Boeing: NASA Mishandled GOES-R Award

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  Space News Business

Boeing: NASA Mishandled GOES-R Award

By PETER B. de SELDING
Space News Staff Writer
posted: 29 May 2009
03:55 pm ET






PARIS — NASA has suspended Lockheed Martin’s contract to build the GOES-R meteorological satellites following Boeing’s second protest of the award, NASA said May 21. The U.S. Government Accountability Office (GAO) has up to 100 days, to late August, to issue a ruling.

In an e-mail response to Space News inquiries, NASA spokesman Stephen Cole said NASA has issued a “stay of contract performance” order to Lockheed Martin following Boeing’s May 18 protest.

“Once a stay of contract performance is issued, all work under the contract stops,” Cole said. “Thus, there could be schedule slippages with program milestones since no work is being performed.” The first of the GOES-R satellites had been scheduled for launch in 2015.

Chicago-based Boeing filed its original GAO protest in late 2008 following NASA’s decision. The contract was suspended for what was expected to be GAO’s customary 100-day review.

But midway through the GAO examination, NASA agreed to “re- evaluate” its decision. “[A]s a result of that process, a series of corrective actions were implemented,” NASA said in a May 7 announcement saying it and the U.S. National Oceanic and Atmospheric Administration (NOAA) had reaffirmed the initial choice of Lockheed Martin Space Systems as GOES-R prime contractor. Cole declined to detail what corrective actions NASA took to improve its bid evaluation.

The contract is for two satellites with options for two more, with a total value, assuming the options are exercised, of $1.09 billion.

In a May 19 statement, Boeing said the NASA decision includes “serious flaws and a lack of transparency in the selection process.”

Boeing’s protest appears to go beyond questioning the technical merits of Lockheed Martin’s GOES-R bid to raising questions about NASA’s basic fairness in evaluating the bids.

In a May 19 e-mail, Boeing spokesman Joseph J. Tedino said Boeing has reason to believe it rated higher than Lockheed Martin in NASA’s evaluation, and that “NASA inexplicably changed the scores” during the initial evaluation in 2008. “These scores involved the mission-suitability factors – which are the most important factors in the selection process – and switched the positions of Boeing and Lockheed Martin in the competition.”

NASA’s Cole declined to address that point, saying it is now subject to an ongoing GAO review and under a “GAO protective order,” meaning NASA cannot comment publicly on it.

Boeing also alleges that “certain documents related to the initial evaluation were destroyed.” Cole said that, too, is covered by the protective order.

In a one-page summary of the original grounds for the protest, Boeing’s legal counsel, Cooley GodwardKronish LLP of Washington, said NASA never explained in detail how it arrived at its decision – in part because the agency routinely destroys documents relating to its evaluation process.

“NASA relies upon an evaluation process that generates the minimum possible record of its evaluation, and then destroys all but the highest level of documentation after the source selection is made,” the law firm said in its summary. “Regardless of the questionable merits of such a process, in this case it appears that NASA may have elected to hide certain events that were not consistent with the story it wanted to tell GAO and Boeing, and now it has no contemporaneous record to support the reasonableness of its actions.”

The law firm also said that NASA’s public explanation of its original decision – that Lockheed Martin received a slightly better score than Boeing on technical merits – was subsequently found to be untrue.

Acting in response to Boeing and GAO pressure to explain the decision, NASA provided documents that the law firm said appear to show Boeing as the winner on technical merit.

“[W]ithout any record evidence whatsoever to explain either the process used or the basis for the rescoring – NASA reduced Boeing’s score… [and] increased Lockheed Martin’s score,” according to the Boeing legal team.

The legal team’s summary does not address the issue of whether Lockheed Martin did in fact best Boeing on price. NASA had found Lockheed’s bid to be 6 percent less costly than Boeing’s. Tedino’s May 19 e-mail said Boeing has concluded that “our cost estimate is more believable because we built GOES N, O and P, which were used as the basis for the GOES-R price.”

Boeing’s GAO protest is also based on the fact that NASA has not explained its decision in detail to Boeing or granted Boeing’s request for face-to-face meetings.

In the NASA statement, Cole said: “Federal Acquisition Regulation (FAR) provides that debriefings may be done orally or in writing. Boeing was provided an oral debriefing after the initial award in December 2008. That debriefing was over three hours long and covered all aspects of Boeing’s proposal. The written debriefing NASA provided Boeing for the new evaluation provided Boeing all the information required to be disclosed by the FAR and also responded to all the questions that Boeing submitted to NASA.”

Tedino confirmed that Boeing received a NASA letter May 21, but he said the letter “does not adequately explain” the decision.

A separate contract for the GOES-R ground system will be announced this year. NASA’s Goddard Space Flight Center in , , is overseeing the GOES-R acquisition with funds from NOAA, which operates the satellites. In its May 19 statement, Boeing said it has filed only two GAO protests since 2000 – for GOES-R and for a contract to build U.S. Air Force aerial refueling tankers. A lengthy GAO review of the tanker award concluded that Boeing was correct in alleging that the tanker selection process was flawed.