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Army Helmet Recall and Investigation Puts Spotlight on Federal Prison Industries, Inc.

Posted  September 7, 2016

By Sarah Poppy Alexander

To say safety standards are crucial to the Army is simply to state the obvious.  Service members rely on their equipment to function as intended in any number of life and death situations.  The Department of Defense thus depends on its contractors to live up to exacting standards to prevent any kind of lapse that may endanger servicepersons.  Unfortunately, contractors and subcontractors do not always follow the rules.

In March 2016, the Justice Department announced a multi-million dollar settlement with ArmorSource LLC after two whistleblowers alleged that ArmorSource provided faulty and dangerous helmets to the Department of Defense.  ArmorSource had subcontracted the work to the Federal Prison Industries, Inc., also known as FPI or UNICOR, a government corporation that employs federal prisoners to create products for federal government purchase.  Two FPI employees came forward as whistleblowers under the False Claims Act with evidence of failed safety tests, altered records, and disregarded contract requirements.  The helmets failed a number of ballistic safety tests and approximately 120,000 have been recalled since 2010.

A recently released Justice Department investigation on the debacle concludes that all parties along the chain were to blame for the lapses, but put particular emphasis on FPI’s lackadaisical approach to quality control.  FPI failed to provide proper tools for prisoners to use—in some cases, prisoners were using a screw jammed into a piece of wood as a Kevlar stripper, which would unsurprisingly damage a helmet.  They would then direct prisoners to alter helmets to falsely indicate that they had passed inspection.  Prisoners were also forced to alter records to hide FPI and ArmorSource’s fraud.

Prison-work programs are an often overlooked part of prison life.  As the helmet debacle shows, prisoners lack most of the basic protections presumed by the normal labor market.  They cannot quit their job, nor is it easy for them to refuse an order—even when asked to do something dangerous or illegal.  This sort of captive labor market is unfortunately a perfect environment for fraudsters.

Tagged in: Defense Contract Fraud, FCA Federal,

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