CONCORD — A government contractor based in Plaistow was sentenced in federal court this week to three years of probation and ordered to pay more than $83,000 in restitution for making false statements to the U.S. Dept. of Defense Logistics Agency, U.S. Atty. Scott Murray announced.
Enco Industries, Inc., was sentenced to three years of probation and ordered to pay $83,717.85 in restitution after the company’s president admitted to making false statements that it purchased oil sorbent mats from an approved company in Pennsylvania, when it actually purchased them from a different provider.
According to court documents and statements made in court, the Defense Logistics Agency (“DLA”) purchases operating supplies (“items”) for the U.S. military from government contractors through the federal supply system. The Department of Defense requires that all items conform to strict military specifications identified in its contracts. Contract solicitations include the Department of Defense’s specifications for the requested item.
An oil sorbent mat is one item the DLA acquires through the federal supply system. Because the mats are used to absorb flammable liquids, the mats are required to meet specifications requiring them to dissipate electrical charges to the ground.
According to court documents, in December of 2011, the DLA posted a solicitation to acquire approximately 96,000 units of hazardous material mats over a five-year period. The solicitation required, among other things, that the mats pass standards established in National Fire Protection Association for Static Decay and Surface Resistivity. The solicitation also required the selected government contractor to purchase mats manufactured by a company in Tipton, Pa., or another company in Pennsylvania.
According to court documents, Enco has been considered an approved government contractor since 2004. On Jan. 13, 2012, Enco’s government contracting manager submitted the company’s bid for the contract.
The bid claimed Enco would purchase the mats from the company in Tipton for $29.15 for each unit containing 100 mats during the first year of the five-year annually renewable contract. This statement was false because, when the bid was submitted, Enco did not intend to purchase the mats from the company in Tipton.
The court documents claim on June 18, 2012, the DLA awarded the contract to Enco and sent the company a purchase order that incorporated all the required specifications for the mats. From June of 2012 to October of 2013, Enco provided approximately 21,700 units to the DLA. To obtain payments, Enco’s office manager submitted claims to the Department of Defense.
Most of the claims were false, authorities said, because only seven units contained mats that were manufactured by the company in Tipton.
Enco received payments totaling $683,513.55 for these claims.
In August of 2013, an independent company concluded several of the mats it tested did not meet the contract’s requirements for static decay or surface resistivity. As a result, the DLA sent Enco a letter on Oct. 7, 2013, that notified the company that the contract might be terminated due to non-conformance.
In an October 2013 email addressed to the DLA, Enco’s president stated that Enco bought the mats from a non-approved manufacturer because the amount charged by the company in Tipton was prohibitive. In the same email, officials said, Enco’s president stated the company was unable to identify the non-approved manufacturer. This statement was false because, at the time of the email, Enco was able to identify the manufacturers from whom it had purchased the mats.
While speaking with Special Agents from the Naval Criminal Investigative Service (“NCIS”) and Defense Criminal Investigative Service (“DCIS”) on Feb. 21, 2014, Enco’s president stated that before Enco submitted its bid on the contract, the company received price quotes from the two approved manufacturers.
According to the court documents, Enco’s president also stated that Enco decided to buy the mats from the company in Tipton because its price was lower. Federal officials said the statement was false and misleading because when Enco submitted its bid for the contract, it intended to fulfill the contract by purchasing mats from a non-approved manufacturer.