Policy Letter

POGO Letter to Acting DoD IG Heddell concerning Defense Contract Management Agency awarding an employee for helping Air Force and Lockheed Martin undermine then-Secretary of Defense Rumsfeld's efforts to cancel C130-J program.

Gordon S. Heddell

Acting Inspector General

Office of the Inspector General

U.S. Department of Defense

400 Army Navy Drive

Arlington, VA 22202-4704

Via facsimile: (703) 604-8310

Dear Mr. Heddell:

We are writing to urge you to investigate whether the Air Force and Lockheed Martin are exerting inappropriate influence over the Defense Contract Management Agency (DCMA).

In light of the ongoing controversy regarding the Defense Contract Audit Agency (DCAA), we are concerned about other Defense Department oversight agencies whose integrity or independence may also have been compromised, indicating a far deeper cultural problem for Pentagon oversight agencies.

In December 2004, then-Secretary of Defense Donald Rumsfeld recommended termination of the contract to produce C-130Js in the Presidential Budget Decision (PBD) 753. However, after the Secretary’s decision, an aggressive lobbying campaign was undertaken by the U.S. Air Force and Lockheed Martin (LM), who were intent upon saving the C-130J contract from termination despite the aircraft’s many flaws.

Attached is an award justification letter for the performance of an employee of the DCMA located at the Lockheed Martin Marietta, Georgia , plant during calendar year 2005. Much of this letter concerns the efforts of the employee to undermine Secretary Rumsfeld and help the U.S. Air Force save the C-130J contract from termination. In fact, according to the letter, this individual:

“…served as the lead focal point for providing support to the Department of the Air Force in its effort to challenge the Presidential Budget Decision concerning the C-130J program … [He] provided critical data, analysis and assessment information that supported the USAF’s case for the continuation of the program…. Information that [he] provided was directly used in discussion on Capitol Hill with opponents of the C-130J program and provided to Secretary of Defense D. Rumsfeld. [He] had a direct influence over Honorable Rumsfeld’s decision to remove the C-130J program from the PBD list of programs to be terminated. … [His] effort was very critical in the SPO [Air Force System Program Office] and SAF [Secretary of the Air Force] defending its position for the MYP [Multi-Year Procurement]. The information was briefed up the chain to Senator McCain and as a result, LM’s ETC [Estimate to Complete] for the MYP was substantiated and the C-130J program was sustained.”

These activities would surely be an inappropriate use of government resources given that the DCMA serves as the Department’s contract manager and watchdog, ensuring that contractors deliver on time, within projected costs, and meeting contract specifications. The letter provides a shocking level of insight into the resources, time and effort that was spent by an agency inside the Department of Defense working with the contractor to thwart Secretary Rumsfeld’s decision to terminate the C-130J. We are particularly disturbed that the DCMA assisted the Air Force and Lockheed Martin in its lobbying efforts.

As we now know from your investigation in June 2006,[1] the lobbying effort to save the C-130J even involved the creation of fictitious figures which grossly overstated the potential costs for canceling the program. According to the DOD IG’s report, $1.1 billion of the $1.78 billion alleged cancellation cost could not be substantiated. It was only because these fictitious figures made it falsely appear that the continued purchase of the aircraft under a Multi-Year Procurement was a good deal for the taxpayers that the cancelled C130-J program was revived.

We urge you to investigate the DCMA’s role in helping Lockheed Martin and the Air Force thwart Secretary Rumsfeld’s C-130J decision and legitimate Congressional inquiry, and whether the Air Force and Lockheed Martin had inappropriate influence over the DCMA.


Danielle Brian

Executive Director

Project On Government Oversight (POGO)

cc: Chairman Joseph Lieberman

Senator Susan Collins

Chairman Carl Levin

Senator John McCain

Senator Claire McCaskill


1 Contracting and Funding for the C-130J Aircraft Program- Report No. D2006-093 (PDF) Project No. D2005-D000AB-0214.000