Navy suspends defense contractor with Murtha ties

JOHNSTOWN, Pa. - A Pennsylvania defense contractor who got millions of dollars in congressional earmarks from Rep. John Murtha has been blocked from doing business with the Navy amid allegations of fraud.

Word of the suspension came during an annual defense contractor trade show in Johnstown, Pa., the heart of Murtha's congressional district. Seven of the world's largest defense contractors, who have been among the veteran Pennsylvania Democrat's biggest campaign contributors over the years, are helping to bankroll this week's "Showcase for Commerce."

During a brief news conference today at the trade show, Murtha turned aside questions about the suspension of Kuchera Defense Systems Inc., a family-run business that has supported him with $60,000 to his campaign and to his political action committee since 2002.

Over the last two years, Murtha has secured $14.7 million in congressionally directed funds known as "earmarks" for Kuchera to perform work for the military.

Asked about Kuchera's troubles, Murtha said, "What's that got to do with me? What do you think, I'm supposed to oversee these companies? That's not my job. That's the Defense Department's job."

Murtha is chairman of one of the most powerful panels in Congress, the House Appropriations Subcommittee on Defense, of which he has been a member for more than two decades.

Kuchera is one of two firms with longtime ties to Murtha that were raided by the FBI in recent months in a criminal investigation of campaign fund-raising involving defense contractors.

In remarks to defense contractors before the news conference, Murtha spoke out in favor of congressional earmarks, saying that they go for purposes such as road and sewer improvements and improving water quality in the Western Pennsylvania region. Murtha said the annual trade show helps promote economic development. In the last two years alone, Murtha has directed $78 million in earmarks to clients of a Washington-area lobbying firm, PMA, the other business raided by the FBI in recent months in an ongoing Justice Department probe.

At the Pentagon, Navy spokesman Lt. Clay Doss said the Navy suspended Kuchera Defense Systems on April 23 for "alleged fraud, including multiple incidents of incorrect charges, defective pricing and ethical violations." Doss declined to elaborate.

On Thursday night, Dennis McGlynn, a lawyer representing Kuchera, said that the company was appealing the Navy suspension and that "we hope to have it lifted after we have an opportunity to present our reply."

In the wake of the suspension, the government placed the company and its two owners, Ron and Bill Kuchera, on the General Services Administration's Excluded Parties List System, a step that can be a virtual death sentence for a federal contractor in terms of continuing to do business with the government.

In 2007, Murtha announced that Kuchera Defense Systems had been awarded a $100 million, 10-year contract by Raytheon Missile Systems to build circuit boards for the U.S. Air Force.

On Thursday, Anne Marie Squeo, a spokeswoman for Raytheon, said the company is complying with federal acquisition regulations, which allow a suspended firm to complete work on an existing project but bar it from being awarded new government work or any expansions of existing projects.

The Navy has awarded Kuchera Defense Systems more than $30 million in contracts since 2003, according to databases compiling government contract data. The Army has awarded nearly $15 million in contracts to Kuchera since 1995, and the Air Force nearly $5 million since 2005. The Air Force contracts are in addition to the subcontracting work Kuchera is doing for Raytheon.