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Justice Department reports fraud in manufacture of combat helmets

The Justice Department’s inspector general announced last week that defense contractor ArmorSource will pay $3 million to resolve potential claims against the company after an investigation showed its subcontractor, Federal Prison Industries, had manufactured defective helmets for the Army and Marine Corps.

The report stems from a whistleblower lawsuit settled last March in which two Federal Prison Industries employees, Melessa Ponzio and Sharon Clubb, alleged that ArmorSource and other contractors used improper materials and manufacturing methods for the helmets, in addition to falsifying test results.

Ohio-based ArmorSource used FPI -- a government-run enterprise that employs prisoners to manufacture a wide range of products exclusively for sale to the federal government -- to produce the helmets at FPI’s Beaumont, Texas facility.

According to the Aug.17 inspector general’s report, between 2006 and 2009, ArmorSource and FPI manufactured more than 126,000 helmets, for which ArmorSource was paid more than $30 million.

The inspector general said the 23,000 helmets FPI made at its Beaumont manufacturing plant were “quarantined” after a defects that “posed a potential safety risk to the user” were discovered.

All 126,000 of the helmets were later recalled.

The inspector general’s report said FPI “had endemic manufacturing problems” at its Beaumont facility, and that helmets produced there “had numerous defects," including "serious ballistic failures."

“Helmets were manufactured with degraded or unauthorized ballistic materials, used expired paint, and unauthorized manufacturing methods,” the report said.

The inspector general also found the FPI had doctored test results on the helmets, and that FPI staff instructed inmates to alter documents to indicate helmets had “passed inspection and met contract specifications.”

The inspector general faulted AmorSource for providing “inadequate oversight."

Investigators also said inspectors from the Defense Contracting Management Agency "did not perform proper inspections, lacked training, and submitted false inspection reports” that said they had inspected the helmets, even though they had not done so.

“At least in one instance an inspector certified the lots [of helmets] as being inspected over a fax machine,” the report said.

The report also said that a surprise inspection of FPI’s Beaumont facility in January, 2010, “uncovered inmates … openly using improvised tools on the [Army] helmets,” which damaged the helmets.

The report said the improvised tools also created “the potential for [their] use as weapons in the prison.”

The report said there was no evidence any military personnel had been injured or killed because of the defective helmets.

FPI’s Beaumont manufacturing facility was was closed and, the report said, “its entire staff transferred to other duties within the Federal Bureau of Prisons.”

No criminal prosecutions will result from the investigation.