visibility3miles
21st Mar 2005, 19:47
L-3 Faces Federal Criminal Probe
On Defective Pilot-Radio Parts
By ANDY PASZTOR
Staff Reporter of THE WALL STREET JOURNAL
March_21,_2005;_Page_A3
L-3 Communications Holdings Inc. is under federal criminal investigation after one of its units supplied defective parts used in emergency radios to locate downed military pilots, according to the company and government officials.
Fallout from the suspect parts already has prompted a limited recall of radios as well as a government search in December of the offices of an Anaheim, Calif., L-3 unit, these officials said. With more recalls likely, the quality-control lapses have sparked concerns about the reliability of the military's latest-generation hand-held radios, which are intended to ensure communications with downed pilots, search-and-rescue teams and other units facing emergencies on the battlefield.
Pentagon investigators late last year began looking into the L-3 unit's quality controls. But the probe has expanded in recent weeks, these officials said, because Pentagon criminal investigators and contract-management officials suspect the same L-3 unit supplied thousands of other, potentially substandard parts over the years to a wide range of Army and Air Force weapons systems. The unit purchased many of the parts from lower-level suppliers, but it is responsible for supervising the manufacturing process, testing the parts and verifying they meet quality standards.
L-3 is a subcontractor to Boeing Co., which ultimately supplies the radios to the military. Boeing isn't suspected of any improprieties. A list of the additional programs for which the L-3 unit provided the parts is likely to be released shortly by the Pentagon.
L-3, a New York defense contractor, said it took appropriate action as soon as the quality-control problem was discovered, continues to evaluate further steps and "fully intends to stand behind" its products. James Dunn, a company senior vice president responsible for the unit, Interstate Electronics Corp., said that L-3 "is not construed as a bad vendor" by the Pentagon or by Boeing. "We haven't seen any evidence of criminal wrongdoing," he said.
L-3 and Boeing in September voluntarily recalled more than 1,400 radios, dubbed "survivor locator units," for use by pilots. But investigators are pushing them to recall roughly 2,000 more of the radios, of which some are slated to be installed in ground vehicles. That threatens to further complicate the initial phases of a top-priority program that eventually could produce nearly 50,000 radios and total revenue of more than $500 million for Boeing and its subcontractors. The radios cost roughly $10,000 each.
In a memo distributed to other military organizations late last year, the Defense Criminal Investigative Service said some of the parts failed to "meet the aerospace quality standards" required by the Pentagon, and Interstate Electronics "allegedly concealed" certain test failures from both Boeing and the Defense Department. The Dec. 22 memo from Daniel Willkens, deputy director of the DCIS, said the "significance of these allegations" prompted investigators to issue the initial warning, adding that "a supplemental safety alert will be issued" once additional details are uncovered.
Boeing had told Air Force contracting officials months earlier that the L-3 unit failed to make sure that correct manufacturing and inspection procedures were in place. On Friday, a Boeing spokesman said "we continue to work with the government" and subcontractors to make sure military customers "are getting quality-tested product." A spokesman for the U.S. attorney's office in Los Angeles, which is heading the investigation, declined to comment.
L-3 has disciplined some employees, switched parts suppliers and implemented enhanced quality-control safeguards, according to company and government officials. But investigators, government officials said, are looking into why it took months for the unit to take aggressive action to determine the quality of all the parts coming from the same suspect vendor.
The emergency-radio program previously suffered a series of stumbles, including development delays, shortcomings in operational tests and a price tag that nearly doubled over a few years.
Write to Andy Pasztor at [email protected]
URL for this article:
http://online.wsj.com/article/0,,SB111135867700384544,00.html
On Defective Pilot-Radio Parts
By ANDY PASZTOR
Staff Reporter of THE WALL STREET JOURNAL
March_21,_2005;_Page_A3
L-3 Communications Holdings Inc. is under federal criminal investigation after one of its units supplied defective parts used in emergency radios to locate downed military pilots, according to the company and government officials.
Fallout from the suspect parts already has prompted a limited recall of radios as well as a government search in December of the offices of an Anaheim, Calif., L-3 unit, these officials said. With more recalls likely, the quality-control lapses have sparked concerns about the reliability of the military's latest-generation hand-held radios, which are intended to ensure communications with downed pilots, search-and-rescue teams and other units facing emergencies on the battlefield.
Pentagon investigators late last year began looking into the L-3 unit's quality controls. But the probe has expanded in recent weeks, these officials said, because Pentagon criminal investigators and contract-management officials suspect the same L-3 unit supplied thousands of other, potentially substandard parts over the years to a wide range of Army and Air Force weapons systems. The unit purchased many of the parts from lower-level suppliers, but it is responsible for supervising the manufacturing process, testing the parts and verifying they meet quality standards.
L-3 is a subcontractor to Boeing Co., which ultimately supplies the radios to the military. Boeing isn't suspected of any improprieties. A list of the additional programs for which the L-3 unit provided the parts is likely to be released shortly by the Pentagon.
L-3, a New York defense contractor, said it took appropriate action as soon as the quality-control problem was discovered, continues to evaluate further steps and "fully intends to stand behind" its products. James Dunn, a company senior vice president responsible for the unit, Interstate Electronics Corp., said that L-3 "is not construed as a bad vendor" by the Pentagon or by Boeing. "We haven't seen any evidence of criminal wrongdoing," he said.
L-3 and Boeing in September voluntarily recalled more than 1,400 radios, dubbed "survivor locator units," for use by pilots. But investigators are pushing them to recall roughly 2,000 more of the radios, of which some are slated to be installed in ground vehicles. That threatens to further complicate the initial phases of a top-priority program that eventually could produce nearly 50,000 radios and total revenue of more than $500 million for Boeing and its subcontractors. The radios cost roughly $10,000 each.
In a memo distributed to other military organizations late last year, the Defense Criminal Investigative Service said some of the parts failed to "meet the aerospace quality standards" required by the Pentagon, and Interstate Electronics "allegedly concealed" certain test failures from both Boeing and the Defense Department. The Dec. 22 memo from Daniel Willkens, deputy director of the DCIS, said the "significance of these allegations" prompted investigators to issue the initial warning, adding that "a supplemental safety alert will be issued" once additional details are uncovered.
Boeing had told Air Force contracting officials months earlier that the L-3 unit failed to make sure that correct manufacturing and inspection procedures were in place. On Friday, a Boeing spokesman said "we continue to work with the government" and subcontractors to make sure military customers "are getting quality-tested product." A spokesman for the U.S. attorney's office in Los Angeles, which is heading the investigation, declined to comment.
L-3 has disciplined some employees, switched parts suppliers and implemented enhanced quality-control safeguards, according to company and government officials. But investigators, government officials said, are looking into why it took months for the unit to take aggressive action to determine the quality of all the parts coming from the same suspect vendor.
The emergency-radio program previously suffered a series of stumbles, including development delays, shortcomings in operational tests and a price tag that nearly doubled over a few years.
Write to Andy Pasztor at [email protected]
URL for this article:
http://online.wsj.com/article/0,,SB111135867700384544,00.html