Military Contractor Faces Jail Time For Fraud

The president and owner of Jacobi Industries Inc., a Medford, N.Y. company, has pleaded guilty to conspiring to rig bids on U.S. Department of Defense (DOD) contracts for military tie-down equipment and cargo securing systems, the U.S. Department of Justice says.

Jacobi Industries provided military tie-down equipment and cargo securing systems to DOD. These products are used to secure vehicles, aircraft, munitions, shipping containers and other
specialized military cargo requirements for land, sea, and air transportation.

Roger Jacobi pleaded guilty in the U.S. District Court in Islip, N.Y., to a felony charge of bid rigging. Under the plea agreement, Jacobi has agreed to pay a criminal fine of $20,000, and to cooperate with the Justice Department's ongoing investigation. Jacobi could also serve up to six
months in prison. The terms of the plea agreement are subject to court approval.

Jacobi participated in the bid-rigging conspiracy from November 2001 to January 2005, during which time he and co-conspirators discussed and agreed among themselves not to compete by agreeing not to submit prices or bids against each other on certain contracts.

"Today's charges demonstrate our ongoing commitment to prosecute those who deprive the U.S. military of the benefits of competitive bidding on taxpayer funded contracts," says Thomas Barnett, assistant attorney general in charge of the Justice Department's Antitrust Division.

Jacobi is charged with carrying out the conspiracy with co-conspirators by:

-- Attending meetings and engaging in discussions regarding the sale of
military tie-down equipment and cargo securing systems;
-- Agreeing during those meetings and discussions not to compete on
certain contracts with the DOD by not submitting prices or bids on those
contracts;
-- Submitting bids in accordance with the agreements reached;
-- Selling military tie-down equipment and cargo securing systems to
the DOD under those agreements at collusive and non-competitive prices; and
-- Accepting payment for military tie-down equipment and cargo securing
systems sold at the collusive and non-competitive prices.

Jacobi is charged with bid rigging in violation of the Sherman Act, which carries a maximum sentence of 10 years of imprisonment, and a fine of $1 million for individuals and $100 million for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

The charge against Jacobi represents the fourth case to arise from an ongoing investigation into the military restraints industry, the Justice Department says.

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DOD Could Improve Pandemic Flu Preparedness, Audit Finds

An influenza pandemic could impair the military’s readiness, jeopardize ongoing military operations abroad, and threaten the day-to-day functioning of the Department of Defense (DOD) due to a large percentage of sick or absent personnel, according to a recent federal report.

Each of DOD’s nine combatant commands (COCOMs) has established or intends to establish a working group to prepare for an influenza pandemic, the Government Accountability Office (GAO) finds in a recent report. GAO is the nonpartisan investigative arm of Congress.

Additionally, eight of the nine COCOMs have developed or are developing a pandemic influenza plan. Half of the COCOMs have conducted exercises to test their pandemic influenza plans and several are taking steps to address lessons learned. Five of the nine COCOMs have started to use various media, training programs, and outreach events to inform their personnel about pandemic influenza. Each of the geographic COCOMs has worked or plans to work with nations in its area of responsibility to raise awareness about and assess capabilities for responding to avian and pandemic influenza, according to the GAO study.

GAO recommends that DOD take steps to clarify the COCOMs’ roles and responsibilities for pandemic influenza-related efforts, identify the sources and types of resources needed for the COCOMs to accomplish these efforts, and develop options to mitigate the effects of factors that are outside of their control. DOD concurred with each of these recommendations, GAO says.

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Intelsat to Test Internet Routing in Space for the U.S. Military

Intelsat General Corp., a wholly-owned subsidiary of Intelsat Ltd, today announced that it has been selected for an industry-government collaboration to demonstrate the viability of conducting military communications through an Internet router in space.

The Department of Defense project to test Internet routing in space (IRIS) will be managed by Intelsat General, and the payload will convert to commercial use once testing has been completed. The IRIS project is one of seven projects -- out of hundreds of applicants -- funded and announced infiscal 2007 as a Joint Capability Technology Demonstration (JCTD) by the US Department of Defense, the contractor says.

Intelsat says it is the first commercial satellite company to be awarded a JCTD program. The IRIS JCTD is a three-year program that allows the DOD to collaborate with Intelsat General and its industry team to demonstrate and assess the utility of the IRIS capability.

Cisco Systems will provide commercial networking software for the on-board router. In addition, SEAKR Engineering Inc. of Denver, Colo., will manufacture the space-hardened router and integrate it into the IRIS payload.

Concerto Advisors, a financial advisory firm based in Iowa City, Iowa, is organizing equity financing for a new company to provide the funds to design, build and operate the equipment used for the demonstration. Following the JCTD testing period, Concerto's affiliate will own the equipment, and Intelsat will operate the equipment on Concerto's behalf to provide services for government and commercial users.

"IRIS extends the Internet into space, integrating satellite systems and the ground infrastructure for warfighters, first responders and others who need seamless and instant communications," says Bill Shernit, president and CEO of Intelsat General. "IRIS will enable U.S. and allied military forces with diverse satellite equipment to seamlessly communicate over the Internet from the most remote regions of the world."

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