A unit of L-3 Communications remains barred from gaining new federal contracts or task orders three weeks after the Air Force's June 3 federalwide suspension of the company's special support programs division.

The company also faces a criminal investigation over allegations that it automatically copied and surveilled email attachments exchanged on the Defense Department's Special Operations Command network in order to surreptitiously garner information. According to a June 3 memo from the Air Force deputy general counsel's office, L-3 has admitted to conducting the surveillance to further its private commercial interests.

Namely, the L-3 unit used that information to prepare a bid in a competition for contract work and for a bid protest in which the L-3 unit was a party, the memo states.

The last major information technology company to face federal suspension was IBM, which was suspended by the Environmental Protection Agency in 2008 over allegations that the company obtained source selection information concerning a competitor.

However, IBM and EPA managed to come to an agreement within a week to lift the suspension.

Given the length of L-3's suspension so far, some suspect the Air Force has evidence of behavior that is not the isolated work of a few individuals.

"We're not going to know much until they get through, at least, the initial review," said Bob Woods, president of Vienna, Va.-based Topside Consulting Group.

But, he added that "usually the Air Force is very process oriented, so I would think if they've filed something, they think they've got a case."

The impact of the suspension is already being felt. On June 21, Lockheed Martin gained a $5 billion contract through 2018 to support the Special Operations Forces Support Activity in the place of the suspended L-3 unit.

Lockheed Martin had won a services contract for the support activity in March 2009, but a protest by L-3 led to Lockheed Martin being bumped from the contract pending the protest's outcome. The Lockheed Martin contract is being "reinstated to meet urgent operational requirements," according to a DoD statement.

The L-3 unit suspension came to public light when the company filed notice of it June 9 with the Securities and Exchange Commission. The filing stated that the entire company was at risk of being barred from contracts with federal agencies, something that has not occurred to date.

Jennifer Barton, a spokeswoman for L-3 Communications, would only say that "L-3 continues to cooperate fully with the government. Only L-3's Special Support Programs Division has been temporarily suspended."

The alleged email misconduct apparently came to light during routine audit conducted by the U.S. Special Operations Command. Special Operations Command spokesman Air Force Major Wes Ticer said there was no whistleblower to tip off auditors.  

For more:
- read the Air Force suspension memo of the L-3 unit
- go to the L-3 SEC filing

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