Kill-Vehicle Contract Awarded Without Full Review, GAO Says
The General Accounting Office (GAO) reported January 27 that the
contract for a key element of the Pentagon’s strategic missile
defense system was not awarded on technical or cost considerations,
but because one of the two companies competing for the project wrongly
obtained and used secret information from its rival.
In late 1998, Raytheon Co. was chosen to build an exoatmospheric
kill vehicle (EKV)—a light-weight device launched into space
atop a rocket to locate and collide with an enemy warhead. Although
a division of Boeing Co. had an alternative EKV program underway,
GAO found that “no formal criteria were used to evaluate the
two systems, and there was no formal technical comparison or analysis
used by the decisionmaker to select the EKV.”
Tasked with conducting studies and investigations for Congress,
GAO determined that Raytheon won the EKV contract because of concerns
that a fair competition could not be held since Boeing employees
had acquired and then “surreptitiously” used a Raytheon
software testing document. “The anticipated evaluation of the
competing EKV systems was never made,” GAO reported.
The Raytheon EKV is now part of the proposed missile defense system
that the Bush administration plans to start deploying next year.
(See
ACT, January/February 2003.)
Allegations that Raytheon won the contract by default have been
made for years, but GAO is the first government body to confirm
them officially.
In April 1998, the Ballistic Missile Defense Organization (BMDO),
now the Missile Defense Agency, named Boeing the lead company in
charge of managing the ground-based missile defense program, meaning
that Boeing was put in charge of awarding contracts for various
elements of the system, including the EKV. At the time, a division
of Boeing had been working on an EKV design for roughly eight years
and was competing with Raytheon for the EKV contract. Boeing assured
Raytheon that a fair EKV competition would be held.
But at the end of July 1998, a Boeing official found the Raytheon
software testing document in a conference room of Boeing’s
EKV team. Boeing notified Raytheon of the discovery and then spent
the next few months trying to reassure Raytheon that a fair EKV
selection could still take place. Raytheon remained unconvinced.
With Raytheon unmoved by Boeing assurances and growing concern
that an EKV decision had to be made sooner rather than later in
order for a system to be tested in time for a scheduled June 2000
presidential deployment decision, Boeing gave Raytheon the EKV contract.
BMDO agreed with the Boeing move.
Both Boeing and BMDO, according to GAO, believed either EKV was
advanced enough to select for future flight-testing. A top Boeing
official, however, told GAO that some concern existed that the Boeing
EKV effort was falling behind schedule.
GAO was unable to find any document setting out a formal decision
to abandon a competition between the two companies, both of which
had received roughly $400 million from the Pentagon to develop their
separate EKVs up to that point.
To guard against the possibility of being left without an option
if the Raytheon EKV performed poorly in testing, Boeing and BMDO
decided to keep funding a Boeing backup effort at approximately
$4 million per month until after the system’s fourth flight
test, which occurred in January 2000.
The U.S. government decided against prosecuting or punishing Boeing,
which fired three employees and suspended another for their actions,
and last summer it dropped efforts to recover some financial compensation.
Boeing remains in charge of developing the ground-based missile
defense system.
Representative Howard Berman (D-CA), who commissioned the GAO report,
stated February 7, “This study revealed a horribly flawed process
and some inexplicable conduct by missile defense officials and contractors,
both in pursuing the most effective system and in protecting U.S.
taxpayers.”
In light of the GAO findings, Berman also questioned the validity
of recent Pentagon efforts to reduce congressional reporting requirements
on missile defense programs. “This report demonstrates the
real dangers associated with such a trend,” Berman warned.
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