INSIDE WASHINGTON: Profiting from failure

Staff Writer
Columbus CEO

WASHINGTON (AP) — The Army's troubled $5 billion intelligence fusion network has been a source of lucrative contracts for companies whose employees once worked for the Army, but it has failed on its promise to make data seamlessly accessible to soldiers in the field, according to records and interviews.

The Distributed Common Ground System, or DCGS-A, was supposed to integrate information from a network of sensors and databases into a common intelligence picture as readily available at the Pentagon as in the farthest reaches of Afghanistan.

But the program has so far been a bust, with one memorable Army testing report finding it "not operationally effective, not operationally suitable and not survivable."

The performance failures of the DCGS-A network have been well-documented, but less scrutiny has been devoted to the revolving door between defense companies that profit from the troubled intelligence system and the military commands that continue to fund it, records show.

Several people who worked in key roles in Army intelligence left for top jobs at those companies. In the world of government contracting, that's not illegal or entirely uncommon, but critics say it perpetuates a culture of failure.

"The Defense Department and the Army are not going with companies that have proven solutions," said Rep. Duncan Hunter, R-Calif., a critic of DCGS-A who serves on the House Armed Services subcommittee on intelligence. "What they are going with are people who know government and the government acquisition process."

In one case, someone from the private sector ended up in government.

Russell Richardson, an engineer and businessman who was an architect of the program, made millions as a contractor, then joined the Army intelligence command as a senior employee.

Richardson was paid more than $13 million in 2011 after he helped sell a small military intelligence business, Potomac Fusion, to a larger intelligence contractor, he said. He also received stock valued at nearly $1 million in the buyer, Sotera Defense Solutions, he said, though he said that the stock later became worthless. Both Potomac and Sotera Defense had long counted on work on DCGS-A and related programs as an important source of revenue, records show.

Having signed a noncompete agreement with Sotera Defense, Richardson took a job as a senior civilian official with the U.S. Army Intelligence and Security Command, known as INSCOM, in June 2012. Among the command's assignments was improving DCGS-A. Army officials declined to disclose Richardson's salary but said the job paid between $120,800 and $181,500 a year.

Richardson, whose title was science adviser, said he wrote requirements for services that resulted in subcontracts for a variety of companies, including Sotera Defense, although he continued to own its stock.

It was all perfectly legal, an Army spokesman, Myron Young, said in a statement, because Richardson didn't play a direct role in awarding the contracts to Sotera.

But Richardson said he properly acknowledged a conflict of interest and removed himself from direct participation in Sotera-related decisions in 2012. In May 2014 he went further, disqualifying himself from any involvement in any matter that touched the company. He left the Army in July 2014 to join a cybersecurity company headed by former National Security Agency chief Keith Alexander.

"I followed the rules," said Richardson, who holds a doctorate in electrical engineering from Ohio State University.

Still, some critics see Richardson's seamless move from contractor to government decision-maker and back as problematic.

"He never should have held the job," said John Weiler, vice chairman of the IT Acquisition Advisory Council and a critic of military procurement. "He was a walking conflict of interest."

Richard says his position may have hurt Sotera by making Army contractors more cautious about awarding work to the company.

He rejects the criticisms of DCGS-A and doesn't apologize for the wealth he has reaped helping to build the system. The taxpayers got a good deal for the millions they paid the two contracting firms he led and sold, he said.

"Absolutely, I think they've done very, very well by me," he said.

In other examples, a major DCGS-A subcontractor, General Dynamics, hired Lynn Schnurr, a key backer of the system while she was chief information officer for Army intelligence. General Dynamics declined comment on behalf of the company and Schnurr.

Within two months of his March 2013 retirement as INSCOM's futures director, Timothy Hill joined Invertix Corp, which became part of Altamira Technologies Corp., as its director of intelligence strategies. In May 2013, Invertix Corp received a sole source contract worth $33 million — later increased to $48 million — from INSCOM.

In an email exchange with The Associated Press, Hill, who left Invertix/Altamira this year, said he was not involved in that contract or any other buying activity during his last year at INSCOM. He said he did not work on matters involving INSCOM while he was at the company.

"I have had NO contractual interaction with the Army or INSCOM since my retirement," Hill said.