Inquiry targets SOCom deal
Fraud allegations lead to an investigation of a Florida armsmaker.
By KRIS HUNDLEY
Published January 19, 2007
TAMPA - A Florida company that has supplied U.S. Special Operations Command with specialty weapons for decades is under federal investigation, military officials have confirmed.
The Naval Criminal Investigative Service is investigating Knight's Armament Co. of Titusville for "allegations of fraudulent business practices," said NCIS spokesman Ed Buice.
Knight's has received several multimillion-dollar contracts with SOCom and other branches of the military over the past 20 years, including a $110-million contract in March and a $10-million award on Jan. 3.
The NCIS, which investigates irregularities in Navy contracting activities, declined to disclose the focus of the Knight's investigation, which has been under way for about a year.
Officials at SOCom, based at MacDill Air Force Base in Tampa, deny any knowledge of the investigation.
C. Reed Knight, owner of Knight's Armament, was traveling on Thursday and did not respond to e-mailed questions.
Defense experts say it is not unusual for a company under investigation to continue to receive military contracts. But one military expert said the NCIS' involvement is significant.
"It's extraordinary for NCIS and those operations to be started up on something like this. That's a significant amount of smoke," said Winslow Wheeler, with the Center for Defense Information in Washington, D.C.
Paul Maxin, a competitor of Knight's and president of Optical Systems Technology Inc. in Freeport, Pa., said he has been questioned several times in the past year by federal investigators about a SOCom contract involving the two companies.
In that competition, SOCom picked Knight's over OSTI for a $25-million contract for sophisticated night sights to be clipped on Special Forces' sniper rifles.
Though the contract was awarded in late 2005, there has been a unusually long delay in getting Knight's high-tech sights into commandos' hands. Testing of the units was just completed in December, and no units have yet been put in the field.
SOCom said its testing of Knight's units was delayed because of two protests filed by the losing vendor, OSTI.
Both protests were denied by the Government Accountability Office. SOCom spokesman Ken McGraw said, "Knight's system had the overall best value rating when it and the competing system were tested by an independent government testing agency and evaluated against the formally established criteria in the competitive solicitation."
Sights for Marines
OSTI, meanwhile, landed a $40-million order in late December with the Marine Corps for up to 4,700 of its night sights.
Among the troops slated to get OSTI's scope are Marines Special Operations Command, which joined SOCom in February.
OSTI president Maxin is pleased with the Marine Corps' order but frustrated that SOCom deemed his night sight inferior.
"Why isn't it good enough for SOCom?" he said. "That's absolutely ridiculous. It's absurd."
Supplying SOCom with specialty weapons and equipment has become a big business over the past 20 years for Knight's Armament. In an interview in the summer, Knight said his company's sales were $100-million to $120-million a year, 95 percent from military contracts. A member of a fourth-generation citrus and cattle farming family in Vero Beach, Knight said he'd always had a passion for guns.
"I started chasing rainbows and working with counterterrorist teams in the early 1980s," he said of his unlikely career detour. "My very first contract with SOCom was in 1986. But I can't tell you what it was for."
Knight said he was outraged that during U.S. invasions in Grenada and Panama, Special Forces had to duct-tape flashlights to their rifles. He began producing metal parts that allow soldiers to clip everything from scopes to lights onto their M-16s. The adapter systems have become Knight's best selling product.
Another Knight innovation were specialty sniper rifles, developed by Gene Stoner, a renowned gunsmith who joined the company in 1990 and died in 1997.
9/11 changed it all
After Sept. 11, Knight said both his business and his personal reputation took off. Sales, he said, have doubled every year for the last four years. In 2003, he relocated most of his company to the former McDonnell-Douglas Tomahawk missile plant in Titusville, where he employs about 300.
"Before Sept. 11, 2001, my wife couldn't tell our kids' teachers what I did because I was considered an assault rifle manufacturer, a warmonger," Knight said. "Since Sept. 11, I've become a legitimate citizen. I'm very passionate about what I do."
Times researcher Cathy Wos contributed to this report. Kris Hundley can be reached at email@example.com or (727) 892-2996.
[Last modified January 19, 2007, 09:23:28]
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