Firm Saw Big Jump in Navy Contracts After Hiring Paisley’s Wife

The value of Navy contracts awarded to a Virginia consulting firm more than tripled in the four years after it hired the wife of Melvyn R. Paisley, then the Navy’s chief procurement official, Defense Department records show.

The firm’s business with the Navy grew more than twice as fast as its business with the rest of the Defense Department, the records show, at a time when Paisley supervised Navy procurement and his wife worked for the firm, BDM International of McLean, Va.

‘Black Project’ Business

The new Navy business awarded to BDM during this period included a share of a top-secret “black project” over which Paisley, as assistant Navy secretary for research, engineering and systems, had direct authority, an informed source told The Times.

Papers Seized at Home

Federal agents who searched the home of Melvyn and Vicki Paisley last month seized numerous documents relating to their ties to BDM. A search warrant made public Friday indicated that the items found included a report to the BDM executive who, sources said, oversaw that classified project.

Sources say BDM has not been a target of the expanding federal probe into corruption in the awarding of Pentagon contracts, but it has been subpoenaed in connection with the investigation. Paisley, who did consulting work for BDM after leaving the government, is the highest-ranking figure so far linked to the inquiry.

An attorney for BDM discounted any connection between the hiring of Vicki Paisley in 1983 and the increase in the company’s Navy business from $1.9 million that year to $6.6 million in 1987.

‘Nickels and Dimes’

“This is nickels and dimes, in a sense, when you’re dealing in the context of (multibillion-dollar) defense procurement matters,” attorney Robert Bennett said. In 1987, Navy contracts accounted for only 3.6% of the company’s income from the Defense Department, according to federal records.

However, a former Defense Department official said it was common knowledge in the Pentagon that Vicki Paisley worked for BDM, and he said he believed the firm developed a warmer relationship with the Navy after she arrived there.

One current Pentagon official said the BDM contracts were “awfully low-level stuff” and were not likely to have been handled by Paisley or his top aides. However, the official said he believed that Paisley’s close association with the company allowed BDM to get “a lot more educated on what they should be doing” to win more Navy contracts.

Worked for Boeing

Mrs. Paisley joined the firm in the spring of 1983 in a $40,000-a-year job, reportedly as a marketing researcher. She had worked previously for the Boeing Co. as an economics analyst and computer consultant and, after moving to Washington with her husband, had worked for a BDM competitor, the Computer Sciences Corp.

Afforded Special Access

A former executive of BDM recently told the Washington Post that his superiors at the research firm had told him “it would be helpful” if he found a job for Paisley’s wife. Another unidentified BDM associate of Vicki Paisley told the Post that she “gave us access to her husband.”

BDM, established in 1959, provides evaluations and analyses of military systems and operations to its clients, many of which are agencies of the Defense Department. The company, which has 3,700 employees and reported sales of $300 million last year, recently was purchased by Ford Aerospace Corp. of Washington and Newport Beach for $425 million.

When his wife went to work for BDM, Melvyn Paisley, who had responsibility for Navy contract awards, filed a memorandum with the Pentagon officially disqualifying himself from decisions involving the company.

However, sources said Paisley played a direct role in appointing BDM President Earle C. Williams in 1984 to the Naval Research Advisory Council, a panel of academic and industry experts who help the Navy assess its technology needs. The council’s members gain insight into the Navy’s development plans.

Became Private Consultant

And after he resigned from the Navy Department in March of last year, Paisley became a private consultant to BDM. Vicki Paisley had left her job for BDM around the beginning of that year, although she continued working for the firm as a consultant.

In fiscal 1982, when Paisley became an assistant Navy secretary, the value of BDM’s Navy contracts was $1.6 million, according to Pentagon contract records compiled by the Federal Procurement Data Center. The level of business rose to about $1.9 million in 1983.

In fiscal 1984, however, the firm’s Navy business jumped 63% to about $3.2 million, the federal records showed. That was the first full year in which Vicki Paisley was employed by BDM.

In fiscal 1985, BDM Navy business rose only slightly to $3.3 million, but in fiscal 1986 it leaped again, by 49%, to about $4.9 million. At the beginning of that fiscal year, Paisley had gained additional control over the Navy procurement process when then-Navy Secretary John F. Lehman Jr. abolished the Navy Materiel Command, the bureaucracy that had managed the procurement process.

Value of Pacts Rose 36%

Another significant increase in BDM Navy business came in fiscal 1987, Paisley’s last year in the Navy Department, when the value of BDM contracts with the Navy jumped 36% to $6.6 million.

Paisley left the Navy in March, 1987, before some of those contracts were awarded later in 1987.

Bennett, the BDM attorney, said the increase in BDM’s business with the Navy was not significant. He said it would be “very misleading” to conclude that BDM’s increased share of Navy business was the result of any favorable treatment by the Navy.

“If somebody has $1 million of business and then doubles it to $2 million, in this business that’s nothing,” Bennett said. He noted that BDM had made “a diligent effort to increase its Navy business” during the 1980s.

The Navy procurement budget rose from $21 billion in 1983 to $27.4 billion in 1987, an increase of 30%.

Small Part of Revenue

Only a small part of BDM’s revenue from government defense contracts comes from the Navy Department, with more than 80% of its overall business coming from the Army and Air Force.

In 1987, Navy contracts accounted for 3.6% of the company’s Defense Department income--$6.6 million of the firm’s $184.8 million in defense revenue. That share represented an increase from the 2.1% of BDM’s business coming from the Navy in Paisley’s first year as assistant Navy secretary.

FBI agents who searched the Paisley home June 14 were clearly interested in the Paisley-BDM relationship. Their inventory of 62 confiscated items, which was made public Friday, included 12 documents related to the consulting firm.

One of the documents was a memo of agreement between BDM and Athena Associates, a consulting firm headed by Paisley associate William M. Galvin, another key figure in the massive Pentagon fraud investigation. The memo was dated April, 1985--two years before Paisley left the Pentagon.

A second, apparently related document found in the Paisley home was an undated “consultant services report and request for payment” from Galvin to BDM Vice President Charles R. Wasaff. The payment is understood to have involved a counter-stealth project, supervised by Wasaff, to explore possible ship defenses against attacks from war planes undetectable by conventional radar.

“Black budget” programs such as this, which constitute the fastest-growing part of the Defense Department budget, have raised concerns in Congress, which exercises little control over them. Tony Battista, a former senior aide to the House Armed Services Committee, complained recently that the Pentagon sometimes will put a program into this category “not because its compromise would jeopardize national security but to circumvent the congressional review process.”

Listed as Subcontractor

An industry source said that BDM, which first became involved in the project in 1985, is now one of four subcontractors to Baltimore-based defense contractor Martin Marietta working on the sensitive Navy project. Until recently both Galvin and Paisley were consultants to BDM and Martin Marietta.

Among material sought by federal agents was “data pertaining to Martin Marietta’s classified naval contract,” according to the search warrant for Paisley’s home. It was not clear whether such information was found.

Bennett, the BDM attorney to whom all inquiries were referred, said: “In light of what we are hearing now, these consultancies raise questions. But in real time, there was nothing to them.”

He said Galvin, Vicki Paisley and Melvyn Paisley were all well-qualified consultants.