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Under Siege

Defense contractor claims investigation part of Army cover-up



When a team of Army fraud investigators raided the headquarters of a small Colorado Springs defense contractor two weeks ago, seizing files and computers, it cast a light of suspicion on Brenda Lucas.

Lucas' company, Network Resource Services, is under investigation for alleged fraud, military sources have since confirmed, though they refused to detail their accusations.

But in her first interview since the raid, Lucas says it's the Army that should be investigated. She denies having committed any fraud, instead claiming that the raid may have been part of an attempt to cover up government wrongdoing discovered by her company.

"We believe one of the reasons this is happening is to try to shut us up," Lucas told the Independent last week.

On the morning of Aug. 15, agents from a fraud unit of the Army's Criminal Investigation Division, reportedly flown in from Texas, stormed the company's offices at 102 S. Weber St.

Employees who were present say approximately 20 agents, many wearing blue jackets and bulletproof vests, herded them all into a single room and asked for identification and their social security numbers. The agents proceeded to confiscate large numbers of documents, along with the office's main computer server and its 13 computer hard drives, all of which was loaded into vans and taken away, employees said.

Army refuses to comment

The action effectively shut down Lucas' company, which held a $2.5-million contract to plan and install telecommunications wiring at the new headquarters of U.S. Army Space Command, being built at Peterson Air Force Base in southeast Colorado Springs. The company's entire staff of about 20 people is out of work as a result, Lucas says.

She says the raid came as a total surprise and that the agent in charge refused to provide any information, except to show her a search warrant obtained through the U.S. District Court in Denver.

The Army still refuses to comment on the action, other than to confirm that it took place and that Network Resource Services is under investigation.

"As far as what evidence we may have collected, that's part of the investigation, and we just normally don't put out details such as that," said Marc Raimondi, a spokesman for the Army Criminal Investigation Division.

Lucas, meanwhile, says she believes the timing of the raid was no coincidence.

It occurred, she says, just hours before she was scheduled to meet with Army Space Command to discuss what she claims were improper contracting practices on the command's behalf. The documents and computers seized in the raid contained evidence of these practices, which staff had just finished compiling earlier that morning, Lucas claims.

More than qualified

Lucas, a former intelligence analyst at Fort Carson, says she was honorably discharged from the Army in 1999 after an accident that left her disabled. She founded Network Resource Services in May 2000.

The company was awarded the Army Space Command contract in November 2001 as a small-business "set-aside." The federal government is required to award a certain amount of contract work to small and otherwise "disadvantaged" businesses, and Lucas fit several of the criteria: She is female, African-American, a disabled veteran, and her small business is located in a government-designated "historically underutilized business zone."

Lucas says her company was more than qualified for the job. But soon, she claims, it became evident that Army Space Command didn't really care about her company's expertise. She alleges that the command merely wanted to use her as a "front," making the command look good by hiring a disadvantaged business while most of the work would actually be performed by a large company posing as a subcontractor.

"I was the patsy," Lucas said.

Lucas claims the command badgered her to award subcontracts to the large company, which she declined to name publicly, citing legal reasons.

"They continually, time after time, approached us with scenarios where there was another contractor, a large business, that should be performing [our] work," she said.

However, Lucas says she refused. "I wanted to do the work."

As relations between the company and the command soured, disputes evolved over aspects of the contract, Lucas says. She says the company responded by hiring a law firm, Sherman & Howard, to review the contract.

The attorney handling the case, Skip Smith, did not return a message from the Independent. Lucas, however, says the law firm found several improprieties in the way that Army Space Command had set up and carried out its contractual relationship with Network Resource Services. Lucas declined to specify the nature of the alleged improprieties.

At 1 p.m. on Aug. 15, Lucas was scheduled to meet with the command's contracting staff to discuss the findings, she says. But around 9 a.m. that day, agents descended upon her office and took her documentation.

"They took almost everything," Lucas said.

Need to investigate

Without its files and computers, the company couldn't continue work on its contract, Lucas says. She notified Army Space Command on Aug. 16, and the contract was canceled.

The command won't comment on the investigation of Lucas' company.

"It's not appropriate for us to discuss an ongoing investigation done by an outside agency," said Mike Howard, the command's spokesman.

However, a military source speaking on condition of anonymity said the command is cooperating with the Army's Criminal Investigation Division.

In regard to Lucas' allegations, Howard said, "That should be all vetted out in any kind of an investigation, and we certainly welcome that. I'm not aware of any improprieties that go on within U.S. Army Space Command."

The command had paid Network Resource Services $1.5 million by the time the contract was terminated, Howard said. The command expects to choose a new contractor soon, he added.

Lucas, meanwhile, says she plans to seek a settlement from the command for the termination of her contract. She says she has also forwarded evidence of alleged Army improprieties to the U.S. Attorney's office and to Sen. Wayne Allard. Though agents seized all the evidence at her company's main office, Lucas' attorney also had copies of many of the documents, she says.

Lucas has discussed her case with Biff Baker, a former Army Space Command officer who claims he was fired from a civilian contract job earlier this year after blowing the whistle on fraud, waste and abuse in the U.S. missile-defense program. [See Rocket Racket]

Baker said Lucas' allegations, if substantiated, underscore the need for a "complete investigation" of all missile-defenserelated contracts.

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