Some friction in the complexTweet
February 10, 2005
The typical coziness between the Pentagon and defense contractors is being somewhat rocked by recent developments.
Today's Washington Post has a story on how former Air Force Secretary James G. Roche misused his office, according to the Defense Department Inspector General. Here's a brief summary of this one part of the Boeing tanker lease scandal. While Roche was Air Force Secretary, he tried to get the brother of Office of Management and Budget Associate Director Robin Cleveland a job at Northrop Grumman, where Roche had previously been a senior executive. At the same time the Roche was trying to get OMB approval of a $30 billion Boeing tanker leasing deal, which the OMB had earlier criticized as a "waste of money." In essence, Roche was trying to get OMB to get on board by offering favors to a senior OMB official. It's the most reasonable interpretation that is supported by the email from Roche to Cleveland, where Roche wrote, "Be well. Smile. Give tankers now (Oops, did I say that? . . .)."
This deal has been heavily criticized by Sen. McCain (R-AZ) and Sen. John Warner (R-VA) of the Senate Armed Services Committee, among others (including POGO). McCain and Warner have called the leasing deal "one of the most significant contracting abuses in several decades." It definitely is, among the ones we know about.
GovExec has a story on how Science Application International Corp. (SAIC), a defense contractor, is waging a campaign against a December 2004 Air Force memo that stated that SAIC violated the Truth In Negotiations Act (TINA). TINA requires contractors to provide accurate pricing information to the government. The memo says that the Justice Department "believes that SAIC is continuing to submit defective cost or pricing data in support of its price proposals." Further,
"SAIC used hidden 'risk reserves' to inflate its cost proposals, thereby inducing the Air Force to agree to much higher prices than the Air Force would have agreed to had SAIC truthfully disclosed its cost and pricing data."
SAIC has the gall to tell the Justice Department that it will continue to not disclose the real cost and pricing information to the Air Force. SAIC wants the Air Force to retract or change the memo it sent out warning its contracting officials about SAIC and advising them to demand disclosure. The Air Force should not bow to the demands of a law-breaking contractor that's ripping it off. The Pentagon should stand by its memo.
MORE: Hey, wait a minute. Isn't SAIC also the company that was paid $170 million by the FBI for a computer database system that hardly works and is already outdated? It is.