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Tag: government contractor

Paragon Systems fined $52M for alleged fraud

Herndon-based federal contractor Paragon Systems agreed Tuesday to pay $52 million to resolve allegations by the U.S. Department of Justice that Paragon used its own subsidiaries to fraudulently win small business set-aside contracts, violating the federal False Claims and Anti-Kickback acts.

The company is one of the federal government’s largest providers of security, fire and emergency response and mission support services, according to the U.S. Department of Justice’s news release, and former top officials at Paragon allegedly directed female relatives and friends to “serve as figurehead owners of purported small businesses” to win set-aside contracts from the Department of Homeland Security that were meant to go to woman-owned small businesses and service-disabled veteran-owned small businesses, as well as other types of small businesses.

In 2020, Securitas Critical Infrastructure Services (SCIS) rebranded under its subsidiary Paragon Systems’ name. Paragon is a subsidiary of the Swedish security giant Securitas, which announced in September it had set a provision of $53 million to pay the settlement costs.

“The investigation relates to alleged misconduct by certain former employees and to Paragon’s relationship with various small business entities which were a direct or indirect party to contracts with the U.S. government starting around 2012,” Securitas said in a statement then. “Paragon is cooperating fully with the investigation.” According to a news release Thursday, the settlement will be paid throughout 2025.

In the alleged scheme, Paragon executives controlled Maryland-based limited liability companies Athena Services International and Athena Joint Venture Services, and these purported small businesses “surreptitiously paid substantial sums of money” — more than 300 payments totaling more than $11 million — as “consulting payments” to the former Paragon executives.

According to the DOJ, Paragon’s president, vice president of business development, vice president of operations, compliance manager and contracts manager were allegedly involved.

“Those who fraudulently procure, or assist others to fraudulently procure, small business set-aside contracts will be held accountable,” Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division, said in a statement. “When ineligible companies obtain contracts reserved for veteran owned or socially or economically disadvantaged businesses, they prevent the small business community from receiving the contracting opportunities that Congress intended.”

Athena Services International and Athena Joint Venture Services and their owner, Alisa Silverman, along with Paragon, agreed to pay more than $1.6 million to resolve their liability, as well as the allegations that ASI improperly received a Paycheck Protection Program loan that was forgiven in full. The DOJ filed a complaint against another purported small business, Patronus Systems, and its owner, Mabel O’Quinn, the news release said.

“This settlement is the largest civil recovery in over a decade by the Department of Homeland Security Office of Inspector General (DHS-OIG),” DHS Inspector General Joseph V. Cuffari said. “The settlement sends a clear message that the federal government will continue to investigate and prosecute fraud, waste and abuse to protect small businesses owned by service-disabled veterans and other socially and economically disadvantaged individuals. I am grateful for the continued partnership with the Department of Justice and for the whistleblower who initiated the complaint.”

Whistleblower Todd Pattison is set to receive more than $9 million as part of the settlement, the DOJ said.

V2X lands up to $747M Navy contract

V2X has received an up to $747 million U.S. Navy contract to maintain F-5 supersonic fighter jets used in military training exercises, the McLean-based Fortune 1000 aerospace and defense contractor announced Monday.

Under the single-award, indefinite-delivery, indefinite-quantity contract, V2X will be responsible for providing critical support and operational readiness of the F-5 aircraft, which the Navy and Marine Corps use to train pilots by simulating air-to-air combat and adversary combat tactics. Falls Church-based Fortune 500 defense contractor Northrop Grumman manufactured the aircraft.

“We are honored to have been selected for this critical endeavor, further solidifying our dedication to providing industry-leading support for our nation’s defense,” V2X President and CEO Jeremy C. Wensinger said in a statement. “We look forward to leveraging our expertise and capabilities to ensure the operational excellence of the F-5 aircraft and, by extension, the readiness of the U.S. Navy and Marine Corps.”

Work is expected to continue through November 2028 on the base contract, although there are three one-year options that could extend the contract through November 2031.

V2X formed in 2022 from the $2.1 billion merger of Colorado-based government contractor Vectrus and Mississippi-based The Vertex Co. The company reported $3.96 billion in 2023 revenue and has about 16,000 employees.

2024 Virginia CFO Awards: Large Business: Sean Daily, CAES

Sean Daily, chief financial officer of Arlington County defense technology contractor CAES, didn’t set out to forge a career in defense. But an interest in corporate finance, sparked by an internship at Marriott International, combined with an opportunity to join Lockheed Martin after his graduation from Virginia Tech.

Soon enough, “I developed an interest in the industry,” he says. “And as you spend years within aerospace defense, you really begin to connect to the mission.”

He spent almost 19 years at Lockheed Martin, earning his MBA at George Washington University through the company’s finance leadership development program and working his way up to vice president of finance and business operations. He led a team of 730 finance professionals and was responsible for financial management, pricing, program finance and control, contract negotiation, and financial administration for government and commercial programs.

His experience showed him that much of the industry’s energy is directed toward innovation and creative problem-solving. 

“A lot of times, I think the industry is misrepresented as a warmonger, but it’s really not,” he reflects. “It’s really about protecting and serving, and also exploring. We do a lot of scientific missions and space-based missions, which are really helping society at large.”

After leaving Lockheed in early 2020, Daily pursued some entrepreneurial ventures, including as a franchise owner of fitness studios. But he was ultimately drawn back into corporate financial leadership in the field he had come to feel so passionate about, joining CAES as a senior vice president and CFO in January 2021.

There were challenges for him to manage from the start of his tenure, considering that CAES (Cobham Advanced Electronic Solutions) was created in 2021 as a standalone entity within its parent company, Cobham, which was itself purchased by private equity firm Advent International in 2020. In 2023, Daily oversaw the divestment of CAES’ Space Systems division to private equity firm Veritas, a transaction reportedly totaling nearly $2 billion. And then, in June, he saw the culmination of another mega-deal he’d worked on, the announcement that Honeywell plans to acquire CAES this year for $1.9 billion in an all-cash transaction.

That’s a lot of change to manage in a relatively short period of time, and Daily has led his team through it all with a focus on ensuring that everyone feels confident and can act with clarity.

“It’s really for me about trust, transparency, collaboration and teamwork,” he says. “In order to get that trust, people have to feel you’re looking out for them and you’re connecting with them on an individual level.”

Ensuring workers feel that high level of connection centers on cultivating honesty and transparency, he says: “I tell people, ‘You may not like the decisions that I reach, but you’ll never be confused by how I reach them.’ I think people appreciate that.”

Dave Fink, senior vice president and chief human resources officer at CAES, says it has been vital to have a finance leader with a future-oriented, strategic view of directing institutional change.

“Having personally witnessed Sean’s incredible business savvy and work ethic, I’m very happy to see this recognition, as he would never be the one to blow his own horn,” Fink says. “I’ve worked with a lot of CFOs, and Sean stands out as the best and brightest by the way he looks far into the future and then builds the road to help the team get there.”

Daily relishes the hard work of leading his team in a fast-changing corporate environment.

“What I really love about my job is the holistic view that you get in finance,” he says. “You get to see the entire enterprise and understand the breadth of the organization. You also get to help navigate through challenges. If you’re doing your job really well, you see the challenges before they even materialize and help make sure that they never impact the business in a negative or harmful way.”

Leidos names first chief AI officer

Leidos has named Ron Keesing its first chief AI officer, the Reston Fortune 500 contractor announced Tuesday. 

Keesing, who joined Leidos in 2004, has more than two decades of experience in artificial intelligence, machine learning and advanced analytics. His roles have included serving as founding director of the Leidos AI Accelerator and as senior vice president of technology integration, responsible for “driving mission-critical AI as a core discriminator of the company’s data-driven solutions.”

In addition to earning a bachelor’s degree in symbolic systems and a master’s degree in biological sciences from Stanford University, Keesing has a MBA from the University of Maryland, according to his LinkedIn page. 

“Ron Keesing’s appointment as chief AI officer marks a pivotal moment for Leidos,” Leidos CEO Tom Bell said in a statement. “As we navigate a landscape shaped by rapid technological advancements, his leadership will be instrumental in ensuring that AI remains at the forefront of our solutions. At Leidos, we don’t view AI as a replacement for human ingenuity but rather as a trusted partner that enhances our capabilities to deliver unparalleled support for critical customer missions.”

Leidos’ approach to AI, Keesing explained in the news release, is rooted in “anticipating technological trends and leveraging AI’s potential to solve complex challenges across our customers’ missions.”

Also on Tuesday, Leidos announced second quarter results, including revenues of $4.1 billion, up 8% year-over-year.  

On Monday, Leidos reported the U.S. Defense Information Systems Agency has awarded the company an $823 million task order to provide operations and sustainment for the Department of Defense Network program (DoDNet).

Leidos provides technology, engineering and science services to defense, intelligence, civil and health market customers. It has about 47,000 employees and reported approximately $15.4 billion in 2023 revenue.

Honeywell to purchase Arlington-based CAES for $1.9B

Honeywell, a multinational conglomerate based in Charlotte, North Carolina, announced Thursday it plans to buy Arlington-based aerospace and defense technology company CAES for $1.9 billion in cash from private equity firm Advent International.

Formerly known as Cobham Advanced Electronic Solutions, CAES was founded in 1934 and was acquired by Advent in 2020. According to Honeywell’s announcement, the acquisition will enhance Honeywell’s defense tech portfolio, including new electromagnetic defense tools for end-to-end radio frequency signal management. “The combined company will grow Honeywell’s established production and upgrade positions on critical platforms that include F-35, EA-18G, AMRAAM and GMLRS, while also introducing offerings on new platforms like Navy Radar and UAS and C-UAS technologies,” the statement said.

The Wall Street Journal reported the deal Thursday morning, noting that it comes when military spending has ramped up amid long-standing conflicts including Russia’s invasion of Ukraine and the Israel-Hamas conflict in Gaza.

The purchase is set to close in the second half of 2024 and will add approximately 2,200 employees, the news release said. According to Honeywell, $1.9 billion represents approximately 14 times CAES’ estimated EBITDA in 2024.

“As a trusted supplier and mission partner to our customers across advanced [radio frequency] capabilities, I couldn’t be more excited to see CAES join the Honeywell team and work together to build on the outstanding expertise of both companies,” Mike Kahn, CAES’ president and CEO, said in a statement. “Our extraordinary talent, RF breadth and world-class manufacturing facilities will offer new opportunities and further drive innovation for our industry.”

BWXT team lands $30B federal nuclear contract

A joint venture led by a Lynchburg-based BWX Technologies subsidiary has been awarded a potential $30 billion Department of Energy contract to operate a nuclear weapons plant in Texas, the company announced Friday.

The DOE’s National Nuclear Security Administration awarded the contract to PanTeXas Deterrence (PXD), a joint venture led by BWXT’s Technical Services Group that also includes Arlington County-based Fluor Federal Services, Chantilly-based SOC and the Texas A&M University system. The group will manage and operate the Pantex plant, a facility near Amarillo, Texas, that is responsible for maintaining the safety, security and effectiveness of the United States’ nuclear weapons stockpile, according to BWXT.

The contract includes an initial term of five years, and afterwards, NNSA can award three more five-year option periods. If all options are exercised, the contract will span 20 years at approximately $30 billion. The joint venture will assume operations at Pantex after a four-month transition period expected to begin in mid-July, according to the NNSA. The estimated value of the contract is $1.5 billion a year.

A Tennessee-based joint venture, Consolidated Nuclear Security — led by Bechtel National, a subsidiary of Reston-based Bechtel Corp., and including Reston-based Leidos as a minority member — currently holds the contract for Pantex and the Y-12 National Security Complex in Tennessee. CNS’ Pantex contract portion expires Sept. 30, according to the NNSA.

The work at Pantex includes nuclear weapons surveillance, assembly and dismantlement, as well as support of the weapons’ life extension programs, according to BWXT. Other tasks involve development and fabrication of high explosive components and storage and surveillance of plutonium pits.

“This is an important contract win for us and leverages our unique core competencies and capabilities in nuclear operations,” said Heatherly H. Dukes, president of BWXT’s Technical Services Group. “The PanTeXas Deterrence team was purpose-built to bring the very best of industry experience together to meet crucial global security imperatives. We look forward to getting started with a strong emphasis on safe and secure operations in full support of NNSA’s integrated Nuclear Security Enterprise.”

In February, the Pantex plant was in the news as a fast-moving wildfire in the Texas Panhandle threatened the facility. According to the Associated Press, Pantex is one of six production facilities in the NNSA’s Nuclear Security Enterprise, and has been the main U.S. site for assembling and disassembling atomic bombs since 1975. The last time Pantex produced a new bomb was in 1991.

Foster Fuels wins potential $442M FEMA contract

Brookneal-based fuel delivery provider Foster Fuels has won an up to $442 million contract to provide emergency services to the Federal Emergency Management Agency.

Under the five-year Defense Logistics Agency Energy (DLA) contract, which the Defense Department announced May 15 and Foster Fuels announced Tuesday, Foster Fuels will be the prime contractor for emergency fuel delivery services via truck, rail and/or transportation barge. The contract covers locations throughout the continental U.S. and its territories, according to the Defense Department.

The contract has a one-month option, with a May 31, 2029, completion date.

The fuel delivery company has held the federal emergency fuel delivery contract since its inception in 2006, according to a company news release. Its Mission Critical division has supplied fuel support during multiple natural disasters, including the 2010 Haiti earthquake, Superstorm Sandy in 2012, 2017 hurricanes Harvey, Maria and Irma, the 2021 winter storm in Texas and Hurricane Ian in 2022.

“This contract is not just a recognition of our company’s capabilities; it is a well-deserved acknowledgment of the joint efforts of our entire Foster Fuels team and our key partners,” Foster Fuels CEO Watt R. Foster Jr. said in a statement. “Our commitment to serving our nation as a mission-critical emergency fuel provider remains firm as we strive for continued excellence and perpetual growth in every aspect of our operations.”

Established in 1921, the privately held Foster Fuels provides residential, commercial, agricultural, transport and emergency fuel services, including delivering propane, diesel fuel, heating oil and lubricants.

Leidos wins $631M Army contract

Leidos has received a $631 million U.S. Army contract for life-cycle support of aerial sensors, the Reston-based Fortune 500 contractor announced Tuesday.

Under the Development, Integration, Acquisitions, Bridging to Logistics and Operations (DIABLO) contract, the company will provide equipment for the next 10 years. Leidos will develop, acquire, field and provide life-cycle support to aerial intelligence, surveillance and reconnaissance (ISR) sensors and integrated systems across a range of intelligence capabilities.

“We are excited about the opportunity to support the Army’s DIABLO program,” Tim Freeman, Leidos’ senior vice president for Airborne Systems, said in a statement. “Our full life-cycle work on sensors and airborne ISR is a legacy we’re proud of, and we look forward to expand upon that in support of the Army’s future capabilities work.”

The Department of Defense announced the single-award, indefinite-delivery, indefinite-quantity contract April 1, and the contracting activity is the U.S. Army Contracting Command – Aberdeen Proving Ground in Maryland. The DIABLO contract is under the Army Project Director Sensors-Aerial Intelligence’s direction. The contract has a five-year base with a five-year option, and the Defense Department estimates a completion date of March 31, 2034.

Leidos provides technology, engineering and science services to defense, intelligence, civil and health market customers. It has about 47,000 employees and reported approximately $15.4 billion in 2023 revenue.

Leidos receives potential $206M NGA contract

Leidos has won a contract valued up to $206 million from the National Geospatial-Intelligence Agency, the Reston-based Fortune 500 contractor announced Wednesday.

Under the single-award, indefinite-delivery, indefinite-quantity contract, dubbed Maru, Leidos will sustain and modernize geospatial processing for the NGA’s Exploitation Services Program. The contract extends existing software services, according to a March 22 NGA contract announcement.

The contract has a ceiling of $206 million, if all task orders are exercised over a five-year period. The initial task order award is $81 million, according to the NGA.

“Geospatial analysts and data scientists face a deluge of data at a demanding pace,” Roy Stevens, president of Leidos’ National Security Sector, said in a statement. “Leidos’ intelligence analysts and software experts are working together to create better geospatial tools to support NGA’s mission.”

Leidos will provide mission software development, sustainment and technology insertion, testing and user acceptance and enterprise deployment of analytical capabilities for geospatial processing. The contractor will be working on systems that support NGA’s day-to-day operations, including imagery and geospatial analysis.

Leidos provides technology, engineering and science services to defense, intelligence, civil and health market customers. It has about 47,000 employees and reported approximately $15.4 billion in 2023 revenue.

CACI wins up to $1.3B defense contract

CACI International won an up to $1.3 billion defense contract supporting the U.S. European Command and U.S. Africa Command, the Reston-based Fortune 1000 contractor announced Monday.

Under the five-year task order, CACI will provide communications and information technology solutions, modernizing critical software and hardware, optimizing network IT and communications and providing support for more than 11,000 end users across 60 locations. Two of the U.S. military’s 11 unified combatant commands, USEUCOM and USAFRICOM conduct global operations with NATO, allies and mission partners to deter conflict and respond to crises.

CACI’s work will include cloud enablement, edge computing, Commercial Solutions for Classified Program work (part of the National Security Agency’s commercial cybersecurity strategy), integration into the Joint All-Domain Command and Control (JADC2) — the Defense Department’s mission to provider “sensor-to-shooter” connectivity from each military branch into a single network — and advanced cybersecurity and zero trust solution implementation.

“CACI’s proven performance delivering responsive IT and communications in complex, multiregional [outside the contiguous United States] environments, coupled with our leading-edge technical solutions and accelerators, enhance USEUCOM and USAFRICOM’s rapid response capabilities,” CACI President and CEO John Mengucci said in a statement. “We are uniquely positioned to equip the warfighter to successfully execute their missions and enhance communication, collaboration and coordination with partner nations.”

Founded in 1962, CACI, a professional services and IT company, has 23,000 employees and reported $6.7 billion in fiscal 2023 revenue.