11828 Pika Drive, Waldorf, Maryland 20602 USA
Phone (301) 893-3910 Fax: (301) 893-8354
Internet: www.militec-1.com

August 9, 2006

VIA E-MAIL and OVRNIGHT DELIVERY

Mr. Thomas F. Gimble
Acting Inspector General
Department of Defense
400 Army Navy Drive
Room 1000
Arlington, VA 22202

Re: Inspector General Complaint
Troop Weapons and Equipment Are Malfunctioning and Jamming Due to Army Mandated Use of Inadequate and Inappropriate Lubricant Specifications and Products; Improper Administration of Weapons and Equipment Lubricant Program, Testing and NSNs; Militec Victim of Retaliation and Other Actions To Prevent Troop Access and Use of MILITEC-1 Weapons Lubricant.

Dear Mr. Gimble:

Militec Inc. ("Militec") requests that the Department of Defense Office of Inspector General ("IG") conduct an independent and objective investigation into the following matters that Militec believes are part of an orchestrated plan to harm Militec in retaliation for its actions to identify problems with weapons jamming and equipment malfunctioning in the war theater due to improper Army-sponsored weapons and equipment lubricant specifications, products and testing. Despite the Army’s purchase or more than $3 million worth of MILITEC-1 for “war use” during Operation Iraqui Freedom, troops now are losing their lives in the war theater because the Army is forcing them to use Cleaner Lubricant Preservative ("CLP") and General Purpose Lubricant ("GPL") specifications and products qualified under those specifications that do not work. Further, the Army and DSCR are preventing troops from obtaining lubricants that do work in the war theater by mismanagement of the National Stock Number ("NSN") system, improper alternate source qualification, changing NSN uses and blocking the procurement and use of MILITEC-11 without affording Militec due process, and intentionally publicizing false and disparaging information relating to MILITEC-1.2 The Army and DSCR have retaliated against Militec for trying to surface the foregoing concerns. This retaliation has resulted in de facto debarment and suspension of Militec without due process. The actions by DSCR and the Army also interfere in the proper administration of the DOD procurement system by preventing agencies, personnel and troops who require and request MILITEC-1 from obtaining that product through DSCR procurements and the NSN system. The actions Militec urges the IG to investigate immediately involve the following categories of misconduct that Militec believes amount to program-wide fraud, waste and abuse:

1) Significant Mismanagement of Specification Development,
Product Testing and Procurement of Weapon and Equipment Lubricants.

There has been significant mismanagement by the DSCR and the Army (including RDECOM, ARDEC and TARDEC and others) with regard to specification development and product testing of lubricants to be used on small arms and crew served weapons and equipment. Army entities have taken actions to develop and maintain Cleaner Lubricant Preservative ("CLP") and General Purpose Lubricant ("GPL") specifications3 and NSNs for products that do not work in adverse environments, including desert environments, and that do not work as well as MILITEC-1. This mismanagement directly and indirectly harms the troops because in actual wartime situations the CLP and GPL products acquired under these specifications provide a wet lubrication that traps dust and sand in the moving parts, causing weapons and equipment to jam and malfunction in critical military situations. Attachments 13 and 14. See, also, Attachment 12 (Report on Blind Test of MILITEC-1 versus CLP, showing CLP problems and MILITEC-1 superiority). By restricting authorized weapon and equipment lubricants to these CLP and GPL specifications, DSCR and the Army actions have the additional negative effect of preventing the troops from using MILITEC-1, a synthetic dry lubricant, which does work on weapons and equipment and is better than the CLP and GPL wet lubricants, in adverse conditions, particularly in wartime and desert environments. Thus, in addition to harming the troops, these actions also harm Militec. Support for these allegations includes:

a) On information and belief, a very large number of instances of jammed weapons and equipment in the desert theater has arisen where Army-sponsored CLP is used. Attachment 13 ("Lubricant soliders provided consistent comments that CLP was not good choice for weapons maintenance in this environment. The sand is as fine as talcum powder. The CLP attracted the sand to the weapon. Soldiers considered a product called Militec [sic] to be a much better solution for lubricating individual and crew served weapons."); Attachments 14a-i (emails from troops in Middle East and/or returning from the Middle East, identifying problems with CLP products and superiority of MILITEC-1, e.g., "CLP … is just not hacking it," Attachment 14c). The Army, through RDECOM, ARDEC, TARDEC and possibly others, has taken and is taking actions to develop new CLP specifications and identify new CLP products as lubricants for small arms and crew served weapons and equipment for use in desert environments. It is using a CLP specification and approving CLP products that, based on emails Militec has received from numerous personnel who were or are currently in the war theater, do not work and/or do not work as well as MILITEC-1. Attachments 12, 14a-i, 21, 29 ("all soliders who utilized this product would recommend that MILITEC-1 be utilized instead of CLP for this weather environment"). These specifications are defective and have the effect of excluding products that do work, such as MILITEC-1. Indeed, MILITEC-1 is the lubricant of choice by federal, state and local law enforcement and military personnel, including, for example, the U.S. Coast Guard, U.S. Secret Service, Federal Bureau of Investigation, Drug Enforcement Agency, Immigration Customs Enforcement, Defense Criminal Investigative Service, Naval Criminal Investigative Service, Maryland and Pennsylvania State Police, as well as weapon manufacturers such as Beretta, Barrett, Glock, because it does work. MILITEC-1's proprietary, trade secret and dry synthetic lubricating and metal conditioning properties leave the MILITEC-1-lubricated weapons and equipment dry to the touch, but lubricated and conditioned for repeated operation in adverse environments, and, in so doing, prevent weapons and equipment from jamming. See, e.g., Attachments 15, 16, and 18 . For example:

The Coast Guard authorized the use of MILITEC [sic] gun lubricant
as an alternative to MIL-L-63460 [CLP Specification], found on most
preventive maintenance correspondence. …The selection of these two
products [one of them is MILITEC] was the result of a comprehensive test
of various lubricants and cleaners performed by our organic weapons
specialists. The MILITEC [sic] … products were found to provide
better cleaning, lubrication, and less foreign material adhesion than
MIL-L-63460
[CLP Specification products].

Attachment, 15, Letter from T. Allen, Commandant, US Coast Guard, to Honorable Walter Jones, U.S. House of Representatives, dated July 13, 2006. (Emphasis added).

b) The NSN program has not been properly administered with regard to the MILITEC-1 NSNs. As noted above and in the enclosed materials4, despite direction that MILITEC-1 be authorized for use as a metal conditioning lubricant for weapons and machine shop applications by high ranking DOD personnel,5 DSCR changed the authorized uses of certain MILITEC-1 NSNs to eliminate use of MILITEC-1 as a weapons lubricant. See, e.g., Attachments 8 and 19. Further, unqualified products were added as alternative sources to MILITEC-1 under these 11 year old sole-sourced MILITEC-1 NSNs. Attachment 8. The DSCR and Army approved these unqualified products despite incomplete and inadequate documentation and contrary to DSCR alternate source rules.6 Further, DSCR held procurements that lacked adequate qualification and evaluation criteria to establish the agency's true needs and the appropriate basis upon which to differentiate among the different offerors' products for selection of the proposal constituting the best value. See, e.g., Attachment 8. DSCR and the Army bought and distributed products that did not comply with the MILITEC-1 NSNs. Id. In addition, DSCR, since the protests made by Militec challenging these deficiencies, has stayed and now is blocking procurements of MILITEC-1 under MILITEC-1 NSNs. Id.

c) The DSCR and Army have taken actions based on improper testing of MILITEC-1. As noted in the documents in Attachment 8 (Enclosure 1, Letter from Finegan to Giordani, Militec, dated May 2006) and Attachment 20, the Army, through RDECOM, ARDEC, TARDEC and possibly others, has purportedly tested MILITEC-1 against GPL specifications that are not part of and have never before been applied to the MILITEC-1 NSNs.7 On the basis of this improper testing, the Army directed DSCR to remove the Army as a listed user of the MILITEC-1 NSNs and the MILITEC-1 product, and required DSCR to notify other listed users that it has taken this action because it determined MILITEC-1 not to meet the GPL specification MIL-PRF-32033. Attachment 8, Enclosure 1. The DSCR has used the results of this improper testing and direction to contact other listed users to advise them of these points. These actions prevent the troops from getting the dry lubricant they need for successful operation of weapons and equipment in the adverse war theater environments in which they must continuously operate. Further, these actions interfere with Militec's right to sell its product and affect its rights as a holder of the NSNs without affording Militec any due process to challenge the improprieties of the Army testing and the DSCR actions regarding MILITEC-1 NSNs8.

2) Contract and Procurement Irregularities.

a) The Defense Supply Center Richmond ("DSCR") and the Army, including the Army's Research Development and Engineering Command ("RDECOM") and its supporting research, development and testing facilities ARDEC, TARDEC and possibly others, are improperly administering, and interfering with the administration of, the NSN program with regard to the MILITEC-1 products, NSNs 9150-01-378-3058, 9150-01-378-3118, 9150-01-415-9112, 9150-01-415-9111, 9150-01-415-9114 (also referred to as "MILITEC-1 NSNs"). The result of these actions is to prevent troops from getting the dry lubricants they need for small arms and equipment and to improperly abrogate Militec's rights. For example, the DSCR and the Army changed the description and labeling of the uses of the MILITEC-1 product for some NSNs (the 1 ounce, 4 ounce and 16 ounce) from a "Corrosion Inhibitor" that acts as a dry lubricant and metal conditioner for weapons and machine shop applications to a "General Purpose Lubricant" that is "not approved for weapons and machine shop applications and small weapons use," without affording Militec any due process9 Attachments 8, 19, 2810. There is no question but that these actions affect Militec interests and were taken without affording Militec any appropriate review or remedies under established federal procurement laws, rules, regulations, or any due process under the Administrative Procedures Act, 5 U.S.C. § 555(b) before their rights were abrogated. See, e.g., Advanced Sys. Tech., Inc. v. U.S., 69 Fed. Cl. 474 (COFC 2006). Further, by changing the labeling, this discourages (and may even be viewed as prohibiting) agencies and troops from ordering and/or using MILITEC-1 for weapons use. In fact, this is absurd because DSCR FOIA'ed documents show that the Army and DSCR knew and approved the use of MILITEC-1 for weapons use.11 See, e.g., Attachment 20.1 at pp. 1-2 (Acquisition Plan for Sole Source IDIQ contract for MILITEC-1, reviewed and approved February 7 and 8, 2005 ("The Army uses these NSNs to lubricate their small arms. These NSNs have been proven to work well in the desert environment and allows the Army's mission to be fulfilled overseas. … Capabilities and Performance … All 5 NSNs are used to support various applications and are not assigned to any particular weapon system but are used by the Army as a lubricant for their small arms. Currently, Militec has met the test requirements conducted by the Army for a suitable small arms lubricant."). See, also, Attachment 20.5 (Contract Clearance and Oversight Review for sole source contract to Militec, dated February 10, 2005).

b) The DSCR and Army are engaging in improper procurement activities involving the NSNs established for MILITEC-1. For example:

1) DSCR cancelled a planned and approved sole source IDIQ contract for MILITEC-1 at the direction of the Army. This was wrong. There was an established need for MILITEC-1. The DSCR had surveyed the situation and determined that Militec was the only source of MILITEC-1.12 All approvals for the acquisition had occurred and the process for issuing the contract was well underway. Attachment 20.2. The DSCR stopped this process apparently because ARDEC determined that an alternate product was an alternate qualifying product and the Army's ESA, ARDEC, raised issues with MILITEC-1, despite proven performance in the war theater and high demand for the product. Attachment 20.4. As stated in footnote 4, supra, that alternate product qualification was defective. Indeed, the alternate product is not the same as MILITEC-1; MILITEC-1 is a synthetic dry lubricant and it is not. See, e.g., Attachment 8.

2) After canceling the sole source IDIQ procurement, DSCR then included a non-qualifying product as an alternate source to MILITEC-1, under a competitive MILITEC-1 NSN procurement . Again this was wrong because alternate products are not the same as MILITEC-1 and lacked, e.g., the salient dry lubricating, metal conditioning, flash point and other critical properties that constituted MILITEC-1. Footnote 4, supra; Attachments 8 and 20.2.

3) DSCR sought to competitively procure under solicitations for MILITEC-1 NSNs, listing the improperly qualified alternate product as a qualified alternate source. The DSCR did not include proper qualification and evaluation criteria to ensure that the actual attributes and characteristics of the product needed were identified so that these multiple offerors could be properly evaluated against those actual specifications. When Militec protested those procurements, the DSCR rejected Militec's protests and/or cancelled the procurements. It advised Militec that it would indefinitely stay all procurements under the MILITEC-1 NSNs while it met with the Army to evaluate the MILITEC-1 NSN situation. These evaluations were conducted behind closed doors, without affording Militec any opportunity for input regarding its status under the NSNs. These actions deprived Militec of any due process or APA review of actions impacting its rights under the NSNs. Further, the DSCR stays imposed on acquisitions under these NSNs resulted in effectively debarring and/or suspending Militec from selling MILITEC-1 to the Army and other agencies in reprisal for Militec's actions to properly blow the whistle on these improper procurements. Attachment 8.

c) DSCR and the Army, including RDECOM, ARDEC, TARDEC and possibly others, improperly qualified and added an alternate product under the MILITEC-1 NSNs, then improperly procured the alternate product under MILITEC-1 NSN procurements. As noted in footnote 4, supra, the materials in Attachment 20.1 demonstrate that the documentation the mnufacturer provided for qualification of the alternate product did not meet the MILITEC-1 NSN requirements. Contrary to DSCR requirements for qualifying alternate sources and requirements for dated safety data information, the manufacturer provided inadequate, undated safety information and conflicting information regarding the alternate product's technical qualifications. These defective submissions therefore could not and did not establish the alternate product's conformity with the salient technical characteristics of MILITEC-1, the product covered by the NSNs. Notwithstanding this, RDECOM, ARDEC, TARDEC, DSCR did not question these omissions and nonconformities in the submitted package, but instead apparently rushed through the process to approve the alternate product as an alternate source for the MILITEC-1 NSNs. They used this new "alternate source" as a basis for canceling the already approved MILITEC-1 sole source IDIQ. The DSCR then improperly procured the non-qualifying alternate product under MILITEC-1 NSNs. The DSCR and the Army have been improperly delivering and shipping that alternate product in response to agency and personnel requisitions for the proprietary and combat-proven product MILITEC-1 for weapons.13 Thus, agency and U.S. personnel, including U.S. troops, are ordering MILITEC-1 for their weapons and receiving a product they did not order -- a product that DSCR and the Army have never approved for weapons use, but have only approved and procured for general purpose lubrication; and a product that as delivered does not contain a "not for weapons use" restriction on the bottle delivered to and used by the U.S. troops. Attachments 8 (see, e.g., Enclosure 2c) and 20 (20 through 20.5).

d) The Army requested that Militec provide large samples of its MILITEC-1 product for testing and on information and belief now may be trying to reverse engineer the MILITEC-1 proprietary commercial product, in lieu of buying it from Militec. Attachment 8, Attachment 23, and Attachment 24 (emails between TARDEC and Militec re TARDEC requests for two gallons of MILITEC-1 for product testing).

3) Abuse of Authority By DSCR and the Army, Including RDECOM, TARDEC, ARDEC and Possibly Others.

As noted above, the foregoing actions also constitute abuse of authority by DSCR, the Army, RDECOM, TARDEC and ARDEC, and others, in

a) the conduct of MILITEC-1 NSN procurements and Militec's protests of these procurements,

b) the administration of MILITEC-1 NSNs,

c) testing of MILITEC-1 and other products,

d) development of a desert lubricant specification,

e) continued actions to require agencies and personnel to use CLP products to lubricate small weapons and equipment in the desert environment when CLP does not work and/or is less effective than MILITEC-1,

f) procurement and distribution of non-comparable products such as GPL and/or CLP products in lieu of the requisition-requested MILITEC-1 products. In addition, the Army and DSCR have abused their authority by,

g) establishing and conducting a campaign to intentionally disparage MILITEC-1. This campaign was apparently established and is being conducted to prevent agencies and troops from buying and using MILITEC-1, and to force them to only use CLP:

Gus,

From looking at my notes from today's meeting, this is how I interpret what the
Implementation Strategy will be…

3. TACOM issue a MAM stating
- new NSN for desert lubricant
- reminder that CLP is only authorized lubricant for small arms …

Now , addressing the other issue of non-approved lubricants with NSNs and
how to handle it.
(if pursued) Here are the options that should be presented to
the chain of command.
1. Cancellation of NSN = not prudent, because product may be used in other
capacities…not just small arms.
2. Blocking NSN = preferred option
- TACOM must inform DLA to place the block (TACOM is authorized
ESA for Army in this case)
- places a block on only those NSNs that are strictly marketing for use as
small arms lubricant
-blocking is only internal to DLA; requisitioner will not know NSN has
been blocked.
- when product is requisitioned, message from DLA is returned to
requisitioner stating NSN not approved for small arms -- Reorder
using Type I or Type II [CLP] NSN
-

3. Do nothing and NSNs remain
- rely on publicity campaign with MAM, journals, PS Magazine, etc
promoting Type II [CLP] NSN for use in desert.

-----------------------

Last but not least, address the Long Term Contract for non-approved NSN14
- DLA initiated solicitation request based off demand for the product
- DLA will restructure contract solicitation to IDIQ format based off
today's meeting and will not award contract
(this will take a little more
time)
- DLA has the option to cancel solicitation based off implication that new
NSN [CLP Type 2] will cause demand for the product [MILITEC-1] to
decline

Attachment 20.3. at pp. 24-27 ("Weapons Lubricant DLA Meeting Wrap-Up -- 11 May 05", emails from Marit Bank, DSCR Counsel, to Daniel Holt, DSCR, Judy Archer, DSCR, at p. 3 of 4 (email from Shelly Sanders, Military Technical Assistant to the Director, Army Research Laboratories, to Augustine Funcasta, dated May 11, 2005 4:45 pm, re: Weapons Lubricant DLA Meeting Wrap-Up -- 11 May 05)) (Emphasis added). See, also, Attachment 20.4 (Fact Sheet).

DSCR and Army have acted consistent with this apparent strategy: DSCR has blocked sales, cancelled solicitations, and included unqualified alternate sources, to avoid sole source contracts to acquire and distribute MILITEC-1. It has contacted users of the MILITEC-1 NSNs to discourage their use of the product and to encourage their use of CLP products. And, the Army has begun a publicity campaign, issuing statements, writing letters to magazines, holding press conferences, etc., to falsely denigrate the capabilities and efficacy of MILITEC-1, in order to directly and indirectly prevent the use of MILITEC-1 by federal agencies and troops, and/or to interfere with Militec's ability to sell MILITEC-1 to these federal agencies and troops. The intent of this strategy is to force federal agencies and troops to buy and use lubricants, such as CLP, that do not work and/or do not work as well as MILITEC-1 in the war theater and adverse environments, such as the desert. See Attachment 8, generally, and Attachment 8 at Enclosure 10; See, also, Attachment 20.3 and 20.4 (specifically identifying this strategy on "non-approved" small weapons lubricants as applying to MILITEC-1).

4) Gross Waste, Fraud and Abuse.

The foregoing actions and inactions result in a gross waste of government funds, fraud and abuse. They endanger the lives of military and civilian personnel in war theaters, such as OIF and OEF (Operation Iraqi Freedom and Operation Enduring Freedom ("OIF/OEF"), providing products that do not work and preventing delivery of products that do.

5) De Facto Debarment and Suspension of Militec Without Due Process.

In addition, these actions result in a de facto debarment/suspension of Militec from federal procurement without affording Militec appropriate due process.

As noted above, specific information in support of these allegations will be found in the Attachments accompanying this letter. Attachment 1 includes Militec's letter and accompanying materials sent to Patrick Finegan, DSCR (Deputy Chief, Aviation Supply Chain Commodities Division, DLA) on June 21, 2006 in response to DSCR Patrick Finegan's letter to Militec dated May 31, 2006. Attachment 20 through 20.5 includes documentation recently released by DSCR in response to a Freedom of Information Act request. Militec possesses additional documentation in support of these points and, when the IG is ready to receive them, Militec would be happy to supplement this letter and provide such additional support.

Conclusion: The foregoing actions amount to waste, fraud and abuse that is within the Inspector General's authority to investigate and correct. There is a significant federal interest in ensuring that the Army and all DOD troops operating in the war theater have properly functioning weapons and equipment. To have these weapons and equipment properly cleaned, lubricated, conditioned, and preserved, the Army's RDECOM, ARDEC, TACOM and others are charged with establishing proper NSNs and specifications for products for needed activities and qualifying products that meet those NSNs and specifications. DSCR and other DLA buying entities are charged with procuring compliant products and services. Where these entities are not establishing appropriate specifications, are qualifying and procuring products that do not meet the actual needs of the troops in the war theater something must be done.15 Militec has told DSCR and RDECOM, ARDEC and TARDEC about the capabilities of its proprietary product. It has also told them that the Army CLP and GPL specifications are overly restrictive and/or defective because they do not address the unique dry lubricating and metal conditioning properties needed for the use of weapons and equipment in the war theater desert environment, such as OIF/OEF desert environment. It has told them of the special problems with the Army's use of CLP products on equipment and weapons, especially in OIF/OEF type desert environments. And, it has told them that MILITEC-1 is the lubricant of choice among troops in these war theaters because it has dry lubricating and metal conditioning properties that prevent weapons and equipment from getting clogged and jamming. Militec has provided these entities substantial evidence supporting its assertions. It has sent them an abundance of emails and other communications that were sent to Militec by personnel in the Army and/or in the war theater and elsewhere, which identify ongoing problems with the CLP specifications and products, praise Militec for the effectiveness of the Militec product on weapons and equipment, and, in fact, state that MILITEC-1 works better than CLP on weapons and equipment, especially in adverse conditions and desert environments.16

Despite raising the serious concerns associated with the CLP and GPL wet oil specifications and their product deficiencies, the need for employment of the dry synthetic lubricant and metal conditioning product MILITEC-1 in the war theater desert environment, such as the OIF/OEF desert environments, the very real dangers to the troops when the wet CLP is used on weapons and equipment in these environments, and providing the factual documentation in support of these allegations, Militec has now effectively been told that the Army has flunked the MILITEC-1 product under the GPL specification MIL-PRF-32033 (Rev 6). This GPL specification is inapplicable to and, indeed, has never been associated with the MILITEC-1 NSNs nor used before to test that product. See, e.g., Attachment 20.3 at p. 7 (email from Whalen to West, dated February 28, 2005 11:58 a.m.). Even though the Army's testing of MIITEC-1 was premised on an improper specification, DSCR now appears to have spread this information as to MILITEC-1"deficiencies" to Militec's other users in a blatant attempt to further its planned strategy to discourage troops from using MILITEC-1 and to increase demand for CLP by improperly disparaging and commercially harming Militec. Further, it appears that DSCR has complied with the Army request that it be removed as a listed user of the NSNs based on this inappropriate testing. Indeed, the DSCR website shows that DSCR has currently blocked any access to MILITEC-1 NSNs by the public. Attachment 25. Further, on information and belief, it appears that DSCR, as a result of these improper Army actions, now may be poised to cancel Militec's NSNs. By their actions, the Army and DSCR have applied inappropriate Army wet lubricant specifications to a proprietary commercial product with special dry lubricant and metal conditioning characteristics. They have used inappropriate and faulty specifications to intentionally eliminate MILITEC-1 from use on government weapons and equipment. These actions appear to have been done with the specific intent to mislead not just the Army's troops, but DSCR and other users. These actions place national security interests in jeopardy and perpetuate a fraud -- that only CLP products pass the Army sponsored tests and works; MILITEC-1 and all other products do not work17 -- on the government and government users of these products including U.S. troops whose lives depend on the efficacy of the lubricants they use on their weapons and equipment especially in the current desert war theater.

Further, Militec is suffering multiple types of harm by virtue of the foregoing deliberate actions by DSCR and the Army. Militec has been afforded no opportunity to be heard and no meaningful review and relief for any of these harms. It is Militec's sincere belief that Militec has been retaliated against because of its attempts 1) to raise bona fide concerns regarding improper actions by DSCR and the Army, actions taken without regard to established procedures and government requirements, and 2) to exercise its due process rights to address agency actions against it.

Militec requests that the IG immediately establish an independent, objective fact-finding group to investigate the allegations raised in this letter and enclosed attachments.18 Militec believes this matter must be handled and reviewed at a higher level than DSCR and RDECOM, using persons who have not previously been involved in the matters raised and who can objectively review, assess and make determinations regarding the concerns raised. Militec believes it is particularly important that these issues be raised to a level above DSCR and RDECOM since senior RDECOM personnel 1) have been involved in actions that have harmed Militec interests for a number of years and clearly do not appear to be objective19 and 2) by virtue of their seniority, have the capability to assert undue influence over DSCR and other lower level activities and personnel.

Militec looks forward to a complete investigation of these allegations and pledges its cooperation in this investigation. Please contact the undersigned counsel in the event you wish to speak with Militec personnel and/or obtain additional supporting information, documentation and potential contacts regarding the points raised in this letter

Sincerely,

Brad Giordani
President
Militec Corporation

Enclosures (via overnight delivery)

cc: Steven Hilton, Esquire
Susan Warshaw Ebner, Esquire
Mike Child, Esquire

1 MILITEC-1 is a proprietary synthetic dry lubricant and metal conditioner sold under NSN Nos. 9150-01-378-3058, 9150-01-378-3118, 9150-01-415-9112, 9150-01-415-9111, 9150-01-415-9114 (herein "MILITEC-1 NSNs"). All MILITEC-1 NSNs cover the same formula of MILITEC-1, the different NSNs only reflect the different bottle sizes and quantities contained in a case of MILITEC-1. Militec was awarded NSNs for MILITEC-1 for weapons and machine shop applications and approved for use by Assistant Deputy Under Secretary of Defense (Materiel and Distribution Management) Emihauser in 1995 and Acting Under Secretary of Defense Wynne in 2004. Attachment 1 (establishing NSNs for MILITEC-1's use as weapons and machine shop applications in various size containers), Attachment 2 (establishing NSNs for MILITEC-1's 1 ounce and 4 ounce containers for weapons grade and machine shop applications); Attachment 3 (confirming Army approved use of MILITEC-1 as a small arms lubricant and metal conditioner for general use in combat); Attachment 4 (confirming processing of requisitions for MILITEC-1 under NSNs). See, also, Attachment 5 (MILITEC-1 is a weapons lubricant available to military users under its NSNs); Attachment 6 (confirming establishment of NSNs for MILITEC-1's 1 ounce and 4 ounce containers for weapons grade and machine shop applications); Attachment 7 (Army Regional Support Group, 81st Regional Support Command "has proven [MILITEC-1] to reduce weapon malfunctions due to inadequate lubrication, does not mist during repeated firing, and reduces carbon build-up, therefore, man-hours expended on cleaning and maintenance," document also establishes MILITEC-1may be requisitioned by Army for use on individual and crew served weapons).

2 See Attachment 8, at Letter to Patrick Finegan, dated June 21, 2006, at pp. 4-5 and Enclosures 1 and 10.

3 CLP specifications include MIL-PRF-63460(Rev D) (Attachment 9) and MIL-PRF-63460(Rev E) (Attachment 10). The Army is continuing to try to develop CLP for use in harsh desert environments in lieu of looking at products that already exist to service weapons and machinery in such environments, such as MILITEC-1. Attachment 10 (announcing testing of CLP products under MIL-PRF-63460 (Rev E) for harsh desert environments). GPL specifications include MIL-PRF-32033, Lubricating Oil, General Purpose, Preservative (Water Displacing, Low Temperature) (Attachment 11).

4 Attachments 8 (Letter to Finegan and exhibits), Attachment 19 (print outs of sample searches for MILITEC-1 NSNs, showing DSCR changes in item description from, e.g., Corrosion Inhibitor, Lubricating Oil, to Lubricating Oil, General Purpose (GPL)).

5 Attachment 1, Letter from William Finkel, Chief, Products Services, Product Definition, Supply Management Policy Group, Defense Logistics Agency; Attachment 2, Letter from Assistant Deputy UnderSecretary of Defense (Materiel and Distribution Management) Emahiser, Attachment 3, Letter from Assistant Deputy Under Secretary of Defense Wynne, and Attachment 5, Letter from Rear Admiral Lyden, Commander, Defense Logistics Agency (expressly establishing and authorizing NSNs for MILITEC-1 for the military to use to acquire MILITEC-1 for lubrication of weapons and machine shop applications.)

6 For example, DSCR's alternate source qualification rules provide that the offeror of a proposed alternate source must provide clear information to establish its proposed product has the same salient properties and characteristics as the identified product and technical requirements contained in the NSN. See, e.g, DLAD procurement regulations at 52.217-9002 Conditions for Evaluation and Acceptance of Offerors for Part Numbered Items (July 2002) at (c)"Alternate Product." DSCR and the Army approved an alternate source to MILITEC-1 under these MILITEC-1 NSNs even though the alternate product’s documentation contained conflicting statements of technical capabilities, which conflicting statements did not indicate conformity with the salient properties and characteristics of MILITEC-1, the product identified in the NSNs, and it did not contain a properly dated Material Safety Data Sheet per 29 CFR Part 1910.1200(g)(2)(xi). Attachment 20, Documentation produced by DSCR in response to Freedom of Information Act Request, Attachment 20.1 (qualifying source data produced in response to FOIA request to DSCR).

7 The Army has also tested MILITEC-1 under CLP standards and simulated desert conditions and found MILITEC-1 wanting. The Army's tests however were premised on defective and/or overly restrictive specifications for wet lubricants and, upon information and belief, the simulated desert condition testing involved, for example, the use of flour and not real sand and involved wet applications of MILITEC-1 and not dry applications as specified in MILITEC-1's stated dry application procedures. See, e.g., Attachments 12, 22, 27.

8 Militec has challenged these actions at the agency level. Attachment 8. However, to date, the Government has not responded. Militec has not been afforded any relief or opportunity for due process. On information and belief, the DSCR and Army continues to block of sales of MILITEC-1 for small arms and equipment use.

9 Interestingly, although the same formula, the Army and DSCR classify the use of the MILITEC-1 products in sizes .5 ounce and 8 ounce as corrosion inhibitors, not general purpose lubricants. See, e.g., Attachment 19.

10 Attachment 28 at p. 3 of 16, "Not approved by DOD for use as a small arms lubricant or as an oil/fuel additive," is an example of the DSCR attempts to change the NSN uses without permitting Militec an opportunity to be heard. Militec has repeatedly protested this type of language in a DSCR solicitation, and in lieu of permitting Militec an opportunity for its concerns to be heard, the DSCR has cancelled the challenged solicitation. Attachment 8.

11 In fact, the Army, through DSCR, purchased from Militec more than $3 million worth of MILITEC-1 for “war use” during Operation Iraqi Freedom in 2003-2004.

12 See, e.g., Attachment 20.3 at p. 7 (email from Stephen Whalen, AMSRD-AAR-ADD-W, to Jeff West, dated February 28, 2005 11:58 a.m. ("Jeff, as far as I know the NSN for Militec is particular to that brand only and is not connected to any specification or TDP. There is no way any other product can compete for that buy.")

13 Militec protested these improper procurement actions, but its protests were either denied or dismissed as moot after DSCR unilaterally cancelled them. Attachment 8 (Letter to Finegan and accompanying enclosures).

14 On information and belief this relates to the MILITEC-1 IDIQ sole source contract that DSCR ultimately cancelled.

15 In its press conference, the Army stated that CLP products will work to lubricate troop weapons, but the weapons should be cleaned and lubricated as much as 4 to 8 times a day. In a wartime situation where troops can be attacked throughout the day and night, a specification that results in a product that requires this much time to lubricate and clean weapons is unrealistic, poses a tremendous danger to the troops, and may in fact be an impossible standard for troops to follow. Attachment 8 at Enclosure 10.

16 The Army apparently is taking the position that MILITEC-1 does not work in the war theater desert environment and/or does not work as well as CLP or GPL in such an environment when it has NEVER tested these products in that actual desert environment. For example, in response to a March 14, 2006 Freedom of Information Act (FOIA) request for records on the Army's testing of weapons lubricants under desert conditions in the Middle East, after four months of delay and request for clarification, the Army through RDECOM and then ARDEC ultimately responded on July 27, 2006 stating that after reviewing Army Research Laboratory (ARL) Library and ARL Weapons and Material Directorate Project Files it has determined that "no records" exist. Attachment 26 (FOIA request, Army and ARDEC communications regarding FOIA request for records relating to Army testing of lubricants in the Middle East). Had the Army done such testing, one would think some record of it would exist.

17 The Army tested to biased specifications and came out with biased results, that only CLP met those requirements. See, e.g., Attachment 8 at Enclosure 10 ("The Army Test and Evaluation Command tested 21 samples received by [sic] manufacturers, as well as the two CLPs already approved at the time, under multiple categories of application and a wide variety of operating environments. … bottom-line, end-state to the tests was that the superior performers in all categories turned out to be those products which were already approved by the Army….")

18 Militec previously filed an IG Complaint with the DOD hotline in 2003 alleging problems with CLP, Case # 82911. While the IG apparently did not determine Militec's Complaint at that time warranted follow-up, actions since then by the Army and DSCR auger for a thorough review of the problems identified in this Complaint.

19 RDECOM/ARDEC and others have engaged in a very public course of conduct that harms Militec by besmirching Militec's good name, falsely disparaging Militec's product and causing other potential purchasers and users of MILITEC-1 to believe that MILITEC-1 does not work and in fact harms equipment and weapons. Attachment 8 (Letter to Finegan) at Enclosure 10 (excerpts of articles).

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