GAO says problems justify rebidding C-130 contract

Watchdog agency says award was tainted because Darleen Druyun, formerly the Air Force's second-ranking acquisition official, was biased in favor of Boeing.

The Government Accountability Office recommended Thursday that the Air Force rebid the installation portion of its $4 billion C-130 avionics modernization contract with the Boeing Co. and study the possibility of rebidding the entire 3-year-old contract.

In response to bid protests filed last year by losing contractors Lockheed Martin, L-3 Communications and BAE Systems, GAO concluded that the award was tainted because Darleen Druyun, who at the time was the Air Force's second-ranking acquisition official, was biased in favor of Boeing, according to GAO testimony before the Senate Armed Services AirLand Subcommittee.

Last year, Druyun was sentenced to nine months in federal prison for violating a conflict of interest statute after admitting to bias in favor of Boeing on various procurements, including the C-130 avionics program, and the now infamous $29 billion deal to lease aerial refueling tankers.

GAO subsequently received protests from other firms challenging Druyun's alleged improper influence on Air Force contracts awarded for the small diameter bomb program and the C-130 avionics modernization upgrade.

The Air Force argued that, notwithstanding Druyun's bias in favor of Boeing, "there is no evidence that Mrs. Druyun influenced the SSET [source selection evaluation team]" and that, overall, "the evaluation process was conducted properly and in accordance with the evaluation criteria."

But GAO's investigation found Druyun was the lead official throughout the procurement, countering the Air Force's assertion that there was no evidence she influenced the source selection evaluation team.

And because of her failure to treat all offers fairly during contract negotiations, GAO rejected the assertion that the evaluation process was conducted properly. Finally, because the record failed to establish that any one of the bid protesters was not prejudiced as a result of the various procurement flaws, GAO sustained the C-130 protests.

The Air Force reported that rebidding the installation phase of the C-130 contract is feasible, but that rebidding the entire contract would not be in the best interests of the taxpayer or consistent with national security concerns.

GAO also recommended the Air Force conduct a competition for the moving target requirement associated with its small diameter bomb program.