Air Force explains information mixup on KC-X contract

Thursday - 1/27/2011, 7:57pm EST

From "Air Force ‘impressed' with EADS, Boeing in tanker mixup" by Jared Serbu on FederalNewsRadio.com:

The Air Force briefed lawmakers Thursday on its investigation into a mishap that led to two contractors getting data about one another's planes, saying that neither the vendors nor the government violated the Procurement Integrity Act.

The Nov. 1 mixup was the latest embarrassing hiccup in a troubled acquisition process that has stretched out for a decade and is expected to finally come to a conclusion sometime in the next several weeks. The two bidders for a new generation of aerial refueling tankers, EADS and Boeing, were given data disks containing information on each other's aircraft.

"This is a case study of incompetence in contract competition, this whole debacle, from the beginning to this very moment," Sen. Claire McCaskill, (D-Mo.) said at the hearing. "And contracting competition for something like this has to be a core competency. We can call it an accident, but it's incompetence."

But the Air Force investigation has found that none of the information was proprietary and that none of it related to pricing. The disks did contain the preliminary scores that the Air Force had assigned to each plane using its Integrated Fleet Aerial Refueling Assessment, but the scores were not yet finalized, said Air Force Maj. Gen. Wendy Masiello, the program executive officer for the Combat Mission Support Office.

She said both companies handled the data in a secure, classified area.

"Both companies put the other company's disk in the computer," she said. "One of the companies realized what they saw on the disk right away was probably something they shouldn't look at. The second company opened one of the files on the disk."

The second company-EADS North America-said in a statement released Thursday that its analyst viewed the data for no more than 15 seconds before realizing what it was, and immediately left the room and contacted another EADS employee to determine what steps to take next. Masiello said both companies put the disks into secure safes and alerted the Air Force. EADS and Boeing returned the disks within 24 hours, she said.

Forensic auditors at the Defense Department's Cyber Crime Center examined both computers that the companies used to read the disks. The center's executive director, Steven Shirley testified that its findings were consistent with both companies' statements - and that the file was open on the EADS computer for no more than three minutes. There also was no evidence that the file had been printed or that any files were copied to an external data storage device.

In the incident's aftermath, the Air Force decided to make the data available to both parties to "level the playing field."

Masiello wasn't able to speculate as to whether the improper data disclosure impacted the bidding process in any way. But at a Pentagon briefing Wednesday, spokesman Geoff Morell said it was still DoD's view that it did not.

"It is our expectation that this would not affect either the awarding of the contract—which there's no reason for it to—or anyone's decision in the wake of that awarding to protest," he said.

Thursday's presentation didn't shed much light on how or why the Air Force inappropriately sent the disks in the first place. But Masiello said two employees who were involved have been removed from the tanker program.

McCaskill demanded further details on those employees.

"I would like to know where they are, I would like to know if they're still making the same amount of money, and I would like to know if they're going to resurface later in another position of responsibility," she said.

Masiello said as far as the two companies are concerned, there is no indication that either took any actions that were inappropriate.

"I was really quite impressed by the responses on both companies' part when they realized they had data they shouldn't have had," she said. "My assessment is they all acted very appropriately, and they have certified to that effect."

The Pentagon is expected to award a $35 billion contract for 179 planes soon. The committee's ranking member, Sen. John McCain (R-Ariz.) said the committee should have waited until after the contact was awarded to hold the hearing. He and other senators said they are concerned that holding the hearing and releasing information prior to the final award would only complicate matters.

"I think this is a bad idea," he said in an opening statement. "I think we could wait until just a few weeks from now when a final decision is made. Given all of the controversy, all the legal challenges, why would we not just wait a few weeks before releasing this information which could cause further disruption to the competition? I don't think it does any good at this time, and I say that as a person who has been very much an advocate of total transparency."


I played highlights of the hearing on the show today. You can click here to watch the entire hearing.