Feds intervene in suit over $3B computer contract

The U.S. Justice Department has intervened in a so-called "whistleblower" lawsuit that accuses several companies and former government employees of rigging a winning bid on a $3.2 billion computer contract at Stennis Space Center in Mississippi.

The lawsuit, unsealed Wednesday by a federal judge in Gulfport, Miss., claims three former or current federal employees conspired to steer the Stennis contract to Science Applications International Corp. A company started by one of those former employees had teamed up with Science Applications to bid on the contract.

The defendants allegedly shared secret information about the bidding process with Science Applications and chose a type of contract that favored the company's successful bid in 2004.

A notice filed by the Justice Department this week says the government only is taking over part of the suit, which private lawyers filed on behalf of David Magee, a former Stennis employee who reported the alleged bid-rigging scheme to federal agents and his superiors.

Lockheed Martin Corp. and a subsidiary that operates at Stennis also are named as defendants in the False Claims Act suit. The subsidiary, Lockheed Martin Space Operations, also had teamed up with Science Applications on the federal contract, the Justice Department said.

The federal government is intervening in the part of the case that includes allegations against Stephen Adamec and Robert Knesel, a former director and a deputy director of the Naval Oceanographic Major Shared Resource Center at Stennis; Haskin Dale Galloway, a former federal employee who is chief executive officer of Applied Enterprise Solutions; and Science Applications.

But the government isn't intervening in the part of the case against Lockheed Martin. Justice Department lawyers didn't explain why.

Lockheed spokesman Jeffery Adams denied the allegations in a news release and said the company was "gratified" the Justice Department didn't take over the portion of the lawsuit naming Lockheed as a defendant.

Melissa Koskovich, a spokeswoman for Science Applications, said the San Diego-based company has cooperated with the government during the past three years. She also denied the allegations, saying the company did not receive information that wasn't given to other bidders.

Paul Martins, a lawyer for Magee, said the government could still take over the case against Lockheed Martin.

Galloway, of Slidell, La., said he hadn't seen the suit and couldn't immediately comment. Knesel didn't immediately return a call for comment. Adamec, of Mooreville, Miss., has an unlisted telephone number.

In their court filing, Justice Department lawyers accused Adamec and Knesel of trying to conceal evidence by destroying the hard drive on Adamec's computer and hard copies of documents in Adamec's office.

The Justice Department estimates the scheme cost the federal government more than $116 million.

"The whole purpose of government contracting is that contractors and taxpayers have to feel confident there's integrity in the contracting process," Martins said. "That wasn't the case here."