Problematic contract lurks in intelligence nominee’s past

In December 2001, shortly after James Clapper took the helm of the Pentagon’s mapping intelligence agency, the agency privatized its information technology functions, giving 600 employees the choice of being laid off or going to work for a private contractor.

Now called the National Geospatial-Intelligence Agency, it awarded a no-bid, 15-year deal worth up to $2.2 billion to NJVC, a joint venture of two Alaska Native corporations. The privatization was set in motion by Clapper’s predecessor, but Clapper endorsed it, saying it would allow the agency to take advantage of the “best commercial practices.”

In 2006, a little-noticed congressional investigation into problems with Alaska Native corporations found that “NJVC’s performance has been seriously deficient with respect to security issues,” and that the firm was doing only about a third of the work specified under the contract. Yet NJVC got paid most of its performance fees anyway, the investigation found.

Clapper, who left the agency for unrelated reasons in June 2006, is now President Obama’s nominee to be director of national intelligence, at a time when Congress is pressing the intelligence community to get a handle on its massive use of private contractors. Clapper has never commented publicly on the security problems with his former agency’s major technology contractor, and was not asked about it during his Senate confirmation hearing.

On Thursday, the Senate Select Intelligence Committee voted unanimously to approve Clapper’s nomination and send it to the floor, where a vote is expected this week.

Alaska Native corporations, owned by Native tribes, get preferences under federal procurement law that allow them to win and keep large contracts without competition. NJVC remains a major contractor at the geospatial agency and received a no-bid expansion of the deal in 2009, federal records show.

Last year, a Senate subcommittee found that total contract revenues for all Alaska Native corporations had grown from about $508 million in 2000 to $5.2 billion in 2008. Most beneficiaries are not Alaska Natives, the inquiry found; Natives get about $615 a year in dividends.

It’s unclear whether Clapper took action to correct the deficiencies unearthed during the congressional investigation. Susan Meisner, a spokeswoman for the geospatial agency, declined without explanation to answer questions about the contract or provide documents that shed light on NJVC’s performance since 2005.

Allegations continue to trail the contract. In 2009, a former NJVC employee filed a federal whistleblower lawsuit alleging that he was fired in 2008 after complaining that company subcontractors “rampantly abused the leave policy, leaving early on a regular basis, not bothering to come to work for a large percentage of the time, and not regularly working 40-hour work weeks.” The suit was dismissed on a legal technicality.

Questions to Clapper were answered by White House spokesman Tommy Vietor, who said in an e-mail, “Mr. Clapper’s first day at NGA was Sept. 13, 2001 -- just days after the attacks. I think it should surprise no one that his first priority was ... not to re-litigate a contracting process carried out by his predecessor.”

Vietor did not say whether Clapper took action in response to NJVC’s poor security evaluations from 2003 to 2005.

NJVC President Jody Tedesco also declined to answer questions, saying in a statement that “the nature of our government services contracting work precludes us from discussing contract specifics.”

Clapper is familiar with the world of government contracting. When he left the geospatial agency in 2006, he joined the boards of three government contractors, two of which had been doing business with his agency. He also went to work full time for an intelligence consulting contractor.

The privatization of the mapping agency’s IT functions, which drew congressional criticism at the time, was the brainchild of Clapper’s predecessor, Army Lt. Gen. James C. King.

By law, the agency was supposed to allow its employees to offer a competing proposal. But King exercised an option to forgo that if the agency selected a contractor that was 51% owned by an American Indian tribe, according to news reports.

The project was underway when Clapper took office two days after the Sept. 11 terrorist attacks. He put it on hold but went forward with it in December, and the contract began in January 2002, congressional records show.

According to records published by the House Committee on Oversight and Government Reform, NJVC received a security score of zero in September 2003 and a security rating of “poor.” In one case, an NJVC employee “took clearly marked, classified documents off base and to the motel with him,” the records show.

An August 2004 evaluation gave NJVC a “marginal” security rating. The government found improper handling of bomb threats, improper handling of classified data, and improper securing of secure areas. However, NJVC received 87% of its maximum award fee.

In February 2005, NJVC received another “poor” security rating due to failures to properly secure classified vaults, failures to properly handle classified information, and the misuse of computers to access pornographic material, records show. Yet it received 77% of the maximum award fee for this period.

In 2005, NJVC employees were doing just 36% of the work, with the rest undertaken by subcontractors and agency employees, the documents show. The company is now doing 65% of the work, the White House says.

ken.dilanian@latimes.com