Senators ask DoD to consider debarment for P&WC

Monday - 8/13/2012, 10:39am EDT

Two powerful senators are calling for the Defense Department to determine if a major DoD contractor should face further punishments, including contract suspension and debarment, after the contractor pleaded guilty to illegally exporting military software to China.

In a letter to Defense Secretary Leon Panetta and Secretary of State Hillary Rodham Clinton, Senate Armed Services Committee Chairman Carl Levin (D-Mich.) and Ranking Member John McCain (R-Ariz.) outlined their concern regarding the guilty plea of Pratt & Whitney Canada (P&WC), whose parent company is United Technologies Corporation (UTC).

In June, P&WC pleaded guilty to exporting the software, even though it was aware that it would help China to develop its first modern attack helicopter.

U.S. Attorney for Connecticut David Fein said P&WC knowingly committed the violations because it wanted to become the exclusive supplier for a helicopter market in China with projected revenues of up to $2 billion.

Under plea agreements by UTC, P&WC and fellow UTC subsidiary Hamilton Sundstrand, the contractors agreed to pay $75 million and implement other remedial measures in order to avoid prosecution for making illegal, false statements and delaying the reporting of administrative violations to the Armed Export Control Act (AECA) and International Traffic in Arms Regulations (ITAR). Those charges were deferred under the plea agreements. In addition, State partially debarred P&WC of its ITAR licensing privileges.

"To deter similar conduct by other U.S. defense contractors, we believe that the Defense Department should itself evaluate this case for the appropriateness of contract suspension and debarment," Levin and McCain wrote.

According to their letter, Levin and McCain expressed concern that the charges did enough to counterbalance the harm caused by the sale of the software. So far, no manager or employee has been singled out for criminal misconduct.

"The nature and number of these export control violations and the length of time during which they occurred raise the concern that they may have caused significant harm to our national security," the senators wrote. They went on to ask DoD to assess the full extent of harm caused by the violations and report its findings to their committee.

The senators also requested DoD and State to report on what oversight and enforcement measures were in place to ensure that contractors were complying with AECA requirements.

The Associated Press contributed to the reporting of this story.

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