Only four months after it won a major U.S. Defense Department contract, the Grand Junction defense contractor Capco Inc. has won another, this time for the U.S. Navy.
Last week, the company was awarded a $13.3 million five-year contract to manufacture M943 impulse cartridges that are used on B-1B and B-53H bombers, according to the Naval Supply Systems Command Weapon Systems Support.
Work on those cartridges is to be completed by August 2025.
The new contract comes on the heels of a larger one in April, when the Grand Junction company was awarded a $33.6 million U.S. Army contract to provide 1,000 40mm M320 grenade launchers and 15,000 40mm M320A1 launchers by April 2025, according to the New Jersey-based U.S. Army Contracting Command.
Those are the same grenade launchers for which Capco had to pay a $1 million settlement last year because of a faulty firing pin. The company, which has about 370 workers, is already two years into a nearly $40 million Navy contract to build similar cartridges, which are explosive pressure devices used to deploy countermeasures or releasing other types of ordnance from aircraft.
Unlike the Army contract the company was awarded earlier this year, on which Capco was the sole bidder, it was one of three that submitted bids to the Navy.
In December, Capco entered into a settlement agreement with the U.S. Attorney’s Office for the District of Colorado over allegations that the company had defrauded the Army when manufacturing part of the grenade launchers it had been supplying from a similar contract it won in 2015. According to that settlement, to which Capco admitted no wrongdoing, the company manufactured and shipped M320 grenade launchers between July 2016 and March 2018 that used the wrong steel in making the firing pins.
The matter came to federal prosecutors’ attention in November 2017 when former Capco quality engineer James Cole filed a complaint against the company in U.S. District Court. In that complaint, Cole said the company submitted false claims to the Army for weapons that it knew did not meet specifications, and then knowingly withheld that information from the Army.
Less than six months after that lawsuit was filed, the company was awarded three contracts worth about $113 million for various products to the Army and Navy. Those 2018 contracts were the last time the company was awarded military contracts before this year, according to the U.S. Department of Defense.
Those earlier contracts allowed Capco to construct an additional 35,000-square-foot building on South 12th Street, and hire 20 more workers.
That expansion was possible because of a 2017 $34 million contract to build bomb fins for foreign military sales, including to Canada, Iraq and Taiwan.
Company officials could not be reached for comment, but when it qualified for a 10-year tax incentive from Mesa County last fall on a portion of its business personal property taxes, Capco President and Chief Operating Officer Peter Dawes said the company had increased its workforce by 25%.
The company also is near completion of a $33 million contract awarded in July 2015 for the same type of grenade launchers as in the Army contract.
Capco also was among several Grand Valley companies that received millions of dollars in Payroll Protection Program loans from the Small Business Administration in April, a program approved by Congress to help businesses keep workers on staff during the COVID-19 pandemic.
Capco received between $2-5 million.