GAO Decision on Tainted Procurement

A recent Government Accountability Office opinion and related Washington Post article provide dramatic illustrations of:

1. The potentially devasting effect of a conflict of interest, which in this case damaged a $2.7 billion dollar program, and
2. The importance of documenting ethics advice given to employees departing government service and exercising care in contemporaneous oral remarks.

GAO's February 18, 2005 opinion in a bid protest case (Lockheed Martin Corporation, B-295402) involves former senior Air Force procurement official Darlene Druyun's work on a $2.7 billion "small-diameter-bomb" procurement. Here's GAO's summary of the decision:

Where the record shows that performance requirements, and associated evaluation criteria, were altered to delete a significant requirement and an evaluation factor under which the protester was viewed as having an advantage, and a senior procurement official, who was involved in discussions that culminated in the deletion of the requirement, has acknowledged bias in favor of the ultimate awardee, the protest is sustained on the basis that the agency has failed to demonstrate that the senior official's acknowledged bias did not prejudice the protester and that the integrity of the procurement process was not compromised.

The standard used by GAO is of crucial importance. Once a conflict of interest is demonstrated, GAO places the burden on the agency to provide "compelling evidence" that the conflict did not affect the procurement. It will usually be difficult or impossible for an agency to meet this burden:

In addressing organizational conflicts of interest, our Office has held that, where the record establishes that a conflict exists, we will presume that the protester was prejudiced, unless the record establishes the absence of prejudice. See The Jones/Hill Joint Venture, B-286194.4 et al., Dec. 5, 2001, 2001 CPD  194; TDF Corp., B-288392, B288392.2, Oct. 23, 2001, 2001 CPD 178. Similarly, where, as here, the record establishes that a procurement official was biased in favor of one offeror, and was a significant participant in agency activities that culminated in the decisions forming the basis for protest, we believe that the need to maintain the integrity of the procurement process requires that we sustain the protest unless there is compelling evidence that the protester was not prejudiced. See Department of the Air Force--Request for Recon., B-234060, B234060.2, Sept. 12, 1989, 89-2 CPD 228. As discussed below, the agency has failed to provide compelling evidence that Druyun's bias in favor of Boeing did not influence the various decisions leading to the award of the SDD contract to Boeing.

One section of the GAO opinion concerning testimony from a retired Air Force officer is of particular interest to ethics counselors. Lawyers representing Boeing pointed to alleged conflicts of interest by an Air Force brigader general who had retired and gone to work for Lockheed Martin. The phrase "30-day letter" is a reference to written ethics advice that was given to the general before separation from military service. "SJA" means Staff Judge Advocate, a senior military lawyer:

At the GAO hearing, [deleted] testified that, notwithstanding the above-quoted advice within the "30-day letter" that "Restrictions under other laws that have not been addressed in this opinion may apply to you" and that notwithstanding the specific reference to the restrictions of 18 U.S.C. 207(a)(1), (a)(2), he was subsequently advised, orally, by the SJA "not to worry about it," and that these provisions were only put into the letter to "Cover their butt."

A related story in today's Washington Post purports to identify the "deleted" witness. The Post quotes an Air Force spokesman as saying that the laissez-faire attitude described by the witness "is absolutely not a reflection of Air Force attitude or policy." A Lockheed Martin spokesman told the Post "We are confident we fully complied with all applicable post-government-employment regulations."