AP News

Defense contractor pays $1.15M over bid allegation


DENVER (AP) — A Colorado defense contractor has agreed to pay $1.15 million to settle allegations that it improperly got information about a competitor's bid for two contracts from the top-secret National Reconnaissance Office, federal prosecutors said Tuesday.

Paragon Dynamics Inc., of the Denver suburb of Aurora, was accused of getting copies of bid information from Raytheon Corp., another defense contractor.

Prosecutors claimed a Paragon employee who had access to a Raytheon facility in Aurora stole drafts of Raytheon's proposals and faxed them to the president of Paragon. The president then sent the information to another corporation that was combining with Paragon to bid on a contract, prosecutors said.

The written settlement agreement did not identify the employee, the president of Paragon or the other corporation. Kevin Carnino is the corporation's current president and CEO, but it wasn't clear if he was in the position in July 2009, when the settlement agreement said the Paragon employee allegedly copied Raytheon's information.

Paragon Dynamics did not admit any wrongdoing as part of the agreement, said Gerald Haines, executive vice president of Mercury Computer Systems Inc., Paragon's parent company.

Haines said Paragon cooperated with investigators.

It wasn't clear how much the contracts were worth, what work was involved and who received them. Jeff Dorschner, a spokesman for the U.S. attorney's office in Denver, said he couldn't discuss details.

The National Reconnaissance Office, part of the Defense Department, operates spy satellites. One of its ground stations is at Buckley Air Force Base in Aurora. It wasn't clear if either contract involved the NRO's operation at Buckley.

The settlement agreement refers to one of the contracts as "Antietam" and the other as "Savannah."

Paragon's website says the corporation provides software and engineering to the Department of Defense and other aerospace "clients."


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