Inside the DoD Reporter's Notebook: Director of Naval Intelligence can't access classified information after 9 months

Friday - 8/15/2014, 4:54pm EDT

"Inside the DoD Reporter's Notebook" is a biweekly feature focused on news about the Defense Department and defense community, as gathered by Federal News Radio DoD Reporter Jared Serbu.

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For most of his tenure, Navy's top intelligence officer has had no access to classified material

Vice Adm. Ted Branch has been Director of Naval Intelligence for 13 months. But for the last nine of those months, he hasn't been allowed to see any intelligence — classified intelligence, at least.

Branch has not been accused of wrongdoing of any kind thus far, but he is one of several senior Navy officials who are part of the investigation into the bribery scandal involving Glenn Defense Marine Asia, and as a result, his classified access has been temporarily suspended for the large majority of the time he's been in his current role, which also includes serving as Deputy Chief of Naval Operations for Information Dominance and as the Navy's Chief Information Officer.

Navy officials said last November that they made the decision to suspend access to classified material by Branch and another senior intelligence officer, Rear Adm. Bruce Lovelace, "given the sensitive nature of their current duties." As the DoD and Justice Department investigation into the ship husbanding scandal drags on, the suspension remains in effect.

"Vice Adm. Branch is performing functions to the extent restrictions placed on his access to classified material permit," Capt. Dawn Cutler, the Navy's acting chief of information and top spokeswoman wrote in an emailed statement to Federal News Radio. "Action to resolve the access suspension is pending additional information from the ongoing investigation conducted by the Department of Justice and the Naval Criminal Investigative Service."

A senior Navy official said most of Branch's duties that require access to classified material are being handled, for now, by his deputy director for naval intelligence, Lynn Wright.

Officials said that the suspension had to do with Branch's activities prior to assuming his current position. It remains unclear exactly what involvement investigators believe he may have had with Glenn Defense Marine, the Singapore-based company at the center of the bribery and fraud scandal, but Branch served as commander of Carrier Strike Group One for a little more than a year starting in October, 2009. The period coincides with part of the time when the company's leaders are alleged to have bribed Navy officials so as to direct warships into the ports where the firm provided husbanding services including fuel and resupply.

So far, seven people, including company owner Leonard Francis, three Navy officers, one retired officer and one NCIS agent have been charged in the matter. Four have pleaded guilty. According to prosecutors, Francis overcharged the Navy for husbanding services by millions of dollars once ships were docked in ports he controlled. He then used the proceeds to fund lavish dinners, entertainment and in some cases, prostitutes for the Navy officials who were cooperating with him, including by providing him with classified information about ship movements.


DoD procurement chief sees overuse of firm fixed price level of effort contracts

The Defense acquisition community can expect to see new guidance soon on when it is and isn't OK for contracting officers to make awards under firm fixed price level of effort (FPLOE) contracts.

That contract type, which pays contractors for a pre-arranged amount of work and not necessarily an outcome, has become overused in recent years and for situations that are inappropriate, according to Dick Ginman, the director of defense procurement and acquisition policy.

"I did not understand until recently the volume of work we were doing with firm fixed price level of effort contracts," Ginman told reporters at AFCEA's defense acquisition modernization conference in Washington last week. "The [Federal Acquisition Regulation] is pretty explicit that they ought to be used for contracts of $150,000 or less. We are doing contracts for more than that."

Ginman said his examination of recent contract data showed that the department spend $1.4 billion on FPLOE contracts in fiscal 2013. While most of the department's use of FPLOE was for awards of $250,000 or less, there were also several that ran into the millions of dollars.

He said it was too early to say what his guidance to the contracting community would be, but he surmised that one factor behind the rise in FPLOE has been that contracting officers have been using them as an alternative to time and materials-type contracts. DoD has issued other guidance discouraging T&M contracts because they do not provide any incentives for contractors to control costs.

According to the FAR, besides the $150,000 threshold, FPLOE contracts are only supposed to be used for "investigation or study in a specific research and development area," and only when the specific work to be done can't be clearly articulated ahead of time.

In other procurement policy news, Ginman says DoD expects to issue new guidelines for service contracting within the next several months. They'll take the form of an updated appendix to the department's acquisition bible, DoD Instruction 5000.02.

"Appendix 9," as it's known, was one of the large pieces of unfinished business left over when Frank Kendall, DoD's undersecretary for acquisition, logistics and technology, published a rewrite of 5000.02 late last year. Ginman didn't offer details on specific changes to the rules around service contracting, but he did note that his office has just delivered a business intelligence tool that's designed to give the department better insights into how it's buying services right now, and which corners of DoD are doing it well.

The tool draws upon data from the Federal Procurement Data System and is designed to answer historical questions about service contracting processes much more quickly than is possible today.

"It's a tool for people who expressly are not experts in data, where you can go in and ask, ‘How am I spending my money? What kind of contract types am I using? Am I doing it competitively? Am I doing it with small business?' Then, you can look for the variances so we can find who's doing it well and take the lessons from people who are," Ginman said. "It's designed to find out where we have pockets of excellence and how we share those pockets of excellence with others.


Former DARPA director violated ethics rules, inspector general says

Dr. Regina Dugan, the former director of the Defense Advanced Research Projects Agency crossed ethical lines during her term in office by endorsing products and methodologies developed by the company she had founded a few years earlier, according to a newly-released DoD inspector general's report.

Dugan, who led DARPA between 2009 and 2012 and is now an executive at Google, did not directly generate new revenues for her former company, RedXDefense while she worked in government, the report found.

But when briefing Defense officials about potential approaches for defeating improvised explosives devices in Iraq and Afghanistan, she did "advance a theory that was integral to RedX product development, promoted a 3-step process the RedX product suite used to implement the theory, highlighted the results of field trials which employed RedX products to demonstrate the efficacy of the theory and process, used the RedX slogan ‘Shoot the archer, not the arrow,'" according to the report.

The report was originally completed in March of 2013 and classified as "for official use only." The IG's office released a heavily redacted version this week in response to Freedom of Information Act requests.

The investigation substantiated allegations that Dugan had violated the Joint Ethics Regulation by using her government position "for the stated or implied endorsement of a product, service, or enterprise." The probe also looked into other allegations of misconduct but did not substantiate them. The specifics of those complaints are unknown because it's the IG's policy not to disclose unsubstantiated allegations.

According to the report, Dugan used PowerPoint slides and copyrighted RedX materials on several locations when she was briefing Defense officials on several occasions, including the then-commanders of U.S. Joint Forces Command and the Joint Improvized Explosives Defeat Association. The probe found the generals were impressed by her presentation on a concept she had developed at RedX called "The Bookends."

The report makes clear that Dugan explicitly recused herself from directly facilitating any contracts with RedX while she was in government, but that she did create potential business opportunities for the firm. The IG also found that while Dugan had sought "general" ethics advice from government attorneys, that advice was incomplete because she didn't disclose the specifics of the materials she intended to present.

The IG did not recommend any action against Dugan, since she had already left government by the time the report was finished.

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