 6, 2012.) For three weeks that spring, neighbors told us, explosions shook the area, scaring away elk, deer and birds. From the story:

"In March, north of Woodland Park on 480 acres known as Sourdough Valley Ranch, NEK was conducting military-style training using explosives that neighbors say rattled the windows and shook the foundations of the dozens of homes and businesses in the vicinity.

"By all accounts, NEK did stop soon after that March 26 letter. But neighbors also involved the state Department of Labor and Employment's Division of Oil and Public Safety. Regulators there found NEK had violated its explosives permit, in that it kept no records of its blasts."

So when the company's successor, Macalan Group Inc., made news this week by agreeing to pay more than $2 million to settle allegations it submitted false claims under a defense contract, it got our attention.

As far as we know, the company stopped setting off charges in Teller County last year, so that issue was resolved.

According to a news release on the U.S. Attorney's Office's investigation, "The claims resolved by this settlement are allegations only and there has been no determination of liability." Hence, there's no indication whether the company can or cannot continue to contract with the government.

Here's the release:

DENVER – The Macalan Group, Inc., formerly known as NEK Advanced Securities Inc. (NEK), a security contractor headquartered in Colorado Springs, Colorado, has agreed to resolve allegations that it submitted false claims in connection with a contract with the Joint Improvised Explosive Device Defeat Organization (JIEDDO), U.S. Attorney John Walsh announced on behalf of the Justice Department and its investigative partners.

NEK’s contract with JIEDDO required it to develop and deploy teams of specialized personnel to Iraq and Afghanistan to combat improvised explosive devices. The government alleged that NEK submitted false invoices for payment in connection with this contract that claimed excessive or unallowable costs. To resolve these allegations, NEK has paid the United States $2.08 million, and will also relinquish an outstanding invoice for $744,969, and turn over numerous weapons and accessories acquired under the contract.

“No government contract is more important than one that supports the security efforts of our nation overseas,” said U.S. Attorney John Walsh. “When a contractor fails to bill by the contract rules set up to protect American taxpayers, our office will diligently and aggressively seek to recover any losses, as this case demonstrates.”

“This settlement demonstrates our commitment to pursue contractors who fail to accurately bill the government,” said Stuart F. Delery, Assistant Attorney General for the Civil Division. “The Justice Department will continue to ensure that those who do business with the government do so honestly and fairly and uphold the integrity of our public contracting process.”

“We are very pleased with today’s settlement with over two million dollars back to the U.S. Government,” said Frank Robey, Director of the United States Army Criminal Investigation Command’s Major Procurement Fraud Unit. “Our special agents have worked tirelessly on this case, along with our partners in Federal law enforcement and the Department of Justice, and will continue to do so as we continue to scrutinize and monitor contracts affecting the U.S. Army.”

“The settlement in this investigation is the result of a highly successful joint effort by the Defense Criminal Investigative Service (DCIS) and our law enforcement partners from the U.S. Army Criminal Investigations Command and the Department of Justice, to include support provided by the Defense Contract Audit Agency,” said Janice M. Flores, Special Agent in Charge of the DCIS Southwest Field Office. “This settlement highlights the Federal Government's continuing resolve to recover losses to the American taxpayer when a contractor has claimed money to which it was not entitled. The United States must be able to count upon Government contractors to seek payment only for services performed or material provided, in conformance with their contractual obligations.”

The United States Attorney’s Office is grateful for the hard work of the investigative partners that produced today’s result, including the Civil Division, Commercial Litigation Branch; the Army Criminal Investigation Command Major Procurement Fraud Unit; the Defense Criminal Investigative Service; the Defense Contract Audit Agency; and, the Contract Integrity Center, Office of General Counsel, Defense Contract Management Agency.

The claims resolved by this settlement are allegations only and there has been no determination of liability.

Assistant U.S. Attorney J. Chris Larson and Department of Justice Trial Attorney Benjamin Wei handled this matter on behalf of the United States.

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