NUWC tightens its rules
Published April 30-May 1, 2011
By Sean Flynn/Daily News staff
The Naval Undersea Warfare Center sent out a notice on Friday asking the 513 firms it has contracts with to notify NUWC contracting officials at least 60 days before the funding for their contracts begins to run out.
The warfare center took the action one day after SEA Corp - Systems Engineering Associates Corp. in Middletown - notified 15 to 40 employees they would be put on unpaid furlough because of delays in funding allocations for defense contracts.
NUWC spokesman David Sanders said the center has contracts with companies across the nation, with 39 of the companies in Rhode Island, 57 in Massachusetts and 25 in Connecticut.
Each firm was told that if its total costs are going to exceed 75 percent of the amount of their contracts in the next two months, they should notify NUWC in writing immediately. Some companies have multiple contracts.
The early notification is necessary because the Naval Sea Systems Command in Washington, D.C., which oversees NUWC, last week suspended the warfare center's authority to enter new contracts, initiate delivery orders on existing ones, or obligate new funding for the next phase or time period for those contracts.
NAVSEA took the action after Anjan Dutta-Gupta, 58, of Roswell, Ga., founder and president of the now-closed Advanced Solutions for Tomorrow in Middletown, admitted he paid bribes to Ralph Mariano, 52, of Arlington, Va., a civilian program manager and senior systems engineer with the Naval Sea Systems Command who oversaw NUWC contracts. They are charged with siphoning more than $9 million from naval contracts in a kickback scheme. Naval officials said an internal investigation revealed contracting problems that enabled the bribery scheme.
NAVSEA found failures to "sufficiently describe work ordered, effectively account for work ordered and received, and to provide proper surveillance and oversight of that work," according to an earlier announcement. To regain its contracting authority, the warfare center must present a detailed plan addressing the issues that led to the suspension. Officials do not have an estimate on how long that will take.
"NUWC Newport's contracting office remains operational with final review and approval coming from NAVSEA headquarters," said the warfare center statement issued on Friday. "NUWC Newport is working with NAVSEA to make the added oversight and review of contracting actions as expeditious as possible, while ensuring adherence to proper program management and contract administration."
Any company that does not notify NUWC of pending cash flow problems "not only places company employees at risk, it also disrupts other contracting actions when resources must be diverted to emergent, unplanned issues," the announcement said.
While there is now an extra step of review at NAVSEA in Washington, officials in both organizations want to prevent the interruption of supplies and services to the Navy and unnecessary disruption to the defense contractors. NUWC contracting officials are in the process of contacting contractors to verify the status of the funding and to develop a prioritized list to avoid future disruption caused by contract funding shortfalls.
Patricia K. Dolan, NAVSEA spokeswoman in Washington, said it is also up to the companies to notify NUWC in a timely manner so problems can be dealt with on a case-by-case basis as they arise. She said two companies with offices in Middletown, RITE Solutions and McLaughlin Research Corp., notified NUWC of funding issues and they could be addressed early.
Jim Lavoie, the chief executive officer of RITE Solutions, said the company does not have any problems currently. He said it is hard to say what the long-term impact of the organizational changes will be.
"We are trying to address this as an industry instead of company by company," Lavoie said.
He said area companies are working through the Southeastern New England Defense Industry Alliance, which includes among its members the defense contractors on Aquidneck Island.
Tim DelGiudice, chairman of the alliance, was not available for comment on Friday.
The Naval Undersea Warfare Center is considered to be the Navy's premier research, development, test and evaluation support center for submarine warfare systems and other systems associated with the undersea battle space.

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