Air Force suspends Booz Allen's San Antonio office

Tuesday - 2/7/2012, 8:39pm EST

(This story was updated Feb. 8 at 1:45 p.m. to include information from the Air Force's memo of proposed debarment).

The Air Force has suspended Booz Allen Hamilton's San Antonio, Texas, office and recommended it for debarment.

The company's San Antonio office was posted on the Excluded Parties List System Feb. 6, for a violation of the Federal Acquisition Regulations.

A memo of proposed debarment provided by the Air Force lists the San Antonio office as well as four company employees — two principals and two lead associates. The memo said the employees were involved in an incident involving a former government employee, who shared sensitive procurement data.

In an emailed statement, Booz Allen said it learned of the notice of suspension Tuesday. "(A)nd we determined that the issue relates specifically and solely to the San Antonio office and individually to two current and three former employees based there," the statement reads.

Background about the case

In April 2011, the Booz Allen San Antonio office hired retired Air Force Lt. Col. Joselito Meneses as a senior associate responsible for business development in military and civilian health markets. Meneses had previously served as the deputy chief of the Information Technology Division in the Air Force Medical Support Agency surgeon general's office.

In that role, Meneses was privy to non-public information, the memo of proposed debarment states, which could include information about source-selection, bids and proposals.

The Air Force memo alleges Meneses brought an external hard-drive, containing sensitive information, with him on his first day of work at Booz Allen.

In an email to colleagues — including his supervisor, David Henderson a principal at the San Antonio office — Meneses shared information about an IT services contract that Booz Allen was competing on a follow-on contract for, the memo said. That information provided the company "with an unfair competitive advantage," the memo states.

Meneses' supervisors "failed to report this improper disclosure," according to the memo, and Meneses continued to be involved in efforts to compete for the follow-on contract.

Later that month, another company employee reported the incident to Booz Allen headquarters' law office, according to the memo. In June, Meneses was terminated, and the San Antonio office later decided not to compete for the follow-on contract, according to the memo.

In September, the Air Force separately proposed Meneses for debarment.

The alleged conduct "raises serious concerns regarding subjects' business integrity, business honesty, and compliance with government contracting requirements," the memo states, "and the inadequacy of BAH San Antonio's ethics and compliance program, including the training provided to its personnel."

Suspension only applies to San Antonio office

When Booz Allen learned of the alleged incident, according to its statement, it "disclosed the matter and withdrew from participating in the procurement in question. We continue to cooperate fully with the Air Force on resolution, and want to emphasize that the government restrictions pertain only (to) our San Antonio office."

After providing the initial statement, Booz Allen did not respond to specific follow-up questions from Federal News Radio about how the suspension would affect employees or how many total employees would be impacted. However, a company spokesman said the suspension would only apply to new work and would not affect existing projects.

The San Antonio location employed, as of 2009, about 700 people, according to an article posted on the Booz Allen website. The same article listed the San Antonio office's focus areas as environment and infrastructure support, cybersecurity and military medical services.

In October, the Air Force suspended Iron Bow Technologies of Chantilly, Va., and two other contractors, alleging a violation of conflict-of-interest rules and incomplete work on a project at Andrews Air Force Base in Maryland.

A month later, however, the Air Force reinstated the contractors after the government reviewed all the facts, according to one of the contractors.

While suspensions and debarments have historically been underused, both Congress and the administration have pushed agencies in recent years to more aggressively suspend errant contractors.