Rockwell Freed to Bid on New U.S. Contracts
The Air Force, announcing that Rockwell International had taken steps to prevent “labor mischarging,” lifted a six-week suspension Wednesday that prohibited the big defense manufacturer from bidding on new government contracts.
The company had been blocked from seeking new government work on Oct. 31, one day after pleading guilty to overcharging the Air Force for work on the EC-135 flying command post aircraft.
The Air Force, in announcing that it had rescinded the suspension, said the company had introduced a new cost accounting system, revised and increased time card training for employees and increased internal audits. In addition, the Air Force said, the company reported that it no longer employs those involved in the overcharging.
The service said these measures, and other assurances that it had received, “indicate that the company has taken the necessary steps to become a responsible contractor.”
Rockwell spokesman Earl Blount said the company, the nation’s second-largest defense contractor, would have no comment. The Air Force was unable to cite any major contracts that the company may have lost as a result of the suspension.
Suspending a company from bidding on government work has become one of the most frequently used responses after a firm has been convicted of, or has admitted carrying out, illegal activities in connection with military procurement. However, at least in the case of major companies on whom the Pentagon is particularly dependent, the suspensions have been for relatively short periods.
In an agreement filed in U.S. District Court in Dallas, Rockwell had pleaded guilty to 20 counts of fraud stemming from overcharges in 1982 by one of its divisions--Collins Communication Systems. Justice Department officials said that six Rockwell employees took part in filing phony time cards.
Under the agreement reached between Rockwell and the Justice Department, the company is to pay the government $1 million--twice the amount of the overcharges plus the cost of the government investigation that led to the plea.
