According to a story in the Arizona Republic, in 2009, Barrier Wear, subcontractor to ADS Inc for military issue cold weather clothing systems like ECWCS Gen III, manufactured cold weather trousers in a factory in Mexico, yet passed them off as Berry Compliant, in violation of federal law. Their actions were unknown by ADS. In fact, Barrier Wear created a ruse to fool ADS inspectors when they visited the US facility by adding machinery and workers. Barrier Wear also falsified reports to ADS and the Army.
The violations were first noted in 2009 when inspectors at the Mariposa Port of Entry in Nogales noticed the country-of-origin labels on the trousers were not permanently affixed. Instead, the ‘Assembled in Mexico of U.S. components’ labels could easily be removed, which was accomplished at night in Barrier Wear’s factory in Nogales, Arizona. Investigation eventually revealed that about 320,000 trousers supplied by Barrier Wear were made in Mexico. All told, the company made $48,000,000 in the deal.
In December, 2016, Barrier Wear owners Paul Grillo and Raymond Lawson pleaded guilty to one felony count of obstructing a federal auditor. Although the maximum penalty for this violation is a $250,000 fine, five years in prison and three years of supervised release, in their plea deal, Grillo and Lawson agreed to pay a $2.1 million fine and serve probation. Sentencing is scheduled for March 7.
UPDATE : Barrier Wear is currently not debarred from doing business with the government but does appear in the database when you do a query for their company name. They have no active exclusions.
Tags: Barrier Wear
Paid a $2.1 million dollar fine, and probation. Not bad for $48 million made.
Relevant – https://www.schneier.com/books/liars_and_outliers/
By “made” is that revenue or profit? You really only “make” profit. Everything else goes to costs and taxes – assuming those were paid. Maybe a big assumption in this case.
Total
One wonders how their quote stacked up to competitors. ADS claims ignorance but I wonder if they really low-balled the bid compared to others. The government’s not to smart about that sometimes.
The trousers were part of a system consisting of multiple components with multiple suppliers. ADS was the integrator.
Between this, the NSW allegations, and the continued affiliation with Guy Cramer… Not so sure how to feel about ADS.
What NSW allegations?
It sounds like that Barrier Wear really went through a lot of trouble to try to fool ADS into believing that their stuff was really made in the US. I wonder if they originally intended to make the stuff in the US but upon examination they realized, belatedly, that it would cost more than they originally thought, or did they plan to manufacture in Mexico from the get go and that was how they managed to win the contract with ADS in the first place since they knew their labor costs were going to be fairly low?
So where did the profit go?
The workers?