[Senate Hearing 112-79]
[From the U.S. Government Printing Office]
S. Hrg. 112-79
THE RESULTS OF THE INVESTIGATION BY THE DEPARTMENT OF DEFENSE AND THE
DEPARTMENT OF THE AIR FORCE INTO THE RELEASE OF PROPRIETARY DATA IN THE
KC-X COMPETITION
=======================================================================
HEARING
before the
COMMITTEE ON ARMED SERVICES
UNITED STATES SENATE
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
__________
JANUARY 27, 2011
__________
Printed for the use of the Committee on Armed Services
Available via the World Wide Web: http://www.fdsys.gov/
__________
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COMMITTEE ON ARMED SERVICES
CARL LEVIN, Michigan, Chairman
JOSEPH I. LIEBERMAN, Connecticut JOHN McCAIN, Arizona
JACK REED, Rhode Island JAMES M. INHOFE, Oklahoma
DANIEL K. AKAKA, Hawaii JEFF SESSIONS, Alabama
E. BENJAMIN NELSON, Nebraska SAXBY CHAMBLISS, Georgia
JIM WEBB, Virginia ROGER F. WICKER, Mississippi
CLAIRE McCASKILL, Missouri SCOTT P. BROWN, Massachusetts
MARK UDALL, Colorado ROB PORTMAN, Ohio
KAY R. HAGAN, North Carolina KELLY AYOTTE, New Hampshire
MARK BEGICH, Alaska SUSAN M. COLLINS, Maine
JOE MANCHIN III, West Virginia LINDSEY GRAHAM, South Carolina
JEANNE SHAHEEN, New Hampshire JOHN CORNYN, Texas
KIRSTEN E. GILLIBRAND, New York DAVID VITTER, Louisiana
RICHARD BLUMENTHAL, Connecticut
Richard D. DeBobes, Staff Director
David M. Morriss, Minority Staff Director
(ii)
?
C O N T E N T S
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CHRONOLOGICAL LIST OF WITNESSES
The Results of the Investigation by the Department of Defense and the
Department of the Air Force into the Release of Proprietary Data in the
KC-X Competition
january 27, 2011
Page
Masiello, Maj. Gen. Wendy M., USAF, Program Executive Officer for
Combat and Mission Support, Office of the Assistant Secretary
of the Air Force for Acquisition............................... 7
Shirley, Steven D., Executive Director, Department of Defense
Cyber Crime Center............................................. 10
(iii)
THE RESULTS OF THE INVESTIGATION BY THE DEPARTMENT OF DEFENSE AND THE
DEPARTMENT OF THE AIR FORCE INTO THE RELEASE OF PROPRIETARY DATA IN THE
KC-X COMPETITION
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THURSDAY, JANUARY 27, 2011
U.S. Senate
Committee on Armed Services
Washington, D.C.
The committee met, pursuant to notice, at 9:33 a.m. in room
SD-G50, Dirksen Senate Office Building, Senator Carl Levin
(chairman) presiding.
Committee members present: Senators Levin, McCaskill,
McCain, Inhofe, Sessions, Graham, Wicker, and Brown.
Committee staff members present: Richard D. DeBobes, staff
director; and Leah C. Brewer, nominations and hearings clerk.
Majority staff members present: Creighton Greene,
professional staff member; Peter K. Levine, general counsel;
and Jason W. Maroney, counsel.
Minority staff members present: Pablo E. Carrillo, minority
investigative counsel; David M. Morriss, minority counsel; and
Christopher J. Paul, professional staff member.
Staff assistants present: Kathleen A. Kulenkampff, Hannah
I. Lloyd, and Brian F. Sebold.
Committee members' assistants present: Tressa Guenov,
assistant to Senator McCaskill; Joanne McLaughlin, assistant to
Senator Manchin; Anthony J. Lazarski, assistant to Senator
Inhofe; T. Finch Fulton, assistant to Senator Sessions; and
Sarah Drake, assistant to Senator Wicker.
OPENING STATEMENT OF SENATOR CARL LEVIN, CHAIRMAN
Chairman Levin. Good morning, everybody.
The committee meets today to address the inadvertent
release of proprietary data in the process of the KC-X tanker
procurement.
We recognize that the Air Force is currently conducting a
source selection in this procurement, and we need to avoid any
action, comment, or answer that might compromise that source
selection. This hearing will focus on, first, the nature of the
information released by the Air Force; second, the steps that
the Air Force took to determine what happened, and to determine
if there was any damage to the fairness and integrity of the
source selection process; and third, any remedial actions taken
by the Air Force.
I would ask both Senators and witnesses to avoid any lines
of inquiry that could compromise the source selection process.
The issue that needs to be addressed is whether the Air
Force releasing proprietary or source-selection-sensitive data
to the competitors during the ongoing third tanker procurement
process has damaged that process.
My understanding of the current situation is as follows:
Boeing and the European Aeronautic Defense and Space Company
(EADS) are competing for the contract to furnish the next
generation strategic refueling contract, called the KC-X, for
the Air Force.
As part of this competition, the Air Force is evaluating
the capability of the competitors' aircraft in a model referred
to as the Integrated Fleet Aerial Refueling Assessment (IFARA).
In this analysis, the Air Force is evaluating potential KC-X
aircraft using several postulated real-world scenarios. In
deriving an IFARA score, the Air Force uses the model to
compare candidate aircraft with the current tanker, the KC-
135R.
As part of the official discussions, within the current
competition, the Air Force intended to share with each
contractor the Air Force IFARA assessment on that contractor's
aircraft, to ensure that there were no substantive
disagreements on the calculations on the score.
In November 2010, personnel working for the Air Force
Program Office inadvertently sent the IFARA data files for the
Boeing offer and the EADS offer to both contractors. After the
error was identified, the Department of Defense (DOD) and the
Air Force investigated the incident and determined that some
IFARA data had been viewed by one of the two contractors. The
Air Force then determined that comparable data should be
released to the other contractor, in the effort to ensure that
the competition could continue on a level playing field, and it
was released.
Now, joining us today are Major General Wendy Masiello,
Program Executive Officer (PEO) for Combat and Mission Support,
Office of the Assistant Secretary of the Air Force for
Acquisition; and Steven Shirley, Executive Director for the DOD
Cyber Crime Center. These witnesses have been selected because
they have a detailed knowledge of issues regarding the specific
subject matter of this hearing.
I want to extend a welcome to our witnesses. Thank you both
for appearing before this committee this morning. I know that
it took some doing to get here, given the snow circumstances.
Over the last month, the staff has met on two occasions
with DOD officials familiar with the release of information and
the Air Force investigation.
Also, I made an offer to the chief executive officer (CEO)
of each of the companies to submit written statements to the
committee addressing these issues, should they choose to do so.
We have received a submission from each of the companies, and
without objection, we will make those two submissions part of
the record at this time.
[The prepared statements of Mr. Muilenburg and Mr. O'Keefe
follow:]
Prepared Statement by Dennis A. Muilenburg
Mr. Chairman, thank you for this opportunity to provide a statement
to the Senate Armed Services Committee regarding the release of
contractor proprietary data in the KC-X competition. I am not in a
position to comment on specific actions taken by another company. I
can, however, provide the facts regarding how Boeing handled the data
it received. In all respects, Boeing's conduct was consistent with the
highest standards of ethically responsible behavior.
On November 1 of last year, Boeing was notified by the
Air Force that a classified Integrated Fleet Aerial Refueling
Assessment (IFARA) package was available for Boeing to receive
from Wright Patterson Air Force Base (WPAFB). Boeing understood
the package contained Boeing's interim IFARA evaluation data
and score. Boeing retrieved the package and brought it to St.
Louis for review and analysis, following strict protocol for
the transport and handling of classified data.
An analyst on the Boeing tanker program received the
IFARA data package from Boeing Security in St. Louis that
evening, and noted there were two disks and a cover letter. The
analyst took the materials to a classified lab for review with
another Boeing analyst. One of the analysts inserted the first
disk into a Boeing classified laptop. The analyst reviewed the
file structure and located the Excel file they believed would
contain the Air Force Fleet Effectiveness Value (FEV) for
Boeing. The analysts opened this file, confirmed it contained
the Boeing KC-767 FEV score, and printed this classified table.
An analyst then copied the contents of this first disk to the
classified laptop hard drive, and removed the first disk from
the computer.
The analyst then inserted the second disk into the
laptop, and reviewed the file structure of that disk more
closely in an attempt to discern what the difference was
between the first and second disks. The analyst then noticed
that the parent folder name of the second started with the
prefix ``K-30B.'' At that point, the Boeing analysts became
concerned that the second disk could potentially contain
competitor data . The analysts immediately removed the second
disk from the laptop drive, and confirmed that the titles on
the first disk did indeed contain references to ``K-67B'' and
the titles on the second disk contained references to ``K-
30B.'' At no point did the Boeing analysts open any files on
the second (``K-30B'') disk, nor did they make any copies or
print outs of the second disk data. Our analysts did not
forward the files or in any other way provide further access to
the data to any other person.
The cover letter, both disks, as well as the
classified laptop used to open them, were all immediately
sealed by security and locked in classified safes, and the
analysts contacted the appropriate Boeing personnel to report
the incident. Boeing notified the Air Force by phone and email
that night, and received instructions the next day to repackage
the materials and return them to WPAFB in Dayton. Boeing
followed this direction, and couriered the materials back to
Dayton that same day (November 2).
On November 8, the Air Force requested that Boeing
also deliver its classified laptop computer to the Defense
Computer Forensics Laboratory in Maryland on November 10.
Boeing complied with this direction.
Boeing's behavior in this instance is emblematic of our conduct
throughout this competition. We have competed fairly and aggressively.
We have not sought extensions of time, we have complied with every
deadline, and we have followed the strictures and procedures
established by the Air Force acquisition authority to the letter. You
can be sure that Boeing will do everything in its power to ensure the
integrity of this competition because of its importance to our USAF
customer and our military men and women that we are honored to serve.
Mr. Chairman, Senator McCain, and members of the committee:
American industry relies on the integrity of the Defense Department's
acquisition processes. Your review of this matter is greatly
appreciated.
______
Prepared Statement by Sean O'Keefe
Chairman Levin, Senator McCain, and members of the committee, I am
pleased to provide a statement to the committee concerning the U.S. Air
Forces' inadvertent release of Integrated Fleet Aerial Refueling
Assessment (IFARA) data in the KC-X tanker procurement. The facts
surrounding this incident, and the responsible actions taken by EADS
North America, are straight forward and deserve to be clearly
understood with full transparency. We are pleased to contribute in any
way to that full understanding.
The constitutional role of Congress as exercised by this committee
is critical, given that it examines issues that affect the capabilities
of our men and women in uniform. I appreciate the thoughtful and
careful manner in which the committee has engaged on the issue of data
disclosure on the KC-X competition. It is my hope that this statement--
and the information we have provided to the committee--will add to your
understanding of what transpired, as well as the care and precision
with which EADS North America personnel dealt with a situation that
they had no part in creating; and concurrently the professionalism of
the U.S. Air Force response to make every effort to preserve the
integrity of the procurement for aerial refueling tankers.
Many members of this committee have considerable awareness of EADS
North America. However, some of you may not. I would like to take a
moment to briefly tell you who we are. EADS North America is the
American Division of a global, publicly-traded defense and aerospace
company whose products contribute daily to the security of the United
States. In addition, as a global aerospace company, EADS is the largest
international customer of U.S. manufactured aerospace components,
purchasing in excess of $11 billion a year in U.S. manufactured
components--many from your respective States--that are integrated into
our final products and platforms for export around the globe.
We are proud to be a major prime contractor to the Department of
the Army today, providing the Lakota Light Utility Helicopter which is
produced in Columbus, MS, and today is operational in the United
States, Europe, and the Pacific. Additionally, we are the largest
platform provider to the Department of Homeland Security, and we have a
substantial and responsible history as a supplier to other departments
and agencies of the U.S. Federal Government.
As a company, EADS understands and embraces our obligations as a
responsible provider of world class aerospace products to the U.S.
military, as well as other government agencies and a myriad of
commercial customers. We are a global corporation dedicated to bringing
the best aerospace products to customers across the globe--just like
our primary competitor, the Boeing Company. For the U.S. market, that
means not just selling our exceptional products here for a good value,
but building them here in the United States, and creating jobs across
this country and participating constructively in the communities in
which our employees live.
The provision of capability and value to our customers is our
foundation. As a corporate partner to the U.S. Government, our guiding
tenet is the operation of our business enterprise in a manner that
upholds the highest ethical standards. Those standards include
protecting the integrity of the procurement process. When mistakes are
made, we exercise rigorous care to safeguard competition sensitive or
proprietary information--whether that information concerns us or our
competitors. In the particular matter under discussion today related to
the data disclosure on the U.S. Air Force aerial refueling tanker
aircraft competition, EADS North America acted correctly, quickly, and
responsibly in addressing an incident that was not of our making.
Clearly, it would have been preferable that the data disclosure by
the U.S. Air Force had not happened. However, after a full and thorough
review of EADS North America's actions, I can tell you with high
confidence that our actions following awareness of the disclosure were
timely, responsible and appropriate.
The facts surrounding this issue are clear. EADS North America
received two data discs with security documentation from the U.S. Air
Force. After proper in-processing, a cleared employee inserted and
opened the first disc, reviewed and verified the EADS North America
data, and closed it. He then inserted the second disc, and opened the
first file on the disc. On seeing that the contents of the first page
of that file contained competitor markings he closed the disc, removed
it from the computer, and immediately secured it under appropriate
security procedures. The total time that the file was open was less
than 15 seconds.
Once the data disclosure was discovered, our employee immediately
followed established protocols to ensure that the disclosure was
contained, that the media on which the data were contained was
controlled, and that no communication of the content of the disclosed
data occurred. All of this was done in line with all statutory and
regulatory guidelines, and the highest standards of business conduct.
Specifically, on the night of the disclosure incident, EADS North
America secured the competitive data, under two-person control, using
the Defense Department approved security facility at EADS North
America. We immediately reported the disclosure to the U.S. Air Force
Contracting Officer, and carefully followed the spirit and letter of
subsequent government direction. This included the isolation of the
data and recusal of the individual who discovered the disclosure, as
well as the prompt return of the data and the processing equipment to
the U.S. Air Force. The employee who opened the discs was immediately
instructed that he must not disclose any information regarding the
content of the file he saw on the second disc (one page), and was
assigned to administrative duties separate from the KC-45 program,
pending the outcome of an independent investigation, and the
investigation and determination by the U.S. Air Force.
Recognizing the importance of this unfortunate customer mistake in
sending competitor data, I immediately initiated an independent
investigation by outside counsel to review and document the events and
actions taken by EADS North America to manage the situation. This
investigation was thorough and comprehensive and its conclusions are
the same as those reached by the U.S. Air Force's own assessment and
the government's computer forensic analysis. We provided our complete
and prompt cooperation with every aspect of the U.S. Air Force
investigation, including providing the report of our internal
investigation to the U.S. Air Force. The committee has received the
same report of investigation of the events relating to the November 1,
2010 incident. We have voluntarily made our findings and reports
available to the committee, as requested. We did this without making
public statements that might exacerbate matters or adversely affect the
course of this important procurement.
Unfortunately, it appears that some are attempting to exploit the
U.S. Air Force's inadvertent error by speculating on events which are
not in evidence. Most disconcerting is the false assertion that EADS
North America held for a month the competitor data incorrectly sent to
us. I can assure the committee that this allegation is simply untrue
and is substantively contradicted by the government's investigation and
detailed forensic analysis.
EADS North America has a single goal in the KC-X competition--to
ensure that the information necessary to support this competitive
procurement is objectively provided to the U.S. Air Force such that a
fair and timely decision can be made on this critical military system.
Our actions over the more than 5 years of effort in this competition
have fully demonstrated our commitment to that objective. There is no
place in this competition for anything other than full transparency
into the process leading to a fair outcome. The hearing by the
committee today can advance that objective by affirming through an
examination of known facts that the unfortunate misstep of sending
competitive information to both contractors was managed in good faith
and full compliance by EADS North America and the U.S. Air Force. I
stand by the actions taken by this company and our employees as fully
compliant and responsible in accordance with the information provided
as requested by the committee.
We are prepared to answer any question this committee may have
regarding this data disclosure matter. We wish the committee well in
your important work in support of our Nation's security and of our men
and women in uniform.
Chairman Levin. We appreciate both companies' positive
approach to this committee inquiry, and both of the companies'
cooperation with us.
Senator McCain.
STATEMENT OF SENATOR JOHN McCAIN
Senator McCain. Thank you, Mr. Chairman.
I thank the witnesses for their attendance and being here
this morning.
One of the primary duties of this committee is to engage in
oversight of DOD spending and programs. While I'm unfailing in
my support for aggressive oversight by this committee over
major Defense acquisition programs, and I acknowledge that it's
the right and responsibility of the Chairman to schedule
hearings as he deems fit and appropriate to ensure that the
committee exercise its oversight responsibilities effectively,
I approach today's hearing with a fair bit of concern, and even
a greater amount of skepticism, that this hearing will be
beneficial to our job of oversight.
Unfortunately, this hearing appears to be designed to
produce little new information about the pending award of the
Air Force's KC-X tanker competition.
As we all know, the competition for the Air Force's new
aerial refueling tanker has been beset by problems in
acquisition irregularities for years. After considerable effort
to ensure the current competition process is as error-free and
clean as possible, in November the Air Force inadvertently, and
incredibly, sent data related to the competition to each of the
respective bidders, that they should not have had.
The natural outcome of this mistake is to ask, what
difference, if any, did this mistake make to the competition?
While I think the urge to dive into that question is
understandable, this long, drawn-out process is nearing its
end, and a final announcement of the Air Force's decision will
be made soon.
To the extent that November's mistake could be argued to
have an impact on the outcome, that seems to me to be an issue
more appropriately addressed after the competition has run its
course and a winner has been announced, not just weeks before
the process draws to a conclusion.
While this committee should continue to exercise aggressive
oversight into the tanker award processes, the witnesses here
today have little ability to shed real light on the facts that
eventually need to be examined on this matter. Indeed, the
tanker program has been delayed for more than a decade and is
expected to be worth approximately $30 billion. With that much
at stake, hearings on this topic should be designed to allow
the Air Force to speed the delivery of the tanker, that it so
badly needs, in the most efficient, cost-effective manner
possible.
Everyone wants to ensure that this competition is fair and
above board, and that no party gains an unwarranted advantage.
We know corrective actions were taken, an effort was made to
assess damage and set things right, opinions were formed about
what the impact was and whether it could be overcome.
With these fundamental questions in mind and an intent to
exercise restraint as we involve ourselves in this issue, I
look forward to the testimony of the witnesses.
I also know that the Chairman intends to publicly release,
today, documents that we received for this hearing. I think
this is a bad idea. I think we could wait until just a few
weeks from now, when the final decision is made, and then make
all of these documents public, and I understand DOD ``doesn't
object to the committee's release of these documents.'' Given
all of the controversy, all of the legal challenges, and all of
the delays of over a decade, why wouldn't we want to just wait
a few weeks before we would release that information, which
could cause further disruption to the competition?
Mr. Chairman, it is your right, as chairman, to release
those documents. I don't think that it does any good at this
time, and it could be disruptive. I say that as a person who
has been very much an advocate of total transparency and
knowledge, not only shared by Members of Congress, but by the
American people.
So, I thank the witnesses for being here today.
I hope that in February we can finally have a final
resolution and selection of a tanker that's badly needed by the
U.S. Air Force, after nearly a decade of stories of corruption,
abuse, mismanagement, and now this latest fiasco of releasing
relevant documents to the contractors, a rather incredible
happenstance, in this long odyssey and saga of mismanagement
and, in some cases, corruption surrounding the awarding of the
contract for this tanker.
I thank you, Mr. Chairman.
Chairman Levin. Thank you very much, Senator McCain.
General Masiello.
STATEMENT OF MAJ. GEN. WENDY M. MASIELLO, USAF, PROGRAM
EXECUTIVE OFFICER FOR COMBAT AND MISSION SUPPORT, OFFICE OF THE
ASSISTANT SECRETARY OF THE AIR FORCE FOR ACQUISITION
General Masiello. Mr. Chairman, Senator McCain, and members
of the committee, thank you for opportunity to discuss the
events surrounding an inadvertent disclosure of information
related to the KC-X program.
I should make it clear at the outset that neither I nor my
fellow witness, Mr. Shirley, are affiliated with the KC-X
source selection, and thus we cannot address nor speculate on
matters beyond the scope of today's hearing.
As a senior Air Force military officer with contracting
experience, as well as experience in numerous source
selections, I've been asked to review the redacted record of
the incident, and the extent of the Air Force's response, so
that I could appear today to address the process that was
followed and how the Air Force's actions maintained the
integrity of the source selection process.
I know that committee members are aware that the Air Force
is in the midst of the source selection and will appreciate
that my testimony today will be limited to the specifics of
this event and my analysis of the actions taken.
The Air Force has been and remains committed to a fair,
open, and transparent KC-X source selection. I understand the
Air Force has provided all committee-requested documents
properly redacted of proprietary and source selection sensitive
information.
These are the summary statements by the procuring
contracting officer and the head of Air Force contracting
activity regarding the Procurement Integrity Act; the Office of
the Secretary of Defense (OSD) Independent Review Team's (IRT)
report; statements from both companies, including signed CEO
certification letters; and the summary statement of the
classified Defense Computer Forensics Report.
Before responding to your questions, let me provide this
summary of where the Air Force believes the record stands
today:
First, the Air Force determined that the error was
unintentional and that the actions of the individuals, both
government and offerors, did not constitute a violation of the
Procurement Integrity Act.
Second, through the statements offered by the employees who
handled or viewed the disks from both companies, certified in
writing by both company CEOs, and other means which I'll
address in a moment, the Air Force believes that the
information exposed to one offeror's employee was limited to
one screen of summary data related to the government's IFARA
data. None of the information on that page was proprietary, and
as has been previously stated publicly, there was no pricing
data anywhere on the disks. The summary page, an Excel
spreadsheet, was open on the screen for a matter of seconds
before it was closed when the company employee realized the
mistake. Both companies, upon realizing the error, immediately
secured the disks in safes and contacted the Program Office.
The Program Office immediately directed and received all of the
disks the next day.
The company employee who viewed the single screen shot was
reassigned to an administrative position, and did not rejoin
the company's proposal preparation team until after the
leveling of the playing field, which I'll address momentarily.
Third, at the direction of the source selection authority
and procuring contracting officer, an independent review was
conducted by personnel from the OSD IRT as to the facts and
circumstances regarding the incident. The IRT also made
recommendations to help prevent future occurrences.
Fourth, as a further level of verification, the Air Force
requested and both companies cooperated by providing the
computers that their competitors' disks were inserted into.
Using the Defense Computer Forensics Laboratory, the Air Force
was able to verify that the record of the disks and files
accessed was consistent with the statements provided by both
companies and certified by their CEOs.
Fifth, following the investigation, in order to ensure a
level playing field, both offerors were presented with the same
screen shots of each other's information. Further, since the
Air Force was still at a stage where offerors could continue to
update their proposals, the procuring contracting officer made
it clear that such updates could continue. Consistent with the
Air Force's efforts to maintain transparency, both offerors
received the opportunity to review the forensic analysis of
their respective computers.
Sixth, I am informed by the Program Office that the IFARA
summary scores shared with both offerors were interim scores
and were not the final scores that will be used in the
evaluation. Further, both offerors will have the opportunity to
provide a final proposal revision, as is standard. No offeror
was impaired from continuing to improve its proposal.
Seventh, the two individuals directly responsible for the
packaging and mailing of the information to the companies were
not only removed from the program, but no longer perform any
duties on programs associated with the Aeronautical Systems
Center. Two other individuals, tangentially involved, were
counseled.
Eighth, all recommendations from the OSD IRT to prevent
recurrence have been adopted. Transmittal of any classified
material to a contract will be accompanied by a letter, not
just the Air Force Form 310, signed by an appropriate official.
Descriptions of the material being transferred must match both
the transmittal letter and the Form 310. The transmittal letter
and the Air Force Form 310 must both be reviewed by the
signatory of the transmittal letter and an appropriate security
official. Classified material to be transmitted must be
delivered to the security office in a separate clearly marked
package to identify the recipient of the material for each
package, ensure individuals with knowledge of both the content
of the material and the purpose of the transfer be involved
with the preparation and packaging of the information, and
personally execute the transfer. Additional measures were taken
to include supervision oversight and two-person rules that
involve senior program and contracting officer positions to
personally verify and validate contents of packages against
transmittal letters and inventory forms.
Finally, while the Air Force regrets that the incident
occurred, Air Force leadership is satisfied that both companies
responded to the incident correctly and professionally.
After reviewing the same documents presented to the
committee, it is my opinion that the actions taken by the
Program Office have ensured a level playing field.
I'd like to thank the committee for your continued support
of our men and women in uniform as we await the outcome of the
source selection.
[The prepared statement of General Masiello follows:]
Prepared Statement by Maj. Gen. Wendy Masiello, USAF
Mr. Chairman, Senator McCain, and members of the committee thank
you for the opportunity to discuss the events surrounding an
inadvertent disclosure of information related to the KC-X Program. I
should make it clear at the outset that neither I nor my fellow
witness, Mr. Shirley, are affiliated with the KC-X Source Selection and
thus we cannot address, nor speculate, on matters beyond the scope of
today's hearing. As the senior Air Force military officer with
contracting experience, as well as experience in numerous source
selections, I have been asked to review the redacted record of the
incident, and the extent of the Air Force's response, so that I could
appear today to address the process that was followed and how the Air
Force's actions maintained the integrity of the Source Selection
process. I know that committee members are aware that the Air Force is
in the midst of the Source Selection and will appreciate that my
testimony today will be limited to the specifics of this event and my
analysis of the actions taken. The Air Force has been and remains
committed to a fair, open and transparent KC-X source selection. I
understand the Department has provided all committee requested
documents, properly redacted of proprietary and source selection
sensitive information. These are:
The summary statements by the Procuring Contracting
Officer and the Head of Air Force Contracting Activity
regarding the Procurement Integrity Act;
The Office of the Secretary of Defense (OSD)
Independent Review Team's report;
Statements from both companies, including signed,
Chief Executive Officer (CEO) certification letters; and,
The summary statement of the classified, Defense
Computer Forensics report.
Before responding to your questions, let me provide this summary of
where the Air Force believes the record stands today.
First, the Air Force determined that the error was unintentional
and that the actions of the individuals, both government and offerors,
did not constitute a violation of the Procurement Integrity Act.
Second, through the statements offered by the employees who handled
or viewed the disks from both companies, certified in writing by both
company CEOs, and other means which I'll address in a moment, the Air
Force believes that the information exposed to one offeror's employee
was limited to one screen of summary data related to the government's
Integrated Fleet Aerial Refueling Assessment (IFARA) data. None of the
information on that page was Proprietary, and as has been previously
stated, there was no pricing data anywhere on the disks. The summary
page, an Excel spreadsheet, was open on the screen for a matter of
seconds before it was closed when the company employee realized the
mistake. Both companies, upon realizing the error, immediately secured
the disks in safes and contacted the Program Office. The Program Office
immediately directed and received all of the disks the next day. The
company employee who viewed the single screen shot was reassigned to an
administrative position, and did not rejoin the company's proposal
preparation team until after the leveling of the playing field, which
I'll address momentarily.
Third, at the direction of the Source Selection Authority and
Procuring Contracting Officer, an Independent Review was conducted by
personnel from the OSD Independent Review Team as to the facts and
circumstances regarding the incident. The Review Team also made
recommendations to help prevent future occurrences.
Fourth, as a further level of verification, the Air Force requested
and both companies cooperated by providing the computers that their
competitor's disks were inserted into. Utilizing the Defense Computer
Forensics Laboratory the Air Force was able to verify that the record
of the disks and files accessed was consistent with the statements
provided by both companies and certified by their CEOs.
Fifth, following the investigation, in order to ensure a level
playing field, both offerors were presented with the same screen shots
of each others' information. Further, since the Air Force was still at
a stage where offerors could continue to update their proposals, the
Procuring Contracting Officer made it clear that such updates could
continue. Consistent with the Air Force's efforts to maintain
transparency both offerors received the opportunity to review the
forensic analysis of their respective computers.
Sixth, I am informed by the Program Office that the IFARA summary
scores shared with both offerors were interim scores, and were not the
final scores that will be used in the evaluation. Further, both
offerors will have the opportunity to provide a Final Proposal
Revision, as is standard. No offeror was impaired from continuing to
improve its proposal.
Seventh, the two individuals directly responsible for the packaging
and mailing of the information to the companies were not only removed
from the program, but no longer perform any duties on programs
associated with the Aeronautical Systems Center. Two other individuals,
tangentially involved, were counseled.
Eighth, all recommendations from the OSD Independent Review Team to
prevent recurrence have been adopted.
Transmittal of any classified material to a contract
will be accompanied by a letter, not just the Air Force 310
``Document Receipt and Destruction Certificate'', signed by an
appropriate official.
Descriptions of the material being transferred must
match both the Transmittal Letter and the Form 310.
The Transmittal Letter and the AF Form 310 must both
be reviewed by the signatory of the Transmittal Letter and an
appropriate security official.
Classified material to be transmitted must be
delivered to the security office in a separate clearly marked
package to identify the recipient of the material for each
package.
Ensure individuals with knowledge of both the content
of the material and the purpose of the transfer be involved
with the preparation and packaging of the information and
personally execute the transfer.
Additional measures were taken to include increased supervision
oversight and two-person rules that involve senior Program and
Contracting Officer personnel to personally verify and validate
contents of packages against transmittal letters and inventory forms.
Finally, while the Department regrets that the incident occurred,
Department leadership is satisfied that both companies responded to the
incident correctly and professionally.
After reviewing the same documents presented to the committee, it
is my opinion that the actions taken by the program office have ensured
a level playing field. I'd like to thank the committee for your
continued support of our men and women in uniform as we await the
outcome of this source selection.
Chairman Levin. General, thank you so much.
Mr. Shirley.
STATEMENT OF STEVEN D. SHIRLEY, EXECUTIVE DIRECTOR, DEPARTMENT
OF DEFENSE CYBER CRIME CENTER
Mr. Shirley. Good morning, Senator.
I have no opening statement, but I am present, as a
technical representative, to answer questions about the
forensic process, if required.
Chairman Levin. Okay. Thank you.
Thank you, both, very much for being here and for your
service.
Let's try an 8-minute first round.
General, let me ask you this question first. Can you tell
us, specifically, what data from each contractor has been
shared with the other contractor as a result of the incident?
You talked about a screen shot, for instance. Be much more
precise as to what was seen and what then was shared.
General Masiello. Senator, from my observation and my
reading the documents that are presented here, it was a screen
shot of IFARA data, which was about a spreadsheet. It appeared
to have 10 lines of information. That screenshot was the IFARA
data analysis, the Air Force's analysis of their individual
data. That's all I know about what the content or the details
are.
Chairman Levin. It was one page, is that all?
General Masiello. One page.
Chairman Levin. What is a screenshot? Is that a page?
General Masiello. Yes, sir. When it pops up onto your
computer and it has a spreadsheet of the information, that
instant page on the computer screen, and it's a picture of that
taken.
Chairman Levin. All right.
General Masiello. So, there's nothing that drills down
below that screenshot.
Chairman Levin. All right. One image of the screen, you
determined, for how long?
General Masiello. However long it presented. But the fact
is a copy of that, for each offer, was swapped with the
offerors.
Chairman Levin. That one page.
General Masiello. Correct.
Chairman Levin. That one page alone.
General Masiello. Yes, sir.
Chairman Levin. Now, have you determined how long that
screen was opened?
Mr. Shirley. Sir, based on the forensics of the media
provided by the company, we think that it was viewed on the
order of several minutes. That's based on statements from the
company. But, the computer was powered for a longer period.
Chairman Levin. Where was the 15-seconds figure? Where did
that come from?
General Masiello. Sir, that was the person's estimate of
how much time they viewed it, that they then prepared and
signed a statement certifying to that, which was subsequently
certified by the CEO of the company.
Chairman Levin. All right. You submitted those documents
that you outlined to us and we have received assurance from the
Air Force that there's no objection to the committee's decision
to do so, if we determine that it's appropriate to do so.
General Masiello. That's my understanding, sir.
Chairman Levin. All right.
Is there objection to those documents being made part of
the record and being released?
General Masiello. Not that I'm aware of, sir.
Chairman Levin. Hearing none, that is the action the
committee will take.
[The information referred to follows:]
[GRAPHIC(S)] [NOT AVAILABLE IN TIFF FORMAT]
[GRAPHIC(S)] [NOT AVAILABLE IN TIFF FORMAT]
[GRAPHIC(S)] [NOT AVAILABLE IN TIFF FORMAT]
[GRAPHIC(S)] [NOT AVAILABLE IN TIFF FORMAT]
Chairman Levin. You indicated that that information was
nonproprietary information, is that correct?
General Masiello. Yes, sir.
Chairman Levin. Would the availability of that information
to one of the competitors, but not the other, be advantageous?
If so, is that the reason why you decided to attempt to level
the playing field by swapping the information, so that both
companies would have the assessment of the other company?
General Masiello. Sir, I can't tell you whether it was that
important or not, because I don't know. I'm not privy to the
KC-X specifics. But, whether it was or wasn't, there was, at
minimum, a perception, so the government chose to provide
copies to both contractors.
Chairman Levin. Both companies.
General Masiello. Yes, sir.
Chairman Levin. I presume it's the EADS employee that we're
talking about; how long was it, after that mistake was noticed
by that employee, did EADS close it up and get it back to the
government?
General Masiello. What I read is that they immediately
stopped looking at it, and, because they were in a secure
environment, needed to go find someone to partner with them to
close it all down.
Chairman Levin. Right.
General Masiello. It was immediate. They wasted no time
shutting it down and securing the documentation and the disks
in a file that was signed by security reviewers, as well.
Chairman Levin. All right. The other company, Boeing, also
caught the mistake. How long did it take them to close up?
General Masiello. It was as instantaneous as what I read
about in the EADS testimony.
Chairman Levin. All right. Those documents that you've
referred to that contain that chronology and that
certification--there were four of them that you made reference
to in your opening statement--are now part of the record and
people can look at that chronology and determine how many
minutes and how many seconds it was, after the mistake was
noticed, that each company locked up the disks, and then got
them back to the government, is that correct?
General Masiello. Yes, sir.
Chairman Levin. That information is in those documents, now
available publicly.
General Masiello. Yes, it is.
Chairman Levin. You're a forensic expert, Mr. Shirley, and
you've told us how confident you are. Let me ask you this
question, your conclusion, or the Department's conclusion, as
to what data was viewed and for how long, is that a high level
of confidence?
Mr. Shirley. Yes, sir, Senator. If I might describe a
little bit about the process to give you the context.
DOD Cyber Crime Center has, as part of it, the Defense
Computer Forensics Lab. It's manned with about 110 people,
today. It operates as an accredited lab, certified by an
external entity; in this case, the American Society for Crime
Lab Directors and their lab accreditation board. What that
process does is validate that we have a reliable, valid,
repeatable process, that we have people who are certified and
professionally qualified to perform the duties in question.
They're subject to periodic review and testing in that regard
as a condition of the lab retaining its accreditation.
When we receive this data, we essentially treated it in the
same manner as we would treat an inadvertent disclosure of
classified information in a sensitive program. So, we assigned,
as a forensic examiner, one of our most capable subject matter
experts. He is the forensic expert that processed this data.
He's been qualified in court about 13 times. So, we have a very
high level of confidence that the forensic findings validated
the representations by each company.
Chairman Levin. Very specifically, the representations, in
the case of Boeing, were that they saw the mistake and did not
open the page or read the page. In the case of EADS, the
representation was that the same page was inadvertently opened,
the person who saw it, saw that one page. You indicated this
morning, apparently, because of personal conversations with
that person, that it may have been a matter of minutes, but
according to the documents, which are now part of the record,
that was for 15 seconds. In either event, you've concluded it
was a matter of some minutes?
Mr. Shirley. Yes, sir. A very short time.
Chairman Levin. Okay. That person immediately closed that
page and got that material back to the Air Force, is that
correct?
Mr. Shirley. That's correct, sir.
Chairman Levin. You're confident that the facts are that
was the only page which was opened up by that person?
Mr. Shirley. Yes, sir.
Chairman Levin. Based on your forensic capabilities.
Mr. Shirley. That's correct, Senator.
Chairman Levin. Okay.
Thank you very much.
Senator Inhofe.
Senator Inhofe. Thank you, Mr. Chairman.
I won't need my full 8 minutes; I had a chance to talk to
both witnesses beforehand.
In your position, are you able to say what percentage of
the bid would this represent?
General Masiello. Sir, I have no insight into what
percentage that the IFARA data represents for the whole KC-X
decision process.
Senator Inhofe. The final bid, I think, is sometime just in
the next few weeks. It's coming up. In your opinion, from what
you do know, would this impact the final bid?
General Masiello. Sir, I don't have a sense for how much it
does or if it does affect the final bid. All I know is that the
contractors have the opportunity to adjust their proposals any
way they see fit over the next remaining period, whatever that
might be, before their final proposal revisions are made.
Senator Inhofe. But, however important or unimportant this
information is, since I don't know and you're not in a position
to know, has any thought been given to eliminate this IFARA
element in the final bid process?
General Masiello. Sir, I couldn't confirm whether or not
that would be the case. It would probably be something that a
procuring contracting officer (PCO) would consider when they
made the decision how to address the inadvertent release.
Senator Inhofe. As a member of this committee, I would like
to know, if it's appropriate to know, whether or not this
should be included. It bothers me when something is disclosed
like this, and I don't know how significant it is to the whole
bid, but I feel that we should know.
General Masiello. Yes, sir.
Senator Inhofe. All right.
Thank you. I don't have anything else, Mr. Chairman.
Chairman Levin. Thank you very much, Senator Inhofe.
Senator McCaskill.
Senator McCaskill. Let me just say for the record that this
is a case study of incompetence at contract competition, this
whole debacle from beginning to this very moment. Contract
competition for something like this has to be a core
competency.
I want to know, in this instance, what punitive actions
have been taken. We can call it an accident, but it's
incompetence. So, what punitive actions have been taken against
the person who made the mistake?
General Masiello. Ma'am, from what I read in the documents,
the two people who were involved in making the mistake are no
longer employed at Aeronautical Systems Center.
Senator McCaskill. So, they were fired?
General Masiello. Yes, ma'am, from that particular program,
and they have been moved to another program.
Senator McCaskill. Where have they been moved?
General Masiello. Ma'am, I don't know.
Senator McCaskill. I would like to know that.
General Masiello. Yes, ma'am.
Senator McCaskill. I would like to know where they are. I
would like to know if they're still making the same amount of
money. I would like to know if they're going to resurface later
in another position of responsibility.
General Masiello. Yes, ma'am.
[The information referred to follows:]
The two individuals were removed from the KC-X program after an
independent inquiry into the circumstances of the unauthorized
disclosure. These individuals, both of whom were then support
contractor employees, where immediately moved to their employer's
administrative overhead. At the time of the disclosure, one of the
individuals was a Senior Level Security Specialist and the other was a
Contract Support Specialist. The security specialist subsequently was
reassigned to a staff position, not supporting any Aeronautical Systems
Center acquisition program of record, as a Journeyman Level Security
Specialist with a substantial pay cut (believed to be roughly 30
percent). The contract support specialist subsequently accepted a Civil
Service position as a GS-12 Acquisition Program Manager at the Air
Force Security Assistance Center at a substantial pay cut (believed to
be roughly 30 percent).
Senator McCaskill. I have complimented Secretary Gates
because he has provided accountability at the top level in many
instances where we have had problems. But, I just think this is
beyond the pale.
There are so many things about this that are unusual. Let
me start with this. If you can state for the record--and if you
can't, I would like this answer from someone else within the
military--isn't it correct that it is very unusual for Boeing
to file a protest after a competition?
General Masiello. Ma'am, I couldn't answer that. I've had
different experiences.
Senator McCaskill. That's a question I would like for the
record. I would like to know, from DOD's perspective, whether
or not it is unusual for Boeing to file a complaint and whether
or not it is unusual that all nine bases on which they filed
the complaint were all sustained at the Government
Accountability Office (GAO).
[The information referred to follows:]
Like most major defense contractors, Boeing does not have a history
of being a frequent protester to the Government Accountability Office
(GAO) or to the Court of Federal Claims. With regard to Boeing's
protest of the 2008 KC-X source selection, while GAO did sustain the
protest on eight separate grounds, there were other issues in
contention on which GAO either found for the government or did not
reach a final decision.
Senator McCaskill. I'm confused about the screen. EADS
said, originally, that they didn't look at the data. Is that
correct?
General Masiello. No, ma'am, they did not say that.
Senator McCaskill. They said they looked at it for a very
brief period of time.
General Masiello. They looked at the screen shot of the
spreadsheet. They admitted to that.
Senator McCaskill. Okay.
General Masiello. That's what made them nervous. They
realized that they shouldn't be looking at that.
Senator McCaskill. Okay. I'm confused, though. It appears
to me, from looking at the information, that they originally
said they looked at it a very short period of time. The
forensics indicated that may not be true, that they might have
looked at it longer than they originally said they looked at
it. Is that correct, Mr. Shirley?
Mr. Shirley. Senator, what we were able to determine is
that the file was opened for a fairly short period of time. The
computer was powered a bit longer. So, in essence, the
statement by the employee, we thought, was consistent with what
we saw in the digital media.
Senator McCaskill. Why is it relevant that the computer was
on longer? Why do you even mention the computer was powered
longer?
Mr. Shirley. When we perform an exam, we look at the media
at a number of different levels. One of the things that's
associated with the computer being in a powered state is
there's a feature called clock time that tells you how long the
computer's in operation and what files may be manipulated while
it's in operation. So, it was part of the context of trying to
validate the employee's statement against what we saw on the
computer.
Senator McCaskill. So, you are testifying today that you
believe that the screen was only viewed for the same amount of
time that EADS had represented that it had been viewed.
Mr. Shirley. Roughly. Yes, ma'am.
Senator McCaskill. My sense is that these are not the right
witnesses to answer this question. To follow up on what Senator
Inhofe said, given this controversy, should IFARA be used and
retained in the final evaluation process now?
General Masiello. Ma'am, it's not for me to judge. The PCO
on the head of contracting activity determined that it was
still appropriate to leave in the competition.
Senator McCaskill. We will compose another question for the
record to get to those individuals, to get other rationale for
that.
[The information referred to follows:]
Yes. The Integrated Fleet Aerial Refueling Assessment (IFARA)
uniquely measures the integrated capability of a fleet of tankers in
wartime scenarios. Elimination of IFARA could result in significant
operational capability being eliminated by all offerors. The Air Force
believes the actions taken level the playing field. Further, all
offerors equally had several opportunities to update any part of their
proposal after the playing field was leveled.
Senator McCaskill. Finally, I know that these are probably
not the right witnesses, but it's my understanding that DOD has
taken the position that the World Trade Organization (WTO)
rulings are not relevant to their decision. I would like to
know where in the Federal Acquisition Regulation (FAR) that is
prohibited. If it's not a level playing field, due to subsidies
by other countries, common sense tells me, from the Midwest,
that if somebody has their finger on the scale, in terms of
subsidies they get from their government, that it's not a level
playing field. I am trying to get my arms around the notion
that that's not relevant. If either of you can speak to that,
that would be terrific; if not, we'll try to track down the
right person to get the answer from. Because I don't believe
there's anything in the FAR that prohibits that from being
considered.
General Masiello. I'll defer to DOD on that, ma'am.
[The information referred to follows:]
The Department of Defense has taken the necessary steps to protect
the interests of the taxpayer and the warfighter. The World Trade
Organization (WTO) matters in the large civil aircraft disputes are
issues between the United States and the European Union. It would be
inappropriate for DOD to take any action that could impair the U.S.
Trade Representative's ability to appropriately represent the interest
of the United States before the WTO. The Government Accountability
Office (GAO) has consistently held that there is no requirement that an
agency consider foreign government subsidies in evaluation of
proposals. According to these GAO decisions, the Buy American Act is
the proper method for taking these sorts of concerns into consideration
in a source selection. The KC-X evaluation will consider, as
appropriate, the Buy American Act.
Senator McCaskill. Okay.
I understand the limitations we have, Mr. Chairman, in
terms of what we can ask, since this is an ongoing process.
But, some of these are writ large policy discussions that I
really think the Senate has to come to grips with.
I mean, we have a farm field in Alabama and a company
that's receiving tens upon billions of dollars of subsidies
from foreign governments. Obviously, this process began with
bad acting on the part of the company that I think, from where
I sit, is better equipped to handle this.
But, having said that the notion that we are not going to
take into account, in light of everything that's going on in
this country, that we have foreign nations that are subsidizing
companies and that's not relevant to our competition, just
doesn't make sense to me. I would like us to get to that policy
question in these hearings, if at all possible.
I thank you, Mr. Chairman.
Chairman Levin. Senator McCaskill, I think the purpose of
this hearing is set forth, which is to see what happened here,
specifically, and what was done to attempt to remedy it. The
broader questions which you raise are appropriate in a
different forum for that to be argued or for a different time.
But, these witnesses, in all fairness to them, are not called
for that purpose.
Senator McCaskill. I certainly understand. I don't mean to
be in any way critical of these witnesses, because they're not
prepared to handle these questions. But, they're on my mind and
I needed to express them.
Chairman Levin. Which is your right.
Senator McCaskill. Thank you.
Chairman Levin. Thank you very much.
Senator Sessions.
Senator Sessions. Thank you, Mr. Chairman.
I would just like to say, first, that the Air Force did
start off with this process in a very, very unfortunate way.
People from both the Boeing Company and the Air Force went to
jail. Senator McCain smelled a rat early on. This committee was
the one committee that wasn't really consulted in how that
original sole-source contract was awarded. Senator McCain,
supported by Senator Levin and Senator John Warner, challenged
the situation.
What we decided to do was to have a competition. It was the
right decision to do, and it saved $7 billion. I remember
declaring Senator McCain to be the $7 billion man; he saved the
taxpayers $7 billion as a result of having a competition in
this process.
A fair, objective competition is what we need and what we
have committed to as a committee, and as a Congress. Now, on
the eve of this final decision, we have people with political
interest and local interest trying to destabilize the process.
I just am not happy about that. I wish it had not happened.
I understand how important it is, because it would mean a
lot for my State, just like it would mean a lot for other
States if it would go another way. But, we have to be sure that
we're not doing anything that says that we expect the Air Force
to do anything other than what we have directed them to do. The
question of subsidies and all of those matters have been
discussed for a decade as we've gone forward with this. We've
decided how we need to proceed with the competition, and we
need to proceed in that way.
I suppose it's appropriate to ask about whether or not this
possible information error infected the process. I'm not
comfortable that it is. I asked General Schwartz, the Chief of
Staff for the Air Force, earlier about it. He assured us all
that there had been no unfair advantage gained through this
process.
Mr. Chairman, thank you for your leadership. I know you
have members on your side and others that want you to do this,
that, and the other, all in all, it's a thankless task you
have, and I think you've conducted it in a fair way.
I just would like to say, I think producing these documents
is a bad idea. Just because they've been redacted to exclude
source selection sensitive and proprietary information doesn't
mean that releasing them might not cause disruption to the
competition, which is taking place right now and coming to its
conclusion. So, in my view, our disrupting in any way,
politically, the competition would reflect poorly on our
committee.
I understand DOD doesn't object to the committee's release
of the documents. While that fact is relevant, it still doesn't
mean that, in the exercise of its discretion, the committee
should release them before the contract is awarded. So, I do
object to that.
Chairman Levin. They've already been made part of the
record, Senator Sessions.
Senator Sessions. Mr. Chairman, General Masiello, I asked
General Schwartz in this room last fall about the documents,
and he responded that ``both offerors reacted in a responsible
manner and returned the disks that were mistakenly forwarded to
them, to the Air Force. We have confirmed that by forensic
evidence.'' I'd just like to ask you today whether or not you
have any information that would indicate that either competitor
has acted inappropriately when they received the data that
should not have been sent to them.
General?
General Masiello. Senator, by reading the statements that
came from both companies, I was really quite impressed by the
responses, on both companies' part, when they realized they had
data that they shouldn't have had. My assessment is they all
acted very appropriately and have certified to that effect.
Senator Sessions. Mr. Shirley, you've examined forensically
the disk and the information. Have you been able to conclude
that both offerors responded appropriately?
Mr. Shirley. Yes, sir. What we found on their computers was
consistent with what they said that they did, in each case.
Senator Sessions. General Masiello, what action did you
take once you realized this error had occurred?
General Masiello. Sir, what I read the PCO did when she
heard was, she told them to package things up immediately and
get the disks right back to the Air Force. Then they instituted
an IRT. They went over to look and see what happened and what
went on in the Air Force distribution process so they could
correct that immediately. They pulled in the Defense service to
examine the computers and got the CEOs to certify to the
details that came from each incident on the companies' side. It
was very thorough.
Senator Sessions. Do you think that the process as a result
of this disclosure was injured in anyway? Was fairness in the
process damaged in any way?
General Masiello. From what I read here and from the
decision that the PCO has validated by the head of contracting
activity, and the fairness in sharing the same snapshot with
the companies, I would come to the conclusion that it would not
affect the source selection process.
Senator Sessions. If either one of the companies--and they
were told about this--felt they had been unfairly affected by
it, what action, if any, could they have taken?
General Masiello. Sir, a company can protest at any point,
either pre-award or post-award. The companies still have the
opportunity to protest if they think that anything is being
inappropriately managed at this point.
Senator Sessions. How long did the offerors have to lodge a
formal complaint as a result of this event?
General Masiello. It could still be a part of a post-award
protest, should they choose to do that.
Senator Sessions. Have either one protested?
General Masiello. Not at this time, sir.
Senator Sessions. Throughout this whole process there have
been opportunities to protest and neither company has.
General Masiello. That's correct.
Senator Sessions. No formal complaint has been lodged.
General Masiello. That's correct, as far as I'm aware.
Senator Sessions. I suppose, then, that we have to conclude
that both companies feel that this inadvertent disclosure did
not affect them adversely to the degree that they should ask
for it. Would you agree with that?
General Masiello. At this point, sir, I would.
Senator Sessions. On November 30, a New York Times article
indicated that an Air Force forensic specialist inspected both
companies' computers and found that one of the firms had
mistakenly opened a computer file containing information about
its rival's airplane, while the other had not. The redacted
forensic report presented to the committee yesterday asserts
that both companies inspected their own and their competitors'
disk and opened them. General and Mr. Shirley, tell me which
statement is correct, the New York Times report of the matter
or the statement by the Air Force spokesman forensic report by
the Defense Cyber Crime Center.
General Masiello. Sir, both companies put the other
companies' disk in the computer. One of the companies realized
what they saw on the disk right away was probably something
they shouldn't look at. The second company opened one of the
files on the disk, and that's the 10-line spreadsheet snapshot
that was then swapped between the companies. So, both companies
did put the disks in their computer, based on what I read. One
opened a single file, and that's the snapshot of the IFARA data
that's in question.
Senator Sessions. Mr. Shirley, do you agree with that?
Mr. Shirley. Yes, Senator, I do.
Senator Sessions. We've heard the fact that nothing
significant was disclosed, not unfair, it did not affect the
competition, and that neither company has protested.
Mr. Chairman, there's a lot more we could talk about, I
know it's important to every area of the country that has an
interest in the outcome of the contract, but it's really
important for us, on this committee, not to politicize this
process. Every one of these issues, the trade issues and all,
we've discussed for almost a decade and we've made the decision
to go forward. We shouldn't on the eve of this competition take
any action that would suggest we want the Air Force to do
anything other than try to select the best aircraft at the best
price for the men and women who defend our country.
Thank both of you for the effort you've taken to get to the
bottom of the error and establishing, I think conclusively,
that there was no unfairness arising from it.
Thank you.
Chairman Levin. Thank you, Senator Sessions.
Senator Graham.
Senator Graham. Thank you.
I have a completely different take than Senator Sessions on
this. I think this is something we should be looking at; this
is something we should be talking about. Quite frankly, as
Senator McCaskill said, this is not the finest moment for the
Air Force. I happen to be a member of it.
The sheet of information we're talking about, was it the
price proposal that the companies were making?
General Masiello. No, sir. The disk and the information
that was presented and viewed was not proprietary and it
included no pricing data.
Senator Graham. Well, then why do we even care about this?
[Laughter.]
General Masiello. Sir, it's an element of the decision
process, as I understand it.
Senator Graham. Was it an important event in the whole
process? Did the information that was disclosed and viewed by
one company, not the other, matter at all?
General Masiello. Sir, it matters from a fairness
perspective. Whether it's important or not, the important thing
is that we're fair to these companies.
Senator Graham. Do you know if it's important?
General Masiello. I don't know.
Senator Graham. Okay.
So, what's this whole hearing about? You can't tell us
whether it was important or not. At the end of the day, the
whole process has a conclusion to it. We're about to spend $35
billion of taxpayers' money here and quite frankly, I think it
is important. It's not your job to answer this question as to
whether or not we want to award a contract to a company that
receives subsidies from a foreign government.
We're setting precedent here, and I think the committee
should be looking at this. It's hard enough for American
companies to compete already. The Chinese Yuan is 40 percent
undervalued. If we're going to start awarding public contracts,
where one side gets government aid and the other doesn't from a
foreign government, that's something we need to think about.
That's not the purpose of this hearing, but we need to have
some discussion about that.
Mr. Shirley, the person at EADS said that they looked at it
for 15 seconds. Is that correct?
Mr. Shirley. Yes, sir.
Senator Graham. How long was the computer on?
Mr. Shirley. Roughly 20 minutes, sir.
Senator Graham. Now, how can you say that a 15-second
statement in a 20-minute gap in the computer is roughly
consistent?
Mr. Shirley. Well, sir----
Senator Graham. What I'll do is, I'll ask us to sit in
recess for 20 minutes versus 15 seconds, and you'll see, very
clearly, there's a long gap in time between 15 seconds and 20
minutes.
Mr. Shirley. What we're judging, sir, based on the
statement presented by the employee----
Senator Graham. But, the computer was on for 20 minutes; do
you know what was on the screen for 20 minutes?
Mr. Shirley. Yes, sir, I believe we do. You're right, sir,
we can't assert what that employee did or didn't do. All we
know is what the company represented in their statement.
Senator Graham. I'm no forensic expert, but the difference
between 15 seconds and 20 minutes is a lot.
Mr. Shirley. We can tell how long a file is open, sir.
Senator Graham. Thank you. I have no further questions.
Senator Sessions. Mr. Chairman, if the witness could finish
his answer.
Senator Graham. Do you know what they looked at for 20
minutes?
Chairman Levin. Who are you asking?
Senator Graham. I'm asking anybody that can answer the
question.
Mr. Shirley. Sir, can I finish this?
Senator Graham. Sure.
Mr. Shirley. Let me say it this way, sir. Our lab found no
evidence in conflict with either offeror's written statement.
The only files opened were the files identified in the written
statement.
Senator Graham. I know your findings. I'm just asking a
factual question. The computer was on for 20 minutes, the
person said they looked at it for 15 seconds. I guess the point
I'm trying to conclude here is: this whole idea that it doesn't
matter, we can't really get to because you all don't know.
I'm not complaining about the fact that you don't know.
That's not your problem, that's my problem.
Mr. Shirley. Sir, if I can clarify here. Our examiner
concluded that the files were open only for the time suggested
by either offeror.
Senator Graham. I understand. I just wonder how you got to
that conclusion.
Mr. Shirley. He can judge from examination of the media
whether a file was open and when it was closed.
Senator Graham. All right. So, are you saying it was only
opened for 15 seconds, forensically?
Mr. Shirley. Yes, sir. It was open a brief time.
Senator Graham. But, can you say that this file was open
for 15 seconds?
Mr. Shirley. Sir, I'd take that one for the record and we
will send you the precise times on that if we may.
Senator Graham. Okay.
[The information referred to follows:]
I answered to the committee during testimony that the EADS computer
was in a powered mode for approximately 20 minutes after a competitor
file was opened (i.e. a Boeing spreadsheet) and that file was opened
for approximately 3 minutes. Those responses were predicated on DC3's
forensics findings as of the date of the hearing. In the forensic
process, DC3's analyst made technical observations of computer data and
correlated those against affidavits provided by EADS.
The following is the deeper detail behind the response, some of
which was not technically determined as of the hearing date:
DC3's forensics examination determined that the EADS computer
indicated the Boeing spreadsheet was opened at 9:21.14 (Eastern
Standard time as displayed in the computer on 1 Nov 2010). It was the
analyst's opinion there was no relevant, discernible file activity for
approximately 20 minutes at which time the computer was shut down. This
was the basis for my comment that the EADS computer was in a powered
mode for approximately 20 minutes. My testimony that the spreadsheet
was open for roughly 3 minutes was framed on three available data
points: one employee's estimate that he opened the file for 15 seconds,
the arrival of a second employee within an estimated 3 minutes, and no
contradictory forensic evidence; hence the analyst's worst case
conclusion of 3 minutes of access.
However, in making this determination the analyst did note what he
considered to be two superfluous file artifacts, an icon cache file and
a .pip file. Subsequent to the testimony the .pip file was more
accurately identified as Excel12.pip, a file Microsoft Excel uses to
store menu preferences. The .pip file becomes more probative in further
ascertaining the specific length of time the spreadsheet file was open.
This is because the .pip file is only modified when the Excel program
itself is closed. DC3's analyst was only able to draw this specific
conclusion based on post-testimony technical consultation with
Microsoft Corporation experts who developed the software. As previously
indicated, the analyst confirmed the spreadsheet file was opened at
9:21.14. He was able to confirm the .pip file was simultaneously
created, modified, and accessed at 9:21.40. According to the Microsoft
consultation, the .pip file is only updated when the Excel program is
closed and the time of 9:21.40 becomes definitive for file closure. As
a result, the analyst was able to further narrow the 3-minute window,
described in testimony, to 26 seconds. This finding is clearly
consistent with the statement by the EADS employee who estimated he
opened the spreadsheet for approximately 15 seconds. However, this
specific data was not available by the date of the hearing, hence the
reference to the 3-minute window.
Senator Graham. Thank you.
General Masiello. Senator, if I could add something to
this. While the individual looked at the data, that individual
was moved off of the program team into an administrative
holding tank and was not allowed to participate in the program
until the PCO allowed them to.
Senator Graham. You don't know anything about this, but
there's a bunch of problems of how this contract has been
changed. Some people went to jail; they should have gone to
jail.
Before we award this contract, I want to make sure that
what we're doing here, Mr. Chairman, doesn't set a precedent
for the future. Because if this is going to be the way we do
contracting, where one company gets subsidies from a foreign
government and the other doesn't, with public money, we need to
think about that. The process here of what information was
shared and what outcome it had is precedent for the future. So,
I am glad you had this hearing, and I hope we'll think more
about what we're about to do, not less.
So, thank you, Mr. Chairman.
Chairman Levin. Let me just clarify the one point, because
we've had three different statements, it seems to me, Mr.
Shirley, from you.
One, we know from the record that the person who opened up
that file said that they looked at it for about 15 seconds.
When I talked to you earlier today, you said you determined,
forensically, that it was opened for a few minutes. Now you're
saying that the computer was opened, not necessarily the file,
but the computer was opened for about 20 minutes.
Mr. Shirley. Yes, sir.
Chairman Levin. Do I have it straight? If not, straighten
it out right now.
Mr. Shirley. Yes, sir. The computer was in a powered state
for about 20 minutes.
Chairman Levin. How long was the file open? How long was
that page visible?
Mr. Shirley. My recollection, from the briefing from my
examiner, was roughly 3 minutes, sir.
Chairman Levin. Okay.
Senator McCaskill. Three minutes.
Chairman Levin. I think it's important that we get our
terms straight, okay?
General Masiello. Mr. Chairman, could I add to this, as
well?
Chairman Levin. Of course.
General Masiello. From what I read in the documentation,
the person who was responsible for opening the file and seeing
it realized that they shouldn't be looking at it. Their
procedures are that when they see something they shouldn't,
from what I'm seeing here, a two-person rule comes into play.
They saw it, and they were in a sensitive compartmented
information facility (SCIF), they couldn't use their phone to
get the other person there to come help them close it and
follow the procedures. So, they went outside of their
classified area to use the phone to get hold of this person to
let them know that they had discovered something that they were
all going to get in trouble for, and they didn't want to get in
trouble for.
So, the screen might have been open, but he was the only
person in the room. He left the room to get the other person to
come help them follow their procedures to close the data.
Chairman Levin. That's the statement of the person who
opened the file. But, in terms of how long the file was open,
to get it straight, forensically, 3 minutes. Is that correct?
Mr. Shirley. Yes.
Senator Graham. Mr. Chairman, the Air Force obviously is
trying to make sure this is not a big deal.
Chairman Levin. I'm not trying, Senator Graham, to say
whether it's big or small because, obviously, it raises some
significant questions or we wouldn't be here.
Senator Graham. Yes, it does.
Chairman Levin. I'm not trying to defend or attack, I'm
just trying to straighten out facts because we've had a
statement here that it seems to me we have to be very clear on
from Mr. Shirley.
The computer was powered for perhaps 20 minutes; the file
was opened for 3 minutes; the person who opened the file said
they looked at it for 15 seconds. That's the statement which
the person gives. Those are the times that we're talking about.
Whether or not it is significant that EADS had that
information for some period of time, whatever that information
was that was seen by that person existed for some period of
time before the two files were exchanged, right? The
significance, or lack thereof, is, it seems to me, an important
issue which we'll get to a little bit later. But for the time
being that's the time, okay?
Thank you, Senator Graham.
Forgive me, Senator Wicker, I've intervened before I called
on you; I wanted to straighten that out. Thank you.
Senator Wicker.
Senator Wicker. I thank you for straightening that out. I
think that was very helpful. I appreciate the Chair actually
giving Mr. Shirley an opportunity to answer the question. This
is not a jury trial, where we're trying to play ``got you.''
We're able to leave the record open and get a full explanation.
I think I see what's going on here, Mr. Chairman.
There are some people in this town who believe that the
company that they favor may be about to lose a bid again, as
they did in 2008. A foundation is being laid for howls of
protest. I don't have any idea who's going to win the award. I
do know who won it in 2008. I regret that DOD didn't go forward
with that contract then. We would be very, very close to having
a tanker that we could rely on.
But, I see what is happening with this hearing. It's no
wonder that General Masiello and Mr. Shirley can't answer these
questions, because they're not involved in the actual award.
I thought this was going to be a hearing about how the
information was inadvertently released and how that has been
corrected.
Let me see if I can get to this procedure, with regard to
the computer being on for 20 minutes, the file being open for
about 3 minutes, and the statement of the individual, that he
viewed it for some 15 seconds.
Do I understand, General, that the EADS procedure is that,
once an individual realizes he has opened a file, then he must
go and get a second person to come in and verify that before it
can be closed? Was that your statement?
General Masiello. Sir, I'm not sure what the procedures
are. What I read was, they instituted a two-person rule that,
together, they closed the data, they sealed the data, and they
took the disk and put it in a safe, separate from any working
documents, isolating it completely from the rest of their
specific bid information.
Senator Wicker. Mr. Shirley, is that consistent with the
file being open for approximately 3 minutes?
Mr. Shirley. We were given to understand at the lab that
when the employee opened the file, they were very nervous about
what had occurred, they realized that they shouldn't be looking
at that particular piece of data. They went through some sort
of internal process to see, ``Geez, how should we walk back
from this,'' and essentially find another witness or a second
party to sort of instruct them, ``Okay, what do we do next?
We're into something that's awkward.'' So, that was why the
computer, we were given to understand, was left on while they
figured out that internal process. As they did, then they shut
the computer down and went through the process that General
Masiello just described, Senator.
Senator Wicker. Okay.
Then, General, the Air Force, after looking at this and
after understanding what had happened, decided to level the
playing field. Now, once again, tell the committee what
information has been shared to each of these competitors to
level the playing field.
General Masiello. As I understand it, it was the snapshot
screen of the spreadsheet that the contractor saw. They took a
picture of the screen from the computer that had that
information, and took that same picture of the screen from the
other competitor, and swapped that information. It's just a
single piece of paper that had the spreadsheet from each
offeror. It's the IFARA data.
Senator Wicker. Okay, so it really wouldn't matter if the
person from EADS had looked at that file for 20 minutes, would
it? Because, now both competitors can look at each other's
snapshot of that spreadsheet for an infinitely long time, is
that not correct?
General Masiello. That's correct, Senator.
Senator Wicker. I really don't think there's anything more
to ask about. Did either competitor change their proposal
significantly after this information was shared?
General Masiello. Sir, I have no way of knowing that. But,
right now they still have the opportunity to change it, should
they choose to.
Senator Wicker. Okay.
My friend from Missouri mentioned a protest.
With regard to this release of information, is it a fact
that neither Boeing nor EADS has protested this?
General Masiello. That is correct.
Senator Wicker. As a matter of fact, I would observe, Mr.
Chairman, that the statements from both of the companies that
are before us, are both relatively straightforward and
relatively relaxed about this, and that neither, having had an
opportunity to file a protest, has done so.
Can either of you answer this question--and I suspect you
can't, because you're not involved in the contract--the
testimony is that this is not proprietary information, but in
previous competitions, hasn't this exact data been provided in
2008? Isn't it already part of the public record?
General Masiello. Sir, I'm sorry, I can't answer that.
Senator Wicker. Okay. I expected that was the answer.
Mr. Chairman, you had no choice but to call the hearing.
Until I see a protest from either company, I'm going to
conclude that the Air Force saw an example of human error, and
that they responded correctly, professionally, and properly,
and have now leveled the playing field, and we should go
forward and, hopefully, not see further delay in this very
important program.
Thank you.
Chairman Levin. Thank you, Senator Wicker.
Senator Brown.
Senator Brown. Thank you, Mr. Chairman.
All I can say is, thank goodness it wasn't highly
classified information like we've had in other circumstances.
Being in the military, I understand the followup, the checks
and balances where you try to identify the problems, where they
were, and you move forward to make sure it doesn't happen
again. I appreciate that.
Are you able to guarantee to the committee that the
unauthorized release of this information did not give one
contractor an unfair advantage?
General Masiello. Sir, I can't guarantee anything like
that. I don't know enough about it, whether to judge or not.
Senator Brown. Right.
General Masiello. But, what we have done has provided the
same type of information to both contractors now. From what I
can see, and based on the Air Force having taken that action,
it appears that they have leveled the playing field.
Senator Brown. You're right, you can't answer that. I'm not
quite sure why we're actually here. I understand there may be
other things happening behind the scenes that are forcing us to
be here.
Your statement could have been given to me offline as to
what you've done. I understand sometimes we need to politicize
things a little bit more.
The one thing that I'm surprised at is, it takes 10 years
for the Federal Government to issue a contract. Only in the
Federal Government does it take 10 years to issue a contract.
It's amazing to me.
I'm not as new as I once was, but I'm just amazed when I
learn about these breakdowns. Not only is it not cost
effective, we're wasting taxpayers' money, we're losing the
confidence of the people that we deal with, not only the
average citizen, but the individual businesses that we deal
with to the point where they think, ``Why bother? It's going to
take 10 years. We're going to have to file a bunch of protests.
It's going to go on and on and on and on.'' It just makes no
sense to me.
I want to thank you for braving the elements and taking the
time to come in. We thank you for the preparation.
Thank you, Mr. Chairman.
Chairman Levin. Thank you, Senator Brown.
I think the question was raised as to what was available
during the last protest. Was one contractor's IFARA data made
available to the other contractor as a result of the protest
process during the previous competition?
General Masiello. Sir, I can't answer that question. I
don't know.
Chairman Levin. We'll ask that for the record. That is a
question which is factual and it's not in any way, it seems to
me, inappropriate to know, because that gets to the question as
to whether this data is relevant.
General Masiello. Right.
Chairman Levin. It could be relevant that, assuming that
this data was known to the person or understood by the person
or remembered by the person who saw it for somewhere between 15
seconds minimum and a few minutes maximum, according to the
experts here, whether that data gave an advantage because it
was available to the one contractor for the month, or whatever
it took, before the switch took place. I'll ask you the
question, whether or not that would give any advantage to have
that data, assuming it was remembered, to have that in one's
possession for that period of time between November 1 and the
time that the data was exchanged. Do you know the date of that
exchange?
General Masiello. November 22.
Chairman Levin. Okay, so whether or not that gives an
advantage or not to have the data, assuming it was remembered
for that 21-day period or not, is not, as I understand it, for
you to say. Is that correct?
General Masiello. That's correct. But, if I were just
looking at a snapshot of the information, and all I did was
have a snapshot of the information, I wouldn't have known what
was going on behind the data to get to that point. The person
who did have that information, who had seen that screenshot,
was removed from the program, so they were not allowed to talk
to anybody associated with the program. They have not,
according to their certification--that was also certified by
the CEO--talked or told anyone in the company what they saw on
that data.
But, now that it's been exchanged it's level.
Chairman Levin. When you say, ``it's level,'' I think you,
frankly, should be a little more cautious. I think it's an
attempt to level the playing field.
General Masiello. Fair enough.
Chairman Levin. It may be a successful attempt.
General Masiello. Fair enough.
Chairman Levin. Unless there's some advantage to having
that data for 21 days, in the possession of somebody who has
said they didn't share that data with anybody else, then that
is an attempt to level the playing field, which may have
succeeded. Okay?
General Masiello. Correct.
Chairman Levin. Okay.
General Masiello. Fair.
Chairman Levin. General, I just have a couple more
questions. The remedy here or the attempt to level the playing
field, which, again, may or may not succeeded--people may want
to argue that--but, what other options were considered by the
Air Force to remedy this mistake?
General Masiello. Again, Senator, I don't know.
Chairman Levin. If you don't know, that's fine.
General Masiello. I don't know.
Chairman Levin. You've been called here for a specific
purpose, and you have given us the information to the best of
your ability.
Same thing with you, Mr. Shirley.
I think we have to be fair to you as to why you were
called.
It's important that we get this information on the record,
although it may be of limited value. It is part of an overall
picture on this contract, which took 10 years by the way,
because there was fraud and corruption involved in one point
during this process where someone landed in jail. There are a
number of reasons why it's extended. The last thing I want to
do is inappropriately extend the period. This hearing is not
doing that.
We're simply getting information. Whatever the value of
that information is, in advance or afterwards, you can debate
that too. I happen to think it's useful to get this out in
advance for a number of reasons. I think the clearer the air is
going into that decision, the better off we are. This is
intended to get factual information whichever way one wants to
argue it, on the record, prior to a decision. I shouldn't say
it clears the air; we don't know if it clears the air. Some may
argue that it gives weight to one side or the other. I'm not
arguing that.
It is important, it seems to me, that all of the
appropriate facts that can be made public are made public
before the decision. There may be a lot of arguments after the
decision, but at least before the decision, it seems to me we
ought to get as much out there on the record as we can.
So, you don't know what other options were considered by
the Air Force. I will ask for the record the question about
whether, in the previous protest, this information was made
available to the competitors. Will you take that for the
record?
General Masiello. Yes, sir.
[The information referred to follows:]
As part of the post award debriefing at the end of the February
2008 Source Selection, each offeror was provided the other offeror's
IFARA Fleet Effectiveness Value (FEV). The FEV is the bottom line
information that was part of the information inadvertently disclosed
and subsequently provided to each offeror to level the playing field in
the current KC-X Source Selection.
Chairman Levin. Okay. Senator Sessions.
Senator Sessions. Let me just say, in defense of the Air
Force, thousands of decisions and interactions and
communications, I'm sure, have been undertaken in this effort.
After the last incident in which fraud was discovered and
Boeing officials went to jail, the effort redoubled to do this
in the most fair way possible, to the extent to which the
greater capabilities of the airplane to be built in Alabama
were really not considered in the bid. It's basically a low-bid
contract to make sure that whoever comes in with the lowest
price gets the contract, no matter if one plane is more capable
in every single area of evaluation; they get very little credit
for that.
I know the Air Force has bent over backwards to be fair
about this. Human errors occur, and I just don't think it
should besmirch the reputation of the Air Force. I do believe
that you took appropriate action.
General Masiello, didn't the Secretary of Defense send an
IRT to come and evaluate the accident independently of the
people who were supervising the contract?
General Masiello. Yes, sir.
Senator Sessions. I just think the Air Force tried to do
what they could. They notified everybody, they did everything
they could do. Fortunately, it appears that nothing serious
happened that jeopardized the fairness of this contract. I
think that's pretty plain.
Mr. Shirley, the examination report from the Defense Cyber
Crime Center, Defense Computer Forensics Laboratory, that's a
unit that takes pride in its independence and integrity, does
it not?
Mr. Shirley. Yes, sir, it does.
Senator Sessions. You were brought in to independently
evaluate what happened.
Mr. Shirley. That's correct, sir.
Senator Sessions. You concluded that ``no signs of network
connections were disclosed, and no signs of attached storage
devices were found.'' That was one of the findings.
Mr. Shirley. That's correct, Senator.
Senator Sessions. No sign of any documents being printed
were found, is that correct?
Mr. Shirley. That is correct, sir.
Senator Sessions. No trace of K-76B data, other than file
names, was found on the server's hard drive.
Mr. Shirley. That's correct, Senator.
Senator Sessions. That would indicate that nobody
downloaded, copied, or stored this information, would it not?
Mr. Shirley. We saw no evidence of that, sir.
Senator Sessions. That's pretty conclusive, actually, your
ability to determine that. I think that's important.
I think, General Masiello, Senator Wicker asked you an
important question. The document that was revealed when he was
opening that file, did that include dramatic, important
evidence? Or, fortunately, was it something that did not impact
the fairness of the competition?
General Masiello. I don't know the relative importance, but
whether it did affect or establish or create, at minimum, an
appearance of unfairness by swapping the same snapshot between
the companies, the same type of information between the
companies, that reestablished from the Air Force perspective
fairness in the competition.
Senator Sessions. With regard to the parties who are
aggressively competing for this, and, I hope, submitting the
lowest possible bids, for the benefit of America and the
taxpayers, they can possibly submit, because that's what it's
going to take to win this contract--I understand there was a
10-day formal complaint period. Maybe I'm wrong about that.
But, at any rate, neither competitor has filed any kind of
formal complaint about this matter.
General Masiello. That's correct.
Senator Sessions. The individual, as you noted, that saw
that was removed from the process.
Mr. Chairman, I think it's fine that we had the hearing. We
were briefed on it by the Air Force immediately. General
Schwartz testified to it in December of last year. I believe
they responded well. I think both parties understand what
happened and are prepared to accept the Air Force's decision,
or else they would have protested. This critically important
contract is on the road to final decision. I just hope and pray
and expect that the Air Force will do so fairly and
objectively, and award the contract to the competitor that
deserves to win.
I would repeat one more time, when we directed, explicitly,
as part of the National Defense Authorization Act, that this
award of the tanker contract would be competed, we knew there
were only two competitors in the whole world that could provide
this. At that time, people raised some of these issues. Now,
there are arguments on both sides, but we made that decision.
We're moving forward to the final decision, going forward with
the two competitors in the world aggressively submitting bids
to produce an aircraft, hopefully, that will meet the standards
of the Air Force at the lowest possible price.
Our committee certainly has not been shy about it, Mr.
Chairman. We've done, I think, our duty without politicizing
the process, to date. I hope that we can continue at that rate.
Chairman Levin. Thank you very much, Senator Sessions.
Senator McCaskill.
Senator McCaskill. Mr. Chairman, I want to take a moment
after my friend from Mississippi said that he could see what's
going on here. I want to explain, very clearly on the record,
what's going on here, from my perspective as a Senator.
Am I unhappy about the notion that a subsidized company
from another country is going to compete on a level playing
field with a company that's not subsidized? Yes, I'm very
unhappy about that. I've heard a lot of lectures over the last
year about socialization and the notion that government should
not be subsidizing private companies. The idea that all of a
sudden we can completely ignore that and decide, ``Well,
socialization's okay if it's being done in another nation,''
and then a company that's being subsidized by the government of
another nation is going to compete on a level playing field
with a company that's a free-market company, I think, is
absolutely wrong, especially in DOD.
What if this company was owned by China? Would we take that
into consideration? Okay, so they're our allies, and they're
only subsidized to the tune of $10 or $20 billion. We don't
take that into consideration? I don't want to hear any more
lectures about the government's socialization or subsidization
of American companies, because if this is not relevant, then we
shouldn't be complaining about it.
That's what's going on. These jobs aren't going to
Missouri. This tanker wouldn't be built in Missouri. This
tanker's going to be built in another State. What happened here
is there was fraud. There were criminals. Then the process was
not fair, with all due respect, Senator Sessions. It wasn't.
They didn't bend over backwards to make the process fair
after the fraud was found, because, in a very unusual move, one
of our major defense contractors filed a protest. An
independent auditing agency said, ``You know what? It was very
unfair.'' That's what happened in 2008. They stacked the deck.
I'll tell you, from my standpoint, what I think happened
is, they were embarrassed. The Air Force was embarrassed that
they had allowed fraud to go on in this kind of competition,
and they overcompensated and said, ``Okay, Boeing, we're going
to make sure you don't get it.'' They put out a proposal that
GAO said every single basis was unfair.
That's how we got here. It wasn't that the Air Force bent
over backwards to make it fair after the fraud. We have an
independent evaluation of that.
I just want to make sure the record's clear about that,
because I don't care where the jobs were going. I don't think
DOD should treat companies equally if one is subsidized by a
foreign government. I think it's a bad precedent. I don't think
we should be doing it. I think most Americans don't think we
should be doing it.
I know there are jobs that are going to be had here in
various States. We all do this around here. We're competing for
jobs, just like American companies are competing for jobs. I
think, at the end of the day, we should be doing everything we
can to at least take that into consideration, because the
lowest and best price is relevant to whether or not they're
subsidized. It's relevant.
I wanted to explain what's going on here from my
perspective, because these aren't Missouri jobs. These are not
Missouri jobs. I think this is a process that has been terribly
flawed.
A lot of what you've testified today, I think, is fair.
This really isn't a trial, because, frankly, if this were a
trial, I could ask a series of leading questions that would
highlight what I think is the case. A lot of what you've
testified is that you couldn't prove that EADS didn't do what
they said they did.
In other words, the computer was on; you can't prove
whether they looked at it. There's no proof, other than the
man's testimony, whether he looked at it for 15 seconds or 3
minutes, correct? You just can't disprove what they said,
correct?
Mr. Shirley. Ma'am, I think it would be wise for us to send
you the specific technical findings, in a question for the
record, to clarify that.
[The information referred to follows:]
I answered to the committee during testimony that the EADS computer
was in a powered mode for approximately 20 minutes after a competitor
file was opened (i.e. a Boeing spreadsheet) and that file was opened
for approximately 3 minutes. Those responses were predicated on DC3's
forensics findings as of the date of the hearing. In the forensic
process, DC3's analyst made technical observations of computer data and
correlated those against affidavits provided by EADS.
The following is the deeper detail behind the response, some of
which was not technically determined as of the hearing date:
DC3's forensics examination determined that the EADS computer
indicated the Boeing spreadsheet was opened at 9:21.14 (Eastern
Standard time as displayed in the computer on 1 Nov 2010). It was the
analyst's opinion there was no relevant, discernible file activity for
approximately 20 minutes at which time the computer was shut down. This
was the basis for my comment that the EADS computer was in a powered
mode for approximately 20 minutes. My testimony that the spreadsheet
was open for roughly 3 minutes was framed on three available data
points: one employee's estimate that he opened the file for 15 seconds,
the arrival of a second employee within an estimated 3 minutes, and no
contradictory forensic evidence; hence the analyst's worst case
conclusion of 3 minutes of access.
However, in making this determination the analyst did note what he
considered to be two superfluous file artifacts, an icon cache file and
a .pip file. Subsequent to the testimony the .pip file was more
accurately identified as Excel12.pip, a file Microsoft Excel uses to
store menu preferences. The .pip file becomes more probative in further
ascertaining the specific length of time the spreadsheet file was open.
This is because the .pip file is only modified when the Excel program
itself is closed. DC3's analyst was only able to draw this specific
conclusion based on post-testimony technical consultation with
Microsoft Corporation experts who developed the software. As previously
indicated, the analyst confirmed the spreadsheet file was opened at
9:21.14. He was able to confirm the .pip file was simultaneously
created, modified, and accessed at 9:21.40. According to the Microsoft
consultation, the .pip file is only updated when the Excel program is
closed and the time of 9:21.40 becomes definitive for file closure. As
a result, the analyst was able to further narrow the 3-minute window,
described in testimony, to 26 seconds. This finding is clearly
consistent with the statement by the EADS employee who estimated he
opened the spreadsheet for approximately 15 seconds. However, this
specific data was not available by the date of the hearing, hence the
reference to the 3-minute window.
Mr. Shirley. I did not read that employee's statement. I
did not see that material. The aspect that he looked at it
fairly briefly, 15 seconds, is something that I understand from
the conversations relating to preparing for this.
We had each company's computer that was forwarded to us,
based on the agreement of the companies and the Program Office,
and delivered to our lab. Then we subjected each of those
company's computers to a detailed forensic examination that's
outlined in a very exhaustive technical report.
I did not review the specific details of the entirety of
that report out of a concern that it had source selection or
other proprietary material. I wanted to understand that, in
directing the assets of our lab and our process, that we
received those computers in the right fashion, that we looked
at those with the right subject matter experts, that could
deliver a technical report consistent with our processes and
procedures; and then, under the specific direction of our lab
director, that process was conducted and we rendered the
technical report as a result of that process.
I believe I mentioned earlier that, from that technical
report, the only files opened were the files that were
identified in each of the respective written statements, and
that the files were only opened for the time suggested by each
of the respective companies.
Senator McCaskill. Wait just a minute there. I understand
that they were opened for that period of time. But the only
knowledge we have about how long the screen was looked at is
what the individual said.
Mr. Shirley. Yes.
Senator McCaskill. We have no way of knowing whether they
looked at that screen for 15 seconds or whether they looked at
it for 3 minutes.
Mr. Shirley. Senator, you're precisely correct.
Senator McCaskill. Right. Okay. That's what I wanted to
establish.
Mr. Shirley. Yes, ma'am.
Senator McCaskill. Could EADS have adjusted their final and
best offer? This is my question; it's a yes-or-no question.
Could EADS have adjusted their final and best offer based on
the IFARA data, General?
General Masiello. Ma'am, now that they have an exchange of
the information, both offerors have the opportunity to adjust
their proposals.
Senator McCaskill. I understand now.
But let's assume that after someone looked at the screen,
could they have adjusted their data? Or could they have
adjusted their final and best offer?
General Masiello. I don't know, because I don't know how
much information was revealed in the quick amount of time that
they looked at the information.
Senator McCaskill. Do you believe, based on the IFARA data
that was on the page, that 3 minutes would be enough time to
memorize that data?
General Masiello. I can't speak for the individual.
Senator McCaskill. I don't want to ascribe nefarious
motives to this company.
I am just frustrated, because I'm embarrassed at how this
process has happened from the beginning to this moment. I am
very exercised about the notion that we are not going to have a
policy in this country that doesn't take into account, when we
are having a competition, that one company is subsidized to a
very large extent. If we were subsidizing Boeing to this
extent, there'd be press conferences going on around here about
how this is a subsidization bailout and the government
shouldn't be in private companies' businesses. But somehow it's
okay now. I just don't get that inconsistency. That's why I'm
as exercised as I am.
Thank you very much, Mr. Chairman.
Thank you all. I understand you're here and my passion
about this has very little to do with the fine work you've done
preparing for this hearing and the efforts you've made after
this unfortunate incident. But, nonetheless, I think it's very
important that I explain what's going on with this Senator.
Thank you very much, Senator Levin.
Chairman Levin. Thank you, Senator McCaskill.
Senator Sessions. Mr. Chairman, could I offer for the
record the GAO report on the protest previously? It found 8
violations out of 111 complaints. They were very close
questions, in my view, whether that protest should have been
upheld. I don't think the Air Force deserves as much criticism
as my colleague suggests.
Also, when I was referring, Senator McCaskill, to bending
over backwards, I really thought I meant post-protest.
Senator McCaskill. I would agree with you on that.
Chairman Levin. That will be made part of the record.
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Chairman Levin. Senator Wicker.
Senator Wicker. I appreciate Senator Sessions making that a
part of the record, and for the committee accepting it without
objection.
Someone should correct me if I'm mistaken, but the
information provided to me by my staff is that in September WTO
ruled that, in fact, Boeing received illegal aid from the U.S.
Government, and that, as a matter of fact, WTO has made
findings against both of these competitors with regard to
improper aid from their governments. I stand to be corrected,
but that's the information I have.
The information that I also have is that the Secretary of
Defense has determined that these WTO rulings against both
competitors will not be a factor in the competition.
A determination was made in 2008, by the independent
analysts at the Acquisition Office, that, in fact, EADS and
their partner at the time had a bid for the best aircraft. I
thought the criteria should be what's best for the U.S. Air
Force, what's best for the fighting men and women who are going
to depend on this, and what's best for national security. In my
judgment, that decision was made independently and correctly.
By kicking the can down the road now to 2011 there is a
real risk, Mr. Chairman, that the acquisition for major
projects such as this, will always be called into question. I
fear that we've done great damage to the future of acquisition
in DOD.
Let me make a final point about the 3 minutes versus the 20
minutes versus the 15 seconds. That information has now been
shared with both companies. Is that correct, General?
General Masiello. Yes, Senator. That's correct.
Senator Wicker. So, it wouldn't matter if the EADS employee
had looked at the data for 3 hours or for 3 days. Each company
now has that one little bit of information from the other
company. They've had it, and they could analyze it until the
wee hours of the morning. Is that correct?
General Masiello. That's correct, sir.
Senator Wicker. I appreciate what the Air Force has done.
Clearly, human error is, unfortunately, going to happen.
Anytime an organization is shot through with people, you're
going to have human error occur.
I appreciate what the Air Force has done. They're my branch
too. I love them all, but as Senator Graham said, I'm an Air
Force veteran and an Air Force Reserve veteran, and I think
that the Air Force acted very professionally and has corrected
this inadvertent mistake.
Thank you, Mr. Chairman.
Chairman Levin. Thank you very much, Senator Wicker.
For the record, let me just put in a chronology here,
because this committee has been following the tanker
modernization program closely for a number of years, obviously.
In 2002 and 2003, we directed a series of reviews. We held
hearings that identified serious problems with the sole-source
lease originally proposed by the Air Force. This ultimately
led, or helped to lead, to the cancellation of the contract.
That was the time when the corruption was discovered. That was
described earlier today, that this committee played an
important role in uncovering that; and Senator McCain,
particularly, took the lead on that, but a number of us very
much supported that effort.
In 2007 and 2008, we closely followed the Air Force's
unsuccessful second attempt to award a tanker contract. It was
unsuccessful because GAO upheld the protest to that award.
Now we're trying to do what we can to get on the record for
consideration the facts that surrounded this release of
information that obviously never should have taken place. There
was some significant incompetence that led to this release of
information. Everybody acknowledges it shouldn't have been.
Whether or not the effort of the Air Force to level the
playing field, in fact, succeeded or not is not a matter for
deliberation. We're not looking at that aspect of it. That may
or may not be debated by one or more of the parties later on.
But, that would be the issue, it seems to me, as to whether or
not that playing field, in fact, has been leveled. There
clearly is an attempt to level it. I commend the Air Force for
trying to do that. But, whether or not, in fact, it has been
leveled, or whether there was some either advantage during that
21-day period that existed is another issue.
This analogy probably doesn't work at all, but you can give
somebody who is wealthy a dollar, and you can give somebody who
is broke a dollar; the fact that you gave them both a dollar
clearly advantages the person who's broke more than the person
who's wealthy. But, you gave them both a dollar.
In this case, I have no opinion on this question, but it
seems to me it could be an issue as to whether or not the
exchange of the same information advantages one party more than
the other, for whatever reasons could exist.
The intent to level the playing field is clear. That's
clear. The attempt to do that is the right thing to do. But,
whether it succeeds or not is a different issue, one that I'm
not able to expound upon, because I'd have to know exactly what
those arguments are. I think we have to at least leave open
that possibility.
My colleagues, I thank you all.
I want to thank our witnesses for their presence here
today, for coming during this weather challenge. I know,
particularly for one of you, you came a long distance, and
maybe had no sleep. I won't identify which of the two of you it
is, because both of you deserve credit for your testimony. I
very much appreciate it.
We will stand adjourned.
[Questions for the record with answers supplied follow:]
Questions Submitted by Senator James M. Inhofe
integrated fleet air refueling assessment
1. Senator Inhofe. Major General Masiello, are all proposed tankers
considered using the Integrated Fleet Air Refueling Assessment (IFARA)
model held to the same criteria running the wartime scenarios? If not,
what are the differences?
General Masiello. The ground rules for the IFARA assessment are
published in the Request for Proposal (RFP). The ground rules are
applied consistently to all offerors. It is only the offerors' unique
proposed aircraft that drive different IFARA Fleet Effectiveness
scores.
2. Senator Inhofe. Major General Masiello, during the competition
for the KC-X, has the IFARA model and guidelines ever been modified? If
so, what was modified and why?
General Masiello. There were three RFP amendments that affected the
IFARA assessment. In Amendment 2, the Air Force corrected transposed
base information on two bases. Amendment 3 more clearly defined the
configuration, with regards to Large Aircraft Infrared Countermeasures
defensive systems, to use in the IFARA analysis. Finally, Amendment 4
corrected a spreadsheet that had a note, which referenced four priority
bases, when in fact, the RFP scenario contained five bases; only the
note was in error.
3. Senator Inhofe. Major General Masiello, does IFARA determine how
many tankers it takes to accomplish the mission?
General Masiello. Yes. IFARA computes how many tankers are required
to accomplish a classified scenario made up of four theaters. The
scenarios and ground rules were established as part of DOD's 2005
Mission Capability Study and remain valid today. The IFARA process
generates a Fleet Effectiveness Value by dividing the number of KC-135R
tankers to accomplish the four scenarios by the number of offeror-
proposed tankers to accomplish all four scenarios.
4. Senator Inhofe. Major General Masiello, does the number of
tankers required impact the total evaluated price which the source
selection is based on?
General Masiello. Yes. Per Section M of the RFP, the offeror with
the lower number of tankers will receive a credit equal to the
difference in tankers required multiplied by the average price of each
tanker proposed.
FEDERAL ACQUISITION RULE
5. Senator Inhofe. Major General Masiello, I believe Federal
Acquisition Rule (FAR) 3.104-4 covers disclosure, protection, and
marking of contractor bid or proposal information and source selection
information. It states, ``Except as specifically provided for in this
subsection, no person or other entity may disclose contractor bid or
proposal information or source selection information to any person
other than a person authorized, in accordance with applicable agency
regulations or procedures, by agency head or the contracting officer to
receive such information.'' Was the FAR violated by the unintentional
disclosure of the IFARA? If so, what is the consequence of violating
this FAR?
General Masiello. The inadvertent disclosure did not comply with
the FAR. Therefore, the Air Force took numerous actions, including
asking for an outside Office of Secretary of Defense (OSD)-led
investigation, obtaining written statements and certifications from the
offerors, and obtaining computer forensic analysis by the Defense
Computer Forensics Laboratory. In the end, the Air Force Contracting
Officer determined, and the Head of Air Force Contracting concurred,
there was no intentional Procurement Integrity Act violation and that
the procurement could continue, because there was no impact to the
integrity of the source selection. However, to eliminate even the
appearance of an unlevel playing field, the Air Force provided each
offeror the same IFARA information about the other offeror. Each
offeror was also afforded the opportunity to update any aspect of its
proposal.
RELEASE OF IFARA DATA
6. Senator Inhofe. Major General Masiello, I remain concerned about
the release of the IFARA data and any impact it could have on the
overall award of the KC-X contract. It could directly impact a bidder's
strategy for establishing its final price which is due this month.
Given the unfortunate circumstances surrounding the release of the
IFARA information, would it not be best to eliminate the IFARA from the
evaluation process?
General Masiello. No. IFARA uniquely measures the integrated
capability of a fleet of tankers in wartime scenarios. Elimination of
IFARA could result in significant operational capability being
eliminated by all offerors. The Air Force believes the actions taken
level the playing field. Further, all offerors equally had several
opportunities to update any part of their proposal after the playing
field was leveled.
7. Senator Inhofe. Major General Masiello, can someone guarantee
that the inappropriate and unauthorized release of the proprietary data
did not give one contractor an unfair advantage in preparing its bid
for the tanker contract or insight into the other competitor's bid
strategy?
General Masiello. Because no price, technical, military
construction, or fuel efficiency information was disclosed, because the
IFARA information is similar to what was disclosed in the previous
source selection, and because all offerors were allowed to update any
aspect of their proposal, the Air Force does not believe there is a
competitive advantage to any offeror.
8. Senator Inhofe. Major General Masiello, after the incident,
according to your written testimony, the Air Force purposefully
released each competitor's proprietary IFARA data to the other
competitor to level the playing field--the summary page which was an
Excel spreadsheet. Given the sensitivity of the data, did you inform
the contractors ahead of time that you were going to do this and give
them an opportunity to respond?
General Masiello. No. The offerors were not given advance notice
nor provided an opportunity to respond. The Government's decision as to
how to proceed to level the playing field was determined to be
appropriate and advance notice and opportunity to respond were not
required by any law or regulation and could have resulted in an offeror
essentially vetoing the way ahead, thereby precluding the Government
from proceeding as necessary.
INVESTIGATION
9. Senator Inhofe. Major General Masiello, I understand an
investigation was conducted after the inadvertent release of the IFARA
data. Who conducted the investigation?
General Masiello. OSD/Defense Procurement and Acquisition Policy
led an independent assessment in response to a request by the Air
Force. The KC-X Contracting Officer and Air Force Head of Contracting
reviewed the results of this assessment and its recommendations. No
intentional Procurement Integrity Act violations were found and all OSD
recommendations were adopted.
10. Senator Inhofe. Major General Masiello, when was the
investigation started and completed?
General Masiello. The OSD independent review of potential
Procurement Integrity Act violations was requested on 9 November 2010.
This investigation concluded 18 November 2010.
11. Senator Inhofe. Major General Masiello, who has been provided a
full copy of the investigation report on the inadvertent disclosure,
including company statements, statements from individual employees,
forensic analysis of computers, and analyses and conclusions?
General Masiello. The OSD investigative report, including all
attachments and statements, were reviewed by the Contracting Officer,
the Air Force Head of Contracting, Air Force and OSD Legal Counsel, and
the KC-X Source Selection Authority. Subsequent to the 27 January 2011
hearing, this document was reviewed by the OSD Office of the Inspector
General. Officials from both offerors were afforded the opportunity to
review Defense Criminal Analysis Reports on their computers. Redacted
versions (to remove source selection sensitive and classified
information) of the OSD report were also provided to the Senate Armed
Services Committee.
DATA FILES ACCESSED
12. Senator Inhofe. Mr. Shirley, during your testimony you stated
that one file was accessed for 15 seconds and then you clarified that
statement and said 3 minutes. What was the length of time the file was
accessed?
Mr. Shirley. I answered to the committee during testimony that the
European Aeronautic Defence and Space (EADS) company computer was in a
powered mode for approximately 20 minutes after a competitor file was
opened (i.e. a Boeing spreadsheet) and that file was opened for
approximately 3 minutes. Those responses were predicated on DC3's
forensics findings as of the date of the hearing. In the forensic
process, DC3's analyst made technical observations of computer data and
correlated those against affidavits provided by EADS.
The following is the deeper detail behind the response, some of
which was not technically determined as of the hearing date:
DC3's forensics examination determined that the EADS computer
indicated the Boeing spreadsheet was opened at 9:21.14 (Eastern
Standard time as displayed in the computer on 1 Nov 2010). It was the
analyst's opinion there was no relevant, discernible file activity for
approximately 20 minutes at which time the computer was shut down. This
was the basis for my comment that the EADS computer was in a powered
mode for approximately 20 minutes. My testimony that the spreadsheet
was open for roughly 3 minutes was framed on three available data
points: one employee's estimate that he opened the file for 15 seconds,
the arrival of a second employee within an estimated 3 minutes, and no
contradictory forensic evidence; hence the analyst's worst case
conclusion of 3 minutes of access.
However, in making this determination the analyst did note what he
considered to be two superfluous file artifacts, an icon cache file and
a .pip file. Subsequent to the testimony the .pip file was more
accurately identified as Excel12.pip, a file Microsoft Excel uses to
store menu preferences. The .pip file becomes more probative in further
ascertaining the specific length of time the spreadsheet file was open.
This is because the .pip file is only modified when the Excel program
itself is closed. DC3's analyst was only able to draw this specific
conclusion based on post-testimony technical consultation with
Microsoft Corporation experts who developed the software. As previously
indicated, the analyst confirmed the spreadsheet file was opened at
9:21.14. He was able to confirm the .pip file was simultaneously
created, modified, and accessed at 9:21.40. According to the Microsoft
consultation, the .pip file is only updated when the Excel program is
closed and the time of 9:21.40 becomes definitive for file closure. As
a result, the analyst was able to further narrow the 3-minute window,
described in testimony, to 26 seconds. This finding is clearly
consistent with the statement by the EADS employee who estimated he
opened the spreadsheet for approximately 15 seconds. However, this
specific data was not available by the date of the hearing, hence the
reference to the 3-minute window.
13. Senator Inhofe. Mr. Shirley, what was the name of the file and
extension?
Mr. Shirley. K-76B Tanker Fleet Effectiveness Table 101101.xls
14. Senator Inhofe. Mr. Shirley, was that file located in a folder/
subfolder or was it readily accessible once the disk was open?
Mr. Shirley. When the disk was opened, one folder was visible
titled K-76B IFARA Results Release 101101. The Tanker Fleet
Effectiveness Table 10/101.xls.
15. Senator Inhofe. Mr. Shirley, how many folders and files were on
the disks provided to Boeing and EADS?
Mr. Shirley. EADS and Boeing copies of the K76 disk contained 378
files in 6 folders. Their copies of the K-30 disk contained 355 files
in 6 folders. However, there is no forensic evidence that Boeing
accessed any of the files or folders other than they got to a point
they could see the K-30B IFARA Results Release 101101 folder being
listed. In addition, there is no forensic evidence that EADS accessed
any files or folders other than the K-76B Tanker Fleet Effectiveness
Table 101101.xls spreadsheet that was located within the K-76B IFARA
Results Release 101101 folder.
16. Senator Inhofe. Mr. Shirley, what did the overall directory of
the disk look like?
Mr. Shirley. When opened by a user using Windows Explorer, the disk
provided to EADS had one folder titled: ``K-76B IFARA Results Release
101101.'' Within that folder, there were two folders--``Depot'' and
``CMARPS analysis. There were also two files--``K-76B IFARA Results
Read Me 101101.doc'' and ``K76 Tanker Fleet Effectiveness Table
101101.xls'' The latter is a Boeing spreadsheet. There is one file
within the Depot folder and 3 folders and 375 files within the CMARPS
analysis folder. Forensic analysis showed that only the folder ``K-76B
IFARA Results Release 101101'' and the file ``K76 Tanker Fleet
Effectiveness Table 101101.xls'' were accessed.
______
Questions Submitted by Senator Jeff Sessions
17. Senator Sessions. Mr. Shirley, how long was each company's
computer that was analyzed by the lab powered up and operating?
Mr. Shirley. The EADS computer was in a power mode for
approximately 20 minutes after a competitor file was opened. Prior to
that file being opened, however, the computer was powered on for
approximately 27 minutes on the night in question during which time it
was used to view EADS tanker procurement material. It was also powered
up the next day for approximately 5 hours and 9 minutes but there is no
forensic evidence that Boeing material was accessed.
The Boeing computer was powered on for 26 minutes and was not used
again before it was sent to DC3/DCFL.
18. Senator Sessions. Mr. Shirley, since both companies acknowledge
inserting their competitor's disk into their respective computers, how
long was each disk inserted into their respective computer before being
removed?
Mr. Shirley. There is no way to tell forensically when a disk is
inserted or removed. All we were able to see is the activity with the
files themselves. If a disk was inserted but there was not activity
with the files, there would be no record of the disk ever being
inserted.
19. Senator Sessions. Mr. Shirley, do you have forensics-based
information which would appear to be inconsistent with the EADS North
America statement that the Boeing IFARA data file was opened and then
closed within 15 seconds?
Mr. Shirley. No, Senator, there is no inconsistent forensic
evidence to the EADS statement. I answered to the committee during
testimony that the EADS computer was in a powered mode for
approximately 20 minutes after a competitor file was opened (i.e. a
Boeing spreadsheet) and that file was opened for approximately 3
minutes. Those responses were predicated on DC3's forensics findings as
of the date of the hearing. In the forensic process, DC3's analyst made
technical observations of computer data and correlated those against
affidavits provided by EADS.
The following is the deeper detail behind the response, some of
which was not technically determined as of the hearing date:
DC3's forensics examination determined that the EADS computer
indicated the Boeing spreadsheet was opened at 9:21.14 (Eastern
Standard time as displayed in the computer on 1 Nov 2010). It was the
analyst's opinion there was no relevant, discernible file activity for
approximately 20 minutes at which time the computer was shut down. This
was the basis for my comment that the EADS computer was in a powered
mode for approximately 20 minutes. My testimony that the spreadsheet
was open for roughly 3 minutes was framed on three available data
points: one employee's estimate that he opened the file for 15 seconds,
the arrival of a second employee within an estimated 3 minutes, and no
contradictory forensic evidence; hence the analyst's worst case
conclusion of 3 minutes of access.
However, in making this determination the analyst did note what he
considered to be two superfluous file artifacts, an icon cache file and
a .pip file. Subsequent to the testimony the .pip file was more
accurately identified as Excel12.pip, a file Microsoft Excel uses to
store menu preferences. The .pip file becomes more probative in further
ascertaining the specific length of time the spreadsheet file was open.
This is because the .pip file is only modified when the Excel program
itself is closed. DC3's analyst was only able to draw this specific
conclusion based on post-testimony technical consultation with
Microsoft Corporation experts who developed the software. As previously
indicated, the analyst confirmed the spreadsheet file was opened at
9:21.14. He was able to confirm the .pip file was simultaneously
created, modified, and accessed at 9:21.40. According to the Microsoft
consultation, the .pip file is only updated when the Excel program is
closed and the time of 9:21.40 becomes definitive for file closure. As
a result, the analyst was able to further narrow the 3-minute window,
described in testimony, to 26 seconds. This finding is clearly
consistent with the statement by the EADS employee who estimated he
opened the spreadsheet for approximately 15 seconds. However, this
specific data was not available by the date of the hearing, hence the
reference to the 3-minute window.
[Whereupon, at 11:11 a.m., the committee adjourned.]
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