Last spring, the Pentagon spent more than $165,000 on a set of sophisticated radio antennas for a contingent of elite Navy SEALs. Unfortunately, they were cheap knockoffs, courtesy of a California vendor apparently looking to secure some extra profit.
A search warrant application recently filed by the Defense Department provides a glimpse into how the alleged scam worked.
In April 2019, the Naval Special Warfare Command solicited bids to buy 450 VHF/UHF antennas for use by members of the Navy SEALs. The request required the body-worn antennas come from New York-based manufacturer Mastodon Design, and that the supplier qualify as a small business.
The government used to purchase the antennas directly from Mastodon. However, it no longer could because after Mastodon’s sale to a large multinational defense contractor, the once-boutique company no longer qualified as a small business. This meant the Navy would have to buy Mastodon’s antennas through an authorized small distributor or reseller.
On May 1, the sales team at Mastodon got an email from the procurement department of a California company called Vizocom. It said the company was bidding on a Navy contract and wanted to know how much 450 Mastodon antennas would cost. Mastodon quoted a price: $165,109.50.
Vizocom then submitted its bid to the Navy for the exact same amount. A source with direct knowledge of the situation told Quartz it was highly unusual that Vizocom wouldn’t want to make any money on the deal. At this price, the Navy awarded Vizocom the contract.
The company, however, would never actually place the order with Mastodon. Instead, it would import low-cost antennas from China and pass them off as from Mastodon using fake serial numbers and spec sheets, according to the search warrant application and sources with knowledge of the deal.
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