Murray considers pushing procurement law changes
3-18-08
By KATHY MULADY
P-I REPORTER
Awarding a $35 billion Air Force refueling tanker contract to the parent of Airbus carries risks that will ripple far beyond the economic effect of sending tax dollars and jobs overseas; it also compromises national security, and gives away U.S. technology and capability, a gathering of aerospace suppliers told Sen. Patty Murray on Tuesday.
Murray, D-Wash., said she would consider pursuing legislation aimed at changing procurement laws to keep production of military equipment within the U.S., and she asked for help in making her case to Congress. Her colleagues, she said, see the issue mainly in economic terms.
"If the laws need changing, how do we do that, and how do we sell it in a global market?" she asked.
The Air Force stunned the aerospace industry last month by announcing that a team of the European Aeronautic Defense and Space Co. and Northrop Grumman would get the contract to build the refueling tankers. The Boeing Co. has filed a protest of the decision.
On Wednesday, Murray is meeting with labor leaders and workers at a rally near Boeing's Everett plant, where the tankers would have been built, to protest the contract.
"We need to have a serious conversation as a nation about what we lose," Murray said Tuesday. "Not many are thinking deeply about the military security we are giving away."
Suppliers questioned plans to finish the planes in Alabama, "in a facility that doesn't exist, by workers who don't exist, with engineers who aren't there."
They also questioned the effect of the heavier planes on runways and whether they would fit in hangars, how the planes will be maintained, where parts for repairs will come from, and how long it will take to get them.
"Are they going to be waiting for parts from France?" asked Steve Smolinske, president of Rainier Rubber.
And they wondered if foreign manufacturers would be required to operate under the same rules as the American suppliers.
"Is the military going to do background checks on the workers?" asked Rosemary Brester, president of Hobart Machined Products.
Another supplier said that at his company, national security rules are strict.
"Some people in our organization can't talk to other people, or be in certain parts of the building," said Tom Welsh, with Valley Machine Shop in Renton.
Suppliers questioned how the EADS-Northrop contract fits in with the Buy American Act that requires the government and its contractors to purchase American-made goods when available.
Murray said a possible answer might be in legislation for the aerospace industry that is similar to the Jones Act for the maritime industry.
The Jones Act of 1920, named after Washington Sen. Wesley Jones, limits the amount of repair and construction on U.S.-flagged ships that can be done overseas and regulates maritime commerce.
P-I reporter Kathy Mulady can be reached at 206-448-8029 or kathymulady@seattlepi.com.

Last updated March 20, 2008 11:54 p.m. PT
Why Northrop beat Boeing for tanker
Air Force says fewer planes would be needed for missions
By TONY CAPACCIO
BLOOMBERG NEWS
Northrop Grumman Corp.'s aerial tanker beat rival Boeing's plane for a $35 billion military contract in part because fewer of the aircraft would be required to meet wartime missions and it might be ready sooner, according to Air Force documents.
The Air Force would require 22 fewer Northrop tankers to meet classified homeland defense and combat scenarios covering the Pacific and Southwest Asia required in the competition, according to a document that outlined the service's selection criteria.
Boeing lost the 179-plane contract Feb. 29 to Northrop and its partner, the European Aeronautic Defense and Space Co., and protested the decision March 11. The Air Force briefing document made available to Bloomberg News indicates that although the contest was close, the Air Force decided the Northrop entry was better in some key areas such as turnaround time on refueling missions.
The Air Force also determined Los Angeles-based Northrop's plane was likely to need less development time to meet the goal of an April 2013 introduction, the document said.
Both companies offered "fair and reasonable prices" and "a reasonable business arrangement," the briefing document said. Northrop was deemed "more advantageous in mission capability" and "in key system requirements" and "program management," the document said.
The loss of the contest and appeals would end the hold Chicago-based Boeing has had on the Air Force tanker business since 1956. Boeing's entry in the latest contest was based on its 767 commercial plane, whereas Northrop's was based on the larger A330 made by EADS unit Airbus, based in Toulouse, France.
Boeing spokesman Bill Barksdale said the company was given the document with selected Northrop material redacted. Northrop spokesman Dan McClain confirmed his company also received the document with Boeing data deleted and declined further comment. Lt. Col. Jennifer Cassidy, an Air Force spokeswoman, also declined to comment on the documents.
The documents said Boeing's candidate had better communications capability and bested Northrop in some aerial refueling capabilities. The Boeing aircraft also was judged to have better survivability characteristics.
Even so, "Northrop Grumman provides better aerial refueling efficiency," said the slides prepared by the Air Force Aeronautical Systems Center at Wright-Patterson Air Force Base near Dayton, Ohio.
The Air Force concluded there was more risk that Boeing's development phase would take longer and be more expensive than Northrop's, the slides said. That included the likelihood of a "relatively lengthy software development phase."
"Little difference exists between" Northrop's "cost and price and the government's probable cost and price" for the development phase, the Air Force said. In contrast, the difference between Boeing and the government's probable costs "are not reasonably explained" for some categories.
The Air Force slides, in assessing the competitor's past performance, said there was "little confidence" in Boeing's program management, whereas Northrop was rated "satisfactory."
Barksdale, in his e-mailed statement, said that problems Boeing had with some international tanker programs and a Navy multimission aircraft were "overly emphasized" and that the Air Force didn't properly consider "lessons learned" by the company in resolving those issues.
Among the "major discriminators" that swayed the Air Force was the Northrop model's larger size. Boeing, in its protest to the Government Accountability Office, said that if the company had been told "the Air Force wanted a large-scale tanker, it could have offered" the bigger 777 aircraft as a base. The GAO has 100 days from the March 11 filing to decide whether the contest was fair.

Boeing can't win tanker appeal on technicalities
By ERIC ROSENBERG
P-I WASHINGTON BUREAU
WASHINGTON -- The Boeing Co.'s push to overturn a lucrative Air Force contract for aerial tankers awarded to an EADS consortium faces a high hurdle at the Government Accountability Office, the investigative branch of Congress, which is weighing Boeing's appeal.
The agency, which has until mid-June to rule on Boeing's complaint, doesn't overturn federal contracts for minor infractions by the government agency that awarded the contract in the first place.
Rather, the GAO looks for more fundamental mistakes. In the tanker case, that is likely to take the form of whether the Air Force gave European Aeronautic Defense and Space Co. and Northrop Grumman Corp. the contract on the basis of the original requirements it set forth in 2007, when it first solicited bids from aircraft manufacturers to build a new fleet of tankers.
When the GAO has upheld previous contractor protests, "it wasn't about i's that weren't dotted and t's not crossed," said Joshua Schwartz, a law professor and co-director of the Government Procurement Law Program at George Washington University.
The GAO acts only when there are major problems, he said. This places a substantial burden of proof on the losing bidder. On the tanker contract, "the Air Force would have to have screwed up, not on just a technicality but in some way that really had some potential to affect the outcome," Schwartz said in an interview.
Alan Chvotkin, a federal acquisition expert with a trade association that represents government contractors, put it this way: A federal agency "simply being wrong about something is not enough for GAO to recommend taking corrective action."
Instead, said Chvotkin, senior vice president at the Arlington, Va.-based Professional Services Council, the GAO "evaluates the agency's contract decision against the criteria the agency said it would evaluate" in picking the winning bid. The GAO checks "to ensure that the agency followed its own priorities."
Boeing has acknowledged the difficulty it faces in getting the GAO to overturn the contract with the EADS team.
"We know it's an uphill battle, no doubt," Mark McGraw, a Boeing vice president, said this week. "It would be very rare for the GAO or anybody to actually overturn a decision."
GAO statistics underscore the difficulty losing contractors face. The agency says 16 percent of protesters won in 2002, 17 percent in 2003, 21 percent in 2004, 23 percent in 2005 and 29 percent in 2006.
Last year, the number of upheld protests dipped to 27 percent.
Although most losing bidders don't win their appeal, "that's not because GAO is covering the posteriors of the executive branch agency, which did a procurement," said Schwartz. "The GAO is quite independent, quite competent and an honest broker."
One of the protests upheld by GAO shows just how fundamental the alleged infraction must be.
In 2006, the Air Force selected Boeing for another top-priority Air Force program, the $15 billion contract to build the Combat Search and Rescue-X helicopter. The losing bidders -- Sikorsky and Lockheed Martin -- protested the Boeing award and charged that the Air Force failed to apply uniform selection standards to all bidders.
The GAO agreed.
In its contract solicitation, the Air Force had told potential contractors to submit bids that included projected long-term maintenance costs.
But the GAO said the Air Force then erred by failing to take into account the projected lower maintenance costs proposed by Sikorsky and Lockheed Martin helicopters.
The Air Force, the GAO found, "departed from its stated evaluation approach." The GAO has directed the Air Force to re-evaluate the bids; another helicopter contract isn't likely to be awarded until later this year.
The Air Force last month rejected the Boeing bid to build the new midair refueling tankers and instead chose a team of Airbus parent EADS and Los Angeles-based Northrop Grumman. The initial program is valued at around $35 billion but could grow to $100 billion if the Air Force places additional orders.
Boeing's entry, the KC-767, was based on a version of its 767 commercial airliner, while the EADS and Northrop Grumman tanker was based on the larger Airbus A330 commercial airliner.
In its protest, Boeing accuses the Air Force of switching airplane size requirements in the middle of the bidding contest. Initially, the service sought bids for a medium-sized tanker but later selected a much larger aircraft, Boeing maintains.
"Boeing carefully tailored its proposal to match the Air Force's stated requirement and provide the plane the Air Force said it wanted -- an agile, efficient, yet highly capable medium-sized tanker," the company said in a summary of its protest, adding that this was the reason it offered a modified 767 for the tanker role.
"Had Boeing known the Air Force was going to give size and capacity such dispositive weight in the evaluation, it would have proposed its larger 777," the summary said.
Boeing maintains that the Air Force "repeatedly made fundamental but often unstated changes to the bid requirements and evaluation process" in an effort to keep the Airbus consortium in the competition.
The Airbus team maintains that it won fair and square with a superior aircraft and denies Boeing's charge that the Air Force stacked the deck in its favor.
"I'm a little bit shocked at the assertion," said Paul Meyer, Northrop Grumman manager of the tanker program.
The GAO rarely recommends that a federal agency redirect a contract award to another company. Typically, if the GAO upholds a protest by a losing bidder, it directs that the agency correct the mistake, reopen the bidding process and re-evaluate the competing bids.
The GAO, which has some 30 lawyers working on contractor protests, typically assigns one lawyer for each case. In order to reach a decision, the lawyer reviews reams of contract documentation supplied by the federal agency and often conducts hearings.
Technically, the GAO's recommendations on protests are advisory only to the federal agency. But it is rare for the agency to disregard the recommendations.

Coast Guard Blogger Fired
Our sympathies go out to Mike McGrath, a contributor to "An Unofficial Coast Guard Blog," who reports being fired from working for one of the Coast Guard's contractors in part for his blogging. McGrath comes from a Coast Guard family -- he has had a 26-year career working for the Coast Guard and a father with a 24-year career. On Coast Guard Report he describes what happened:
Was told that my position would have been downsized anyways within the next few months, my behavior on the blog sites just made it easier to make me the first to go.
I don't mind if someone wants to let me or any other contractor go because they have to reduce headcount, or some other "Business" reason - that makes perfect sense to me and I understand as a contractor that these contracts come and go with the wind - that's the risk we take as contractors and is the nature of our world.
What I take issue with is that CG leaders over-reacted to and I believe misinterpreted some of my blogs and comments - this drove them to handle my departure the way they did. While I won't go into the details, let me say that there are certainly more professional ways of handling a person's departure, rather than the explosive Friday afternoon yelling session with the contractor companies' senior folks via conference call, then having said contractor company send a letter in the mail to let said contractor know he is no longer employed, then firing off a late Friday afternoon email that in essence says go home and wait for said letter - which is exactly the way I interpreted the whole situation - and by the way all without letting said contractor know that any of this was going on.
Did I mention that I just had my performance evals completed within the last 2 weeks, scored perfect all across the board, got a raise (which I will never see) and that there was no indication from anybody that there was anything wrong occurring; no feedback, no counseling, no pointing out of where I might be violating any written policy, nothing - no indication whatsoever. Yeah, now you know why I have such heartburn with all this.
In January, McGrath described being told by his superiors to "back off" on his blogging:
I was sort of encouraged (with some very strong negative overtones) to be careful about posting my personal information and my opinions on these blogs....I just wanted to report that I now understand what it feels like to have that experience; and to state emphatically that I won't be backing down.
McGrath's last blog entry before being fired described his frustrations with an unfinished Coast Guard investigation into an incident in which his son ended up "permanently brain damaged." Another blog entry was critical of efforts to reorganize the Coast Guard. Yet, in his blogging he frequently expressed his love of the Coast Guard and a sincere desire to make it better.
As the world wide web has grown, more and more employees at government agencies and contractors have taken the risk of expressing their opinions and exposing the inner workings of their institutions on blogs as well as on YouTube. Some of these individuals are also whistleblowers who expose corruption or possible harms to the public.
Government agencies and companies are all too happy to fire someone like McGrath in order to send a message to other employees to keep their mouths shut. Left unchallenged, these jack booted thug firings ultimately may help to keep the public in the dark about institutional corruption and risks to the public. Unfortunately, in an Orwellian turn of events, the Supreme Court ruled two years ago that government employees have no free speech rights to discuss their official work.
Other contributors to "An Unofficial Coast Guard Blog" aren't backing down. In fact, they believe that efforts to silence Coast Guard critics are backfiring. Mike McGrath says he's starting to write a book about his experiences with the Coast Guard.
-- Beth Daley

_____________________________________________
Beth Daley, Director of Investigations
Project On Government Oversight
666 11th Street, NW, #900
Washington, DC 20001
Phone 202-347-1122 Fax 202-347-1116 Web http://www.pogo.org

Founded in 1981, the Project On Government Oversight is an independent nonprofit which investigates and exposes corruption and other misconduct in order to achieve a more accountable federal government.

Friends of Texas Medical Board Watch,

Keith E Miller MD, former Chairman of the Texas Medical Board Disciplinary Process Review Committee, was deposed Friday, March 14, 2008, in Center, Texas.

There were stunning revelations. The transcript is being prepared, and it was also videotaped. Dr. Miller claimed not to be able to recall key facts. At one point AAPS
contacted the court and obtained rulings forcing Miller to answer certain questions.

Witnesses recall:

* Miller was actually being paid each month by Blue Cross/Blue Shield as he sat on the TMB and disciplined physicians
* Miller did not recuse himself from any TMB cases, even with physicians who were known to be at odds with BCBS.
* Miller insists that he did not have a conflict of interest that prohibited him from being on the TMB or being Chairman of the TMB Disciplinary Process Review Committee, in spite of his fiduciary interest in BCBS or because of his numerous paid "expert" testimonies for plaintiffs in medical malpractice cases. Some of the doctors he testified against were also disciplined by the TMB. In his letter to Governor Perry, Miller cited a conflict of interest with the Texas Medical Board as the primary reason for his resignation. When letters to the editor appeared in the Center Light & Champion, the only persons who defended him were Roberta Kalafut DO, President of the TMB, and Dee Whittlesey MD, "physician advocate" for BCBS.
* Miller was making up to 20% of his income by serving as an expert for plaintiffs in malpractice cases, while also serving on the TMB and being paid to review charts of physicians contracted with BCBS, as a member of the Texas Medical Advisory Committee for BCBS.
* Miller claimed that he did not discuss his resignation with anyone on the Board, which a judge might find implausible
* Miller repeatedly claimed not to recall key facts, such as whom he spoke with at the TMA, which a judge might find implausible
* Near the end of the deposition, Miller insisted that a physician had killed two patients, even though the malpractice case against that physician was dismissed

Miller and his attorneys refused to answer key questions about TMB Informal Settlement Conferences. AAPS may move to compel answers to those questions.

AAPS is proceeding with the litigation against all members of the Texas Medical Board in federal court.