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Federal Contractor Misconduct Database (FCMD)

The federal government routinely awards contracts to companies with histories of misconduct, including contract fraud and other violations. POGO believes that providing this website will help to improve contracting decisions and increase public knowledge of how the government spends billions of taxpayer dollars each year. Read more…

Defense Articles and Services Brokering Violations

BAE Systems plc and its business units and subsidiaries – except its U.S. subsidiary, BAE Systems, Inc. – entered into a civil settlement with the U.S. Department of State for alleged violations of the Arms Export Control Act (AECA) and the International Traffic in Arms Regulations (ITAR). The State Department alleged BAE committed 2,591 violations of the ITAR in connection with unauthorized brokering of U.S. defense articles and services, and that the violations were “systemic, wide-spread, and sustained for more than ten years.” Under the terms of a consent agreement, BAE agreed to pay $79 million in fines and remedial compliance measures. The State Department also denied, pending further review, the export license applications of BAE subsidiaries BAE Systems CS&S International, Red Diamond Trading Ltd., and Poseidon Trading Investments Ltd. In light of its 2010 criminal conviction (see BAE Systems instance, “Foreign Corruption Global Settlement”), the State Department imposed a statutory debarment (under section 127.7 of the ITAR) on BAE but concurrently rescinded it, finding that the company had taken appropriate steps to mitigate law enforcement concerns.

Misconduct Type
Import/Export
Enforcement Agency
State Dept.
Contracting Party
None
Court Type
Civil
Disposition
Settlement
Date of Settlement
5/16/2011
Contractors Involved Penalty
Total
BAE Systems $79,000,000
Further Information Released
Federal Register Notice 5/25/2011
Consent Agreement 5/24/2011
Order 5/24/2011
Proposed Charging Letter 5/24/2011
State Department Press Release 5/24/2011

Federal Contractor Misconduct Database