Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, April 2, 1994 TAG: 9404040188
SECTION: NATL/INTL PAGE: A-1 EDITION: METRO
SOURCE: Associated Press
DATELINE: WASHINGTON NOTE: BELOW LENGTH: Medium
In a new page in the Pentagon's book of high-priced hammers and toilet seats, a House panel is investigating possible price gouging by the maker of an unmanned reconnaissance aircraft.
The spark plug connector helps run the motor of the Navy's Pioneer Unmanned Aerial Vehicle, a drone aircraft used to take reconnaissance videotape of battle fronts for Marines and other ground troops.
Three Navy whistle-blowers, frustrated by their own superiors, alerted the House Armed Services investigations subcommittee to what they said was chronic overbilling for spare parts.
Rep. Norman Sisisky, D-Va., chairman of the subcommittee, said the overpricing ``is in the same league as the $600 hammer and the $2,000 toilet seat.'' The subcommittee investigation is not complete, but a committee staff member said Friday that Sisisky wanted the probe publicly known to thwart possible Navy retribution against the whistle-blowers.
Sisisky said overpricing in the program potentially exposes the government to millions of dollars in excessive payments.
The committee probe turned up what appears to be egregious overpricing by the contractor, Pioneer UAV Inc. of Hunt Valley, Md.
``The subcommittee examined a spark plug connector. The contractor price quoted to the government to supply the replacement spark plug connectors was $544.09 and required a five-month delivery time,'' Sisisky said. ``One phone call to the original manufacturer of the part provided us the name of a Washington-area retailer. There, the staff bought the identical part for $10.77, including tax.''
Pioneer UAV Inc. is a joint venture run by Israeli Aircraft Industries, a company based in Israel, and Aircraft Armament Inc., also of Hunt Valley. Officials at Pioneer did not return a phone call Friday seeking comment. AAI officials had the day off and could not be reached.
Pioneer UAV has argued to both the Navy and the subcommittee that the Navy never paid $544 for the part. Instead, the connector was included in a ``parts package'' priced at $25,000. The committee has not completed an item-by-item breakdown of the parts package.
But a subcommittee investigator confirmed Friday that the price quoted by the company for the individual part is $544.
The investigation has turned up other problems with the drone, which runs on what Sisisky described as a snowmobile engine.
The Navy's own goal is to have 85 percent of its Pioneer fleet ready for use at any time. The subcommittee found that the Pioneer's actual combat readiness is 27 percent.
A key concern of the subcommittee is the Navy's response to the problem. The Navy investigated the Pioneer, which is based at the Point Mugu Naval Air Warfare Center Weapons Division about 40 miles northwest of Los Angeles. The probe concluded that ``the Navy is paying an excessive price for repair parts to support the Pioneer.''
But Sisisky says the Navy failed to aggressively follow through.
A Navy spokesman declined to comment Friday.
And rather than rewarding the whistle-blowers for their diligence, the Navy subjected them to internal investigation, according to Sisisky.
by CNB