The integrity of the procurement is at risk
In looking at KBR of late, one has the impression that their all-access pass has been revoked. As evidence of their corporate tendency toward unethical or out-and-out fraudulent practices builds up, they more frequently find themselves on the failed end of bids for the kind of large-scale government contracts they used to just be able to assume a win on. Earlier this year, the GAO denied KBR's protest about their failure win a lucrative LOGCAP IV contract, as GAO indicated that KBR didn't have the right to tell the Army how to move its troops around, nor to charge the Army for not taking direction from KBR. So it appropriately goes.
Now the GAO has released another decision denying KBR's protest against yet more failed LOGCAP IV bids. Here's the story this time:
In late 2008, a contracting officer in the Army emailed program folks at KBR with what he thought was an attachment discussing their past performance issues. He realized immediately, however, that he'd instead emailed proprietary bid comparison information discussing KBR and its major competitors. Recognizing the error, he did the appropriate thing and emailed all recipients at KBR telling them to delete that email without opening it, and without reading the attachment. So far, so good. The contracting officer at the Army then asked KBR to provide sworn statements asserting that they had followed his directions and deleted the information without reading it.
The contracts manager at KBR complied, deleting the email without reading it. The program manager at KBR said he'd complied, but actually forwarded the email to his laptop, where he opened it and looked at the attachment (briefly, according to his later report).
The Army at this point asked for a more detailed explanation, since the statements they'd received from KBR were not sworn affidavits as requested, and now they had the issue of the program manager having seen proprietary information and having lied about doing so. KBR replied with affidavits and a cover letter explaining that no one had read the email (note that this contradicts what Army knew at this point).
Wanting to avoid any hint of impropriety or unfair advantage, Army requested that the program manager at KBR be further isolated from the LOGCAP IV bid process. KBR said they thought this was unnecessary, and refused.
Having already been lied to once by the program manager at KBR, and with the company refusing to carry out the required action to limit potential impropriety, the Army at this point disqualified KBR from the two associated LOGCAP IV bids.
KBR naturally freaked out, sending a letter that said, essentially, "Okay, okay, we've isolated the guy" and "Besides, we didn't really get an advantage here..." (Those are my paraphrases, and clearly not quotes).
The Army told KBR tough luck, and KBR protested to GAO. After evaluating the entire situation, GAO backed Army's decision, giving this final word on the matter:
Under the circumstances here, we cannot find unreasonable the contracting officer's request that, in order to preserve the integrity of the procurement system, the KBR program manager be isolated from these competitions. Nor can we find the agency's subsequent determination that KBR be disqualified from these competitions to be unreasonable, in light of KBR's refusal to isolate its program manager from these competitions when requested to do so by the agency. That is, although KBR complains that the agency's disqualification of KBR from these competitions was unduly severe, the record reflects that this action was taken by the agency only after KBR refused the agency's request to isolate the program manager. Given the circumstances, which include KBR's initial refusal to isolate its LOGCAP IV program manager from these open LOGCAP IV task order solicitations, we find the agency's elimination of KBR's proposals from these task order competitions to be reasonable and within the discretion granted to the contracting officer.
The protest is denied.
For much of the last eight years, KBR has been able to freely flaunt regulations and spit in the face of military officers with the expectation that it would be given a pass, and would continue to win contracts. The patient for this misbehavior seems to be running out, and now that KBR is more often being judged on what it does rather than who it knows, it is beginning to bleed just a little bit more with each failed protest that comes with a clear recounting of its business practices.