IG launches DARPA conflict-of-interest audits

The Defense Department’s cutting-edge technology agency will undergo a number of special audits from DOD's inspector general to determine whether there are any contracting conflict-of-interest concerns with its director and a contracting company.

The Project on Government Oversight raised concerns in May with the IG about Regina Dugan, director of Defense Advanced Research Projects Agency (DARPA), and a contractor RedXDefense. According to POGO, Dugan founded the defense company and her father currently runs the business. POGO received a letter from the IG on Aug. 12 in response to its information.

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POGO has raised questions about the nearly $2 million in contracts that had been awarded to RedXDefense since Dugan became director in July 2009. The group’s letter also cited Dugan’s disclosure that RedXDefense owed her $250,000 in an outstanding loan.

RedXDefense had no comment about the situation.

In a separate memo from July 26, the IG wrote that auditors will also check other funding from DARPA, including programs in the Army, Navy and Air Force.

So far, the IG’s auditing arm has already started its initial audit of DARPA’s selection and administration of contracts awarded during fiscal 2010 and 2011, according to the letter sent to POGO.

In a statement released Aug. 16, Danielle Brian, POGO’s executive director, said DARPA’s dealings with RedXDefense need special attention.

“Conflicts of interest — even if they’re only perceived conflicts — undermine the public’s trust in government,” she said.

One expert said whatever the IG may find, this certainly will pull attention away from DARPA’s work.

“Something like this is certainly a distraction," said Larry Allen, president of Allen Federal Business Partners. "However much remains to be seen."

Allen expressed surprise that no one at DOD caught this potential conflict of interest, despite DARPA’s reputation and all its cutting-edge projects.

“The internal vetting for its director should have caught the issues behind the current allegations,” he said. “Full disclosures by senior people are imperative, and most senior people in government understand that.”