DOD Inspector General: Investigation Regarding Assertions Made By Former United Launch Alliance Executive
Full document http://www.dodig.mil/pubs/documents/DODIG-2017-020.pdf
EXECUTIVE SUMMARY
The Department of Defense Office of Inspector General (DoD OIG) conducted this investigation at the request of the Secretary of Defense regarding assertions made by Mr. Brett Tobey, United Launch Alliance’s (ULA) former Vice-President of Engineering. His assertions were related to competition for National Security Space (NSS) launch missions, and whether the United States Air Force (USAF) Space and Missile Systems Center (SMC) awarded contracts to ULA in accordance with DoD and Federal regulations.
On March 15, 2016, the University of Colorado-Boulder’s Aerospace Engineering Sciences Department hosted a seminar featuring Mr. Tobey, who spoke about “ULA’s Competitive Transformation” and the Evolved Expendable Launch Vehicle (EELV) Program.1 During his presentation, Mr. Tobey made several assertions related to the EELV Program, implying that:
1) U.S. Senator John McCain said that ULA was “hiding five RD-180 engines” in its inventory to transfer them from NSS launch missions to commercial launch missions to influence congressional legislation;
2) contracts for NSS launches were not awarded fairly because the DoD gave an unfair advantage (“lean the field”) to ULA over other contractors;
3) a conversation occurred between the Under Secretary of Defense for Acquisition, Technology, and Logistics (USD[AT&L]) and the Lockheed Martin Chief Executive Officer (CEO) concerning the replacement of RD-180 rocket engines and a need to find a way to “silence” Senator McCain (keep him from attacking the DoD) regarding rocket engines manufactured in the Russian Federation; and
4) the DoD was “not happy” that ULA did not submit a proposal for a competitive launch service solicitation (Phase 1A Global Positioning System [GPS] III) because the DoD gave ULA an advantage over other contractors. Our investigation began with an in-depth review of Mr. Tobey’s assertions (audio recording and its transcript). Based on our review, we developed four investigative objectives. To meet these objectives, we performed interviews of both DoD and contractor personnel and reviewed documents and contract awards.
First, did ULA improperly transfer five RD-180 rocket engines from NSS launch missions to commercial launch missions to influence congressional legislation? We determined that ULA did not improperly transfer five RD-180 rocket engines from NSS launch missions to commercial launch missions because: (1) Mr. Tobey said that he misspoke during the presentation; he said that RD-180 rocket engine allocation strategy was not his area of expertise; (2) these rocket engines were the property of ULA and the DoD had no control or property interests in the rocket engines; (3) the DoD contracted with ULA for NSS launch services, not for the purchase of specific rocket engines for NSS launch missions; and (4) the FY 2015 and FY 2016 National Defense Authorization Acts (NDAA) restrictions2 imposed by Congress on rocket engines manufactured in the Russian Federation did not apply to the five rocket engines in question because they were purchased prior to the February 1, 2014 deadline imposed by the FY 2015 NDAA. Therefore, we found no basis to support the assertion that ULA improperly transferred five RD-180 rocket engines from NSS launch missions to commercial launch missions.
Second, did the DoD provide an unfair advantage (“lean the field”) to ULA over other contractors during the procurement process for NSS launch contracts and was there collusion between DoD and ULA officials pertaining to the Phase 1 Block Buy and Phase 1A GPS III contracts for NSS launch missions? We determined that the DoD did not give an unfair advantage and did not collude with ULA for NSS launch contracts because: (1) Mr. Tobey told us that he misspoke during the presentation and that he did not mean to imply there was an irregularity in the space launch contracting process; (2) after multiple interviews of DoD and ULA personnel and our reviews of acquisition planning documentation, contracts, and internal DoD and ULA correspondence, we found no evidence of collusion; (3) the DoD’s implementation of its acquisition strategy was designed to introduce competition for the launch services contracts; and (4) ULA’s decision not to submit a proposal for the contract is inconsistent with the assertion that there was collusion between DoD and ULA.
Third, did the USD(AT&L) and the Lockheed Martin CEO violate the Procurement Integrity Act by engaging in a conversation concerning an acquisition strategy for a U.S.-made rocket engine to replace RD 180 rocket engines? Furthermore, did the USD(AT&L) and the Lockheed Martin CEO discuss a need to find a way to “silence” Senator McCain (keep him from attacking DoD) regarding rocket engines manufactured in the Russian Federation? We reviewed e-mails and calendar entries and performed multiple interviews of DoD and contractor personnel, including the USD(AT&L) and the Lockheed Martin CEO. Both the USD(AT&L) and the Lockheed Martin CEO denied discussing procurement information on a replacement for the RD-180 rocket engine. The USD(AT&L) and the Lockheed Martin CEO also denied discussing “silencing” Senator McCain. Based on our interviews and the review of e-mails and calendar entries, we found no evidence that the two violated the Procurement Integrity Act.
Fourth, did ULA violate its contractual obligations by choosing not to respond to Request for Proposal (RFP) FA8811-16-C-0001, (hereafter referred to as the “Phase 1A GPS III contract”)? Based on multiple interviews of DoD acquisition personnel and ULA personnel, and reviews of contracts, Other Transaction Authorities (OTAs),4 and source selection documentation, we determined that: (1) the DoD’s acquisition process was fair and equitable and (2) ULA did not have an obligation to submit proposals for competitive launch contracts.
During the DoD OIG team’s interviews of Mr. Tobey, he recanted the assertions he made during his March 15, 2016 presentation that gave rise to this investigation. Mr. Tobey said that there was no factual basis for the assertions he made during his presentation and characterized his assertions as postulation. Specifically, he stated:
I told the story with drama and my, you know, basically not perception, but my postulation of what might be happening at levels that I have no connection to…I’m postulating of telling about a political fight, with generalities for students, without the background of precise facts…I postulated about a lot of things that were happening not based upon fact, having no indication that the comments that I was making could go viral.
When asked the reasons he made the assertions, Mr. Tobey stated:
I’ve presented at the college forum for long enough and to come up with a compelling, entertaining topic is necessary in order to keep the college students engaged and off of their iPhones. [Paragraphs omitted] [i]f you listen to it (the presentation) without the context of knowing that I’m a newbie to the industry talking to a bunch of college kids, some of them doing research work for ULA, and trying to keep them engaged and off of their iPhones, this is — that was the mode I was in of adding this drama. If I had spent an hour and told them about my responsibility of reshaping ULA’s workforce and a standardization of tools, I don’t think I would have an engaged audience. I – this [sic] was purely speculation and postulation — and adding drama and this idea to a political environment that’s probably more documented in op-eds. The tone of my presentation was that of more of an op-ed than even a rational argument or article.
He went on to say:
Again, my comments were made in a classroom environment to a — what I believed was a private set of students and professors, where I felt very comfortable and got into a excessively casual tone of discussion with them. Those comments were then recorded, put out on the Internet, transcripted in, put into transcripts, quoted in sound bites that make them very damaging to ULA. And for that, I’m very sorry.
Full document http://www.dodig.mil/pubs/documents/DODIG-2017-020.pdf
