Defense Agency Awarded Contract to Director’s Father's Company

Wednesday, March 02, 2011
Regina Dugan
Here’s a moral conundrum for you. Let’s say that the director of a federal agency awarded a contract to a company she founded and which is now headed by her father and employs her sister. Is this an unacceptable conflict of interest or just another run-of-the-mill revolving door Washington deal?
 
Here are the details in the real world. The Defense Advanced Research Projects Agency (DARPA) is one of the more intriguing corners of the U.S. government. It funds projects that explore the cutting edge of technology as they relate to national security.
 
On July 20, 2009, Regina Dugan, who had been a DARPA program manager from 1996 until 2000, was sworn in as DARPA’s first female director. Six months later, DARPA awarded a $400,000 research contract to a company called RedXDefense. In August 2010, RedXDefense received another contract from DARPA, an extension of the first one, this time in conjunction with the Department of Homeland Security. RedXDefense is a legitimate company that does important work in the field of explosives detection and threat screening and had done business with DARPA before. However, it’s the company’s history that makes these more recent contracts just a bit questionable.
 
That’s because it was DARPA director Regina Dugan who co-founded RedXDefense in 2005, along with her father, Vince Dugan, and her uncle, John Dugan. Regina Dugan served as the company’s president and CEO. When President Barack Obama tapped her to head DARPA, in accordance with federal ethics regulations, she agreed to disqualify herself from matters relating to RedXDefense. However, her father is currently the CEO of the company and her sister is the vice-president of marketing.
 
In an e-mail response to AllGov about the ethical anomaly of awarding a contract to the director’s family’s business, the media affairs office of DARPA insisted that “at no time did Dr. Dugan participate in any dealings between the Agency and RedXDefense related to this contract.”
 
Even if Dugan did not participate in the dealings between the agency she leads and the company run by her father, it surely must have come as a pleasant surprise to learn that DARPA’s contract management office had chosen the company she founded to do work for DARPA.
 
It is also worth considering whether President Obama and Defense Secretary Robert Gates acted wisely when they chose the CEO of a defense contractor to lead an agency that does business with that company.
-David Wallechinsky
 

Comments

David Minor 2 months ago
These comments are outrageous and obviously made by people who had a beef with either DARPA or former Director Larry Lynn. The accomplishments of Larry Lynn, both in and out of government are too numerous to list, If there was a way to identify the persons who posted the previous comments, undoubtably they would be proven to be somebody who failed to meet the extremely high standards at DARPA.
Steve 3 years ago
gabriel is lying when he claims that the director and dep, director (ie dugan and gabriel) are not involved in every funding decision at darpa. in fact, the program managers must not only pitch their programs to the director and dep. director, but there is a substantial paper trail of approvals with their signatures. my guess is that gabriel signs off on deals that dugan personally benefits from and dugan signs of on gabriel's deals. to juggernaut - you are clearly either completely ignorant of govt contracting rules or a beneficiary of the current corrupt regime. you comments show you for what you are and you have the stupidity to demonstrate your clown-like behavior to all the readers of this site.
John 3 years ago
dugan was a bad choice for director of darpa. she advanced her career when she was a program manager by sleeping with the then director larry lynn who was married and considerably older than dugan. lynn made a fool of himself by promoting her to the defense sciences board, etc. and this widely known affair had the effect of everyone joking about her and him (ie undermining his credibility as director) behind their backs. i suspect that this is only the tip of the iceberg - in fact, only last week the allgov reporters were claiming that the amount she sent to her company was $400k,, this week it is $1.8m. if you know how darpa works, you know that the agency rarely does the contracting itself - most of the agency's funds are sent to other parts of the govt who do the contracting in exchange for payment in the form of a skim of a few percent. the bottom line is that darpa funds are hard to trace unless you know the system and it will take very good investigators some time to find how much money is going to dugan's company. that aside, even if the amount is small, she has clearly broken the trust of a govt appointee and civil servant. if she wanted the job as director (and she did she her uncle gave over $1m to obama to get the job), then she should have divested herself of ownership - period. gabriel is another bad apple. he was a program manager at darpa when dugan was also a pm and he was caught in a few shady deals and barely escaped jail time. i think dugan appointed him as her deputy since they are cut from the same cloth. dugan and gabriel like to claim that they are both researchers and business people - nothing could be further from the truth. neither has published much of a anything and certainly nothing that is considered of value by the scientific community. as far as their business capabilities: dugan's company was herself and one other person until she took the job as director and her company has not had any revenue beyond govt contracts. gabriel was involved in a startup in pittsburgh, that had no sales and was acquired for near nothing by bosch. in short, neither of them has established themselves as competent at either research or business. they have both advanced themselves by manipulation (e.g., sexual relationships with superiors, etc.) and corruption (e.g., sending money to themselves while holding positions in control of funding). i hope a thorough investigation is done and they are punished with jail time.
sane person 3 years ago
This is the tip of the iceberg. First, this is a serious infraction that should result in immediate removal of Dugan from her position. She founded and owns this company and her father is only running it for her while she "serves her country" in her present position. She has not divested herself of ownership. Second, the person she appointed to oversee DARPA dealings with her company was the then Deputy Director of the Agency, Bob Lehaney, whom she fired a few weeks later. Third, her company is bragging about getting contracts from other branches of the DoD. You need to know that DARPA rarely actually contracts with companies. Usually the money is passed through DoD contracting shops like Navy SpaWar, Air Force Wright-Pat, etc. Therefore, I am certain that if a thorough investigation is performed, some if not all of this money from other parts of the DoD will have originated at DARPA. Importantly, the reason Dugan was able to get the Directorship of DARPA was that her family was able to get large donations to Obama's campaign. When she was a Program Manager (PM) at DARPA years ago, she advanced her career there by not being a great PM, but instead having a sexual relationship with the then Director of the Agency (who by the way was married).
Juggernaut 3 years ago
This item, with lame cattiness, is finding no fire where there is smoke. The relationships exist, no doubt, but you haven't found anything other than the conflict of interest firewall procedure seems to be in place. Yet you take up space being snide. What does that say about the quality of this blog, eh?

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