LASD INVESTIGATIONS: AERO BUREAU – PART 1: THE CONTRACT. Did the Sheriff’s Department Over Pay Drastically for Work and Equipment on Its New Fleet of Helicopters?March 27th, 2012 by Celeste Fremon
EDITOR’S NOTE: A few weeks ago, WitnessLA acquired an LASD internal report that we have since been investigating. The report pertains alleged wrongdoing at the LA Sheriff’s Department’s Aero Bureau. Aero Bureau, as the name implies, is an elite LASD division that oversees the department’s aircraft—–mostly helicopters.
The report, by LASD Sergeant Richard Gurr, formerly of Aero Bureau, alleges that a $29 million Board of Supervisors-approved contract to do completion work on the LASD’s 12 new helicopters, may be loaded with overcharges and unnecessary equipment to the tune of up to $11 million. In addition, it alleges that some Aero Bureau supervisors, several of whom are reportedly close to Undersheriff Paul Tanaka, colluded to rig the bidding process.
The story below is a part of our ongoing LASD INVESTIGATIONS, a continuing prove into dysfunction and corruption in the Los Angeles Sheriff’s Department. Part 2 of the Aero Bureau story, soon to follow.
A DOZEN NEW HELICOPTERS….AND A BUNCH OF RED FLAGS
On May 11, 2010, The LA County Board of Supervisors was asked to approve the purchase of 12 new helicopters to replace the existing but aging fleet of 12, plus two extra helicopters, to be purchased, pending the sale of a certain number of the old fleet.
Law enforcement is hard on aircraft thus the replacement cycle reportedly occurs about every 7 years. The old fleet went into service in 2003. So it was time.
According to the document given to the Supervisors for approval, (and obtained by WitnessLA), the new fleet was to be delivered over a period of around 8 months, meaning that one helicopter would be completed about every 3 to 6 weeks.
The base price of each “green” helicopter—meaning the no-frills aircraft that comes straight from the American Eurostar factory in Texas without the additional finish work and equipment that law enforcement requires—was to be $1,969,161 per aircraft.
The cost of doing the completion work that the department required was listed at $2,085,250 per helicopter. An avionics company located in Carlsbad, California, won the competitive bidding process for the $29 million aftermarket outfitting job. It was comparatively new firm named HangarOne Avionics that reportedly got its FAA certificate in December of 2007.
It is this second part of the purchase process, the $2 million plus per helicopter covered by the HangerOne contract, that is analyzed in a highly critical internal report that WitnessLA has obtained. The report echoed, albeit with a far more detailed analysis, some very similar allegations made by a former Aero Bureau supervisor, Lt. Ed Cook, in a whistle blower lawsuit.
The internal report, which features around 30 pages of collateral material, lists “four areas of concern” that it contends support “initiating an investigation for violations of Department Policy” and “County Purchasing Code.”
(The report also alleges that Aero Bureau supervisors helped manipulate the bidding process for HangerOne. However this allegation is a story all its own that we will get to later.)
The four reported “areas of concern” are as follows:
1. Excessive labor costs,
2. The purchase of extra equipment outside the scope of what was approved by the Board of Supervisors, and often with hefty mark-ups attached
3. Standard equipment purchased in excess of what was required.
4. Charges for installation of basic equipment that conventionally should have been installed at the factory as part of the price of the aircraft.
EXCESSIVE LABOR COSTS
The first area of concern alleged has to do with the $350,000 fixed labor costs for the completion of each aircraft.
In a previous service contract between HangarOne and the LASD, the report notes that HangerOne set its labor price at $90 per shop hour—reportedly the high side of the industry standard, but still well within the bounds of usual prices. Thus, noted the report, if that same hourly rate was used for the aircraft completion, then that would mean the department was being charged for 3,888 shop hours—which, using an 8-hour work day and a five day work week, would equate to 24 months worth of shop hours per aircraft.
Since the purchase approval document approved by the LA County Board of Supervisors, called for the helicopters to be delivered to the Aero Bureau from HangerOne at a rate of at least one aircraft per month, this meant the department was allegedly over-paying for labor by hundreds of thousands per heliocopter. (In speaking to sources inside Aero Bureau, we learned that the helicopters were delivered at a rate of one aircraft every two months, which is reportedly a normal speed. )
“Even at three months, (480 shop hours),” states the report, “the labor cost would only amount to $43,200 per aircraft.” This would mean more than $300,000 in excess charges per helicopter—X 12.
(WitnessLA is still investigating the labor overcharging issue, as it is a complicated matter and there are some other potential variables that we are told could come into play. We’ll have more shortly.)
THE PURCHASE OF EXTRA EQUIPMENT NOT DIRECTLY RELATED TO THE BOARD OF SUPERVISORS-APPROVED HELICOPTER ACQUISITION
Certain equipment is considered to be a part of the proper outfitting of an aircraft for law enforcement work (just as, when the department buys a fleet of patrol cars, there is a range of equipment—lights, siren, radio, floodlights, et al— that is considered standard. ).
However, according to the report, there was $1,716,156 worth of extra items purchased that were not installed in the helicopters but were shipped directly to Aero Bureau, reportedly at LASD Aero Bureau’s request.
An example of one such item is a FLIR Star Safire HD priced at $749,816.
The FLIR is a high definition thermal imaging system that, according to the company’s list of clients, is primarily used by the military, some border patrol agencies, and maritime search and rescue.
We are told the Star Safire is a swell gadget, as you can see from the video below, but according to those familiar with Aero Bureau equipment, it is a long way from necessary—especially at a time when the Sheriff was regularly in front of the Board of Supervisors asking for additional funds for overtime and other real necessities. Moreover, its price places it well above the monetary threshold that, if it was not bundled questionably into the price of the completion, would have required board approval.
To go with the FLIR Star Safire, is a companion item, the FLIR Ultra 9500, an infrared camera that cost the LASD $356,775. The two items together total $1,106,591.
According to the report, there were 15 more extra items that allegedly should not have been part of the helicopter completion price.
In addition, the report states that many of these extras were purchased at a ferocious mark-up. For instance, in the report’s supplementary material it shows the GSA price ( U.S. General Services Administration) on the FLIR Ultra 9500 to be $185,996 instead of the $356,775 paid by the LASD.
“STANDARD EQUIPMENT” REPORTEDLY NOT NEEDED OR PURCHASED IN EXCESS
Another allegation the report makes is that, even with the standard equipment delivered with the aircraft, much of it was bought in inexplicable excess, or simply wasn’t needed in the first place.
For instance, the contract calls for the purchase of 42 pairs of night vision goggles at $491,473.
“Aero Bureau has 10-12 NVG goggles which are sufficient to support any LASD mission,” the report states. ” …Very few additions would be required.”
The report notes similarly high numbers of items such as binoculars, helmets and a list of other types of equipment that it contends the department already has.
Additionally, the report notes some odd items like 14 personal locator beacons, of the type used by backpackers and mountain climbers. When I asked one experienced Aero Bureau source when such a device might be used in the course of department work, he said the only possible application would be if the aircraft crashed in a remote area and the crew had to hike out over a long distance. (There’s already a locator on the helicopter that activates in the event of a crash, so to use these 14 items one would have to leave the aircraft.) I asked if, to his knowledge, a pilot and observer had faced such a situation.
“To my knowledge? Never,” he said.
EQUIPMENT THAT ALLEGEDLY SHOULD HAVE COME WITH THE AIRCRAFT FROM THE FACTORY
The helicopters, while stripped down when they leave the Eurocopter factory, still must be “flight ready,” we were told. “After all, they had to be flown from the factory in Texas to us,” explained one of the bureau’s pilots.
However, according to the report we obtained, some of the items that would normally have been installed at the factory, were instead part of the HangarOne charges, which the report deemed an “area of concern.”
The report lists $3,619,813 in “factory associated” equipment that instead turned up as HangarOne charges.
For instance, the report lists “windshields,” for $59,232,
“Obviously the aircraft can’t be flown back from the factory without a windshield,” said another Aero Bureau source whom we asked about the charge. We also asked if law enforcement aircraft require special windshields.
“No,” he said. “The windshield that comes on the aircraft from the factory is what’s on it now.”
As we reported previously, the allegations contained in the report have been passed on to the D.A’s office for consideration although they were audited by the County Auditor Controller as well as investigated by the department’s own criminal investigative unit, ICIB. Both those probes found the allegations to be “without merit.”
Several sources inside Aero Bureau or those familiar with its workings have concurred with all or parts of this internal LASD report.
Given the radical disagreement that has surfaced thus far about the HangerOne contract and the allegations surrounding it, and given the amount of money at stake, WitnessLA hopes that the Supervisors will consider calling for a full forensic audit by an entity entirely independent of the county or any of its agencies.
Next up: AERO BUREAU – PART 2