Fallout filters down
Published April 29, 2011
By M. Catherine Callahan/Daily News staff
As Anjan Dutta-Gupta pleaded guilty in U.S. District Court in Providence Thursday to a charge of bribing a public official, a defense contracting firm in Middletown prepared to furlough some of its staff because of sanctions the Navy imposed after federal investigators charged Dutta-Gupta and an alleged accomplice with siphoning more than $9 million from naval contracts.
Dutta-Gupta, 58, of Roswell, Ga., founder and president of the now-closed Advanced Solutions for Tomorrow in Middletown, admitted Thursday afternoon that he paid bribes to Ralph Mariano, 52, of Arlington, Va., a civilian program manager and senior systems engineer with the Navy's Naval Sea Systems Command. While Dutta-Gupta was in court, 15 to 40 employees at SEA Corp - the Systems Engineering Associates Corp. in Middletown - learned they were being put on unpaid furlough because of changes made at the Naval Undersea Warfare Center in the wake of the kickback scandal.
A week ago, NAVSEA stripped NUWC of its contracting authority for an indefinite period. Locally, there were fears the suspension of the local submarine research lab's contracting authority - which includes releasing funds to pay for work - would adversely affect area defense firms that had nothing to do with the scheme Dutta-Gupta and Mariano are charged with carrying out for the past 15 years.
The furloughs announced Thursday afternoon at SEA Corp, which employs 370 people and is based in the Aquidneck Corporate Park, appeared to be the first example. The company performed about $73.5 million in work for the Navy last year.
"We took this action because the funding for some of our people has not been released," said Richard W. Talipsky, SEA Corp's vice president for corporate development, late Thursday afternoon. "We're working with NUWC to restore the funds as soon as possible. We expect the employees to be back on the job as soon as these funds are released."
NAVSEA learned of the planned furloughs and announced Thursday night that it had released funding to prevent them. Patricia K. Dolan, NAVSEA spokeswoman in Washington, D.C., said it notified NUWC, which was to inform SEA Corp. President Larry Willner received a phone call Thursday night, Talipsky said this morning.
"The word was that NAVSEA had approved the money and they were getting ready to get it to us," he said. "We have seen no formal contract ... we're waiting for the details."
NAVSEA has required NUWC to submit a "get well plan" to show how it will improve its procedures to prevent the oversights and lapses that allowed millions and millions of dollars to be drained from its contracting funds since 1996. It could take two to three weeks to prepare that plan and several more weeks for it to be approved, Dolan said earlier this week.
In the meantime, NAVSEA has taken over the role of issuing contracts, so the primary impact will be delays as contracts are analyzed and awarded before they become available to NUWC, Dolan said.
SEA Corp, like all other defense contractors, is required to let the government know it is running short of cash before delaying projects or furloughing employees, she said late Thursday night. The problem was with cash flow, not the contract, she said.
The company had been working "at risk" on projects, meaning it was being funded incrementally as the projects proceeded, Dolan said. Company officials were unsure about NUWC and NAVSEA's role in its funding, and decided on the furloughs until the funding was secured, she said.
"The funding situation has been rectified," Dolan said.
That is welcome news, Talipsky said, but SEA Corp still must find out what funding has been released before it rescinds the planned furloughs.
"We feel much more confident now that we've heard something from a Navy person that we know and trust," he said.
No layoffs were planned, Talipsky emphasized, but furloughs could last for days or weeks.
SEA Corp offers systems engineering, advanced software services and products, test and evaluation services and innovative technology research and development to a broad range of clients within the defense and manufacturing industries, according to the firm's website.
Jody Sullivan, executive director of the Newport County Chamber of Commerce, said she has heard that other contracting firms have been forced to furlough employees while they wait for NAVSEA to release funds. She declined to name the companies.
"It will be a tough six to eight weeks here for people, but the work hasn't gone away," Sullivan said Thursday.
It is unfortunate that the greed of a few people has caused so much uncertainty and suffering for the thousands employed in the area's defense industry, she and Talipsky said. While the changes to come in NUWC's procedures are necessary and beneficial to the taxpayers who have been footing the bill, many innocent people have been burdened unfairly, they said.
"It's all good in the future, but challenging in the moment," Sullivan said.
Staff reporter Sean Flynn contributed to this story.

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