Unisys Sues Armtec; Both Linked to Defense Scandal
Unisys Corp., a giant computer maker, moved on Monday to take further action against a tiny subcontractor in northern Florida that figures along with Unisys in the unfolding Pentagon procurement scandal.
Earlier this month, Unisys cut off its financial relationship with the subcontractor and Monday it filed a lawsuit against it. Unisys charged that the firm was illegally holding $1.1 million of equipment and that it may have been guilty of “improprieties” in its billing procedures.
The firm--Armtec Inc. of Palatka, Fla.--had been assembling wire harnesses for Unisys as part of a $150-million electronic naval contract. Unisys’ action to terminate its contract resulted in the shutdown of Armtec operations.
The lawsuit, filed in federal court here, is the latest development in the controversial relationship between the two companies, both part of the nationwide probe into defense procurement fraud.
Unisys’ actions against Armtec were taken after a Unisys audit found significant irregularities. Unisys “discovered what appeared to be improprieties in the billing procedures from Armtec to Unisys, resulting in possible overpayment to Armtec,” the lawsuit claims.
On Aug. 5, the day after the contract was ended, Armtec laid off its 89 workers. At the time, Unisys officials agreed to provide $66,000 in severance pay to the workers, provided that Armtec agreed to several contractual obligations.
A key stipulation was that none of the funds from Unisys be provided to three company officials: William Roberts, a former Unisys official and president of Armtec; Kenneth Brooke, the controller, and Charles DeClerk, according to the Aug. 4 contractual agreement.
Roberts, a well-known figure in the defense procurement community, is a close friend of Rep. Bill Chappell (D-Fla.), who chairs the House subcommittee on defense appropriations. Roberts, who established Armtec in Chappell’s district at the congressman’s urging, and Brooke are among those under investigation by federal officials.
Another stipulation by Unisys was that all the $66,000 go to the Armtec employees. In its suit, however, Unisys charged that Armtec officials had not honored that agreement because they failed to pay their employees for two of 15 days that the firms had agreed on.
On Monday, Armtec officials assailed Unisys’ efforts to retrieve its equipment. They said Unisys still owes them nearly $400,000 and that Armtec would not release the equipment until it is paid.
“We’re not going to let them have it until they pay us,” said Roberts’ wife, Evelyn. “I think they (Unisys officials) are in a little trouble. . . . I think they had some dirty diapers of their own.”
Unisys spokesman William Beckham said: “The agreement was to pay whatever was owed to those employees, and we had done that. . . . They decided not to carry through with their part of the deal.”
Staff writer Douglas Jehl in Washington contributed to this story.
