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Office of the Assistant Secretary of Defense (Public Affairs)
News Transcript
Presenter: Mike Wynne, Acting USD Acquisition, Technology and Logistics Monday, February 14, 2005

Roundtable with Mike Wynne, Acting USD Acquisition, Technology and Logistics

Wynne: My name is Mike Wynne, and I'm the Acting Under Secretary of Defense for Acquisition, Technology and Logistics.

Back in I think the October/November timeframe, right after Darlene [Druyun] had pleaded at her sentencing hearing, I believe, we were stunned to learn that she claimed manipulation of some contracts to the benefit of her new employer at the time, and so I set out a three-part plan to try to corral this emerging problem.

Part one was to address immediately the contracts that she had stated in her pleading and have the GAO [Government Accountability Office] produce a disposition of those contracts. We actually asked the participating contractors to in fact submit their protests to the GAO with the exception of the two classified contacts which I believe you might have heard reported on this morning by Andy Pasztor. The Air Force retained the authority over those two classified contracts because of the nature of the business and has just in fact issued a denial in that regard through their process which therefore would have maintained that there was essentially no harm/no foul in the process and that the award would stand.

The same way the GAO is looking at the disposition of several unclassified contracts and their findings are due out the 18th to the 20th, I think they're on track, of this month. They have a defined period for responding.

The second part of the process was to ask the Defense Contracts Management Association vice director to look over the term that Darlene was in her position which was approximately ten years here in the Pentagon, and ask the question, from a position of experts, not from a position of investigators, were there anything that would have violated standard process and should be referred to investigators for further looks.

They assembled a fairly large team consisting of people dominantly outside of the Air Force circles, got tremendous support and cooperation from everybody in the Air Force across the country and in fact went to the field, started with a list of 365 contracts. Through their interview technique expanded the list to approximately 407 contracts. And began looking through all of the relevant fact-based paper to determine whether or not they felt like it had complied with essentially general contracting processes and procedures.

They identified eight additional contracts that they suggested should be referred to the Inspector General. This is in addition any that either the IG or the GAO is investigating today. And in fact if they came upon, which you would think a group of experts would come upon, those particular contracts they automatically referenced those to the investigators because there was already an ongoing investigation.

In that regard I wanted to tell you which ones they were.

Press: Only eight out of the --

Wynne: Out of the 407, yes sir.

Press: Are the ones under investigation already, are they included in the 407?

Wynne: I believe they would be. They were probably on the 365 to start with so they would already be in the 407. I think there's seven of those, but I don't have a list unfortunately of that list. If you need that I suppose we can get that for you.

Press: It would be great to check that if we could.

Wynne: The seven that are added to the list and have been referred to the Inspector General for further review --

Press: Did you say seven or eight?

Wynne: Eight. I'm sorry. I'm getting confused.

Press: No problem.

Wynne: Thank you for that.

Press: The National Polo Orbiting Operational Environmental Satellite System, just the portion that's associated with the conical microwave imager sensor. So as in Pentagon speak it would be NPOESS-CMIS, was a Boeing award, it was in 2001.

Press: Do you have a list?

Wynne: I don't have it with me. I think Cheryl asked that question and she actually got that answer, so we'll have that for you.

The second one is the C-5 Avionics Modernization Program awarded to Lockheed Martin in 1998-1999.

The third is the Financial Information Resource System which goes by the moniker FIRST, which was to Anderson Consulting in 2001.

The fourth is the C-22 Replacement Program, better known as the C-40 Program which was an award to Boeing in 1999 and 2000.

The fifth is something that we'll all find out about because it's called the 60K Tunner Program, a contract for logistics. Tunner is somebody's name. It is a device, which, you see, carries large pieces of gear to and from airplanes. So it's a piece of ground support equipment for cargo airplanes. 60K is apparently it carries 60,000 tons or something along that line. 60,000 pounds. But at any rate, I don't want you to get confused. The Tunner is not anything but the person's name who was memorialized in this piece of equipment. It was won by Systems in Electronics, Inc., SEI, in 2002.

The sixth one is the KC-135 Programmed Depot Maintenance which was won by a team of Boeing and Pemco in 2000, 2001.

The seventh is the F-16 Mission Training Center won by Lockheed Martin in 2001.

The eighth is the follow-on to the fourth, which is the C-40 Lease and Purchase Program awarded to Boeing in 2000 and 2002.

I'm expecting that the IG will take a reasonable amount of time to cull through the papers here plus probably have their own investigators go talk to principals. Some of these contract issues may have been okay and very innovative. We don't know and I did ask my experts not to make or infer or bias the investigators in any way but simply refer to them as issues that should be resolved by professional investigators, not experts. So that's kind of the way it's been portrayed. They have done that.

The whole report has been in fact referred to the Inspector General and probably as to when they would be done and all of that you probably should turn over to the Inspector General team and ask them that question because I didn't get into that with Joe Schmitz.

Following their investigation if they find that these non- or process findings or process issues in fact turn into findings, it is my intention to ask the contractors to in fact file a protest if they so desire. And make sure that they are alerted, which I understand we are alerting all of them that these contracts are being referred to the Inspector General, and as I say, if these process issues turn into findings then we would invite all the participants to review their position and determine whether or not they would like to file a protest similar to the way we have done it on the current package of pleadings.

The third level that I had asked is I had asked the Defense Science Board to go advise me what checks and balances were there, how can we address the issue of the department acquisition authority, and essentially what could I put in place that might inhibit this behavior in the future. Their report is still under development, however early on I can tell you that they're following along four basic areas.

First in the area of process, they believe that there was an accrual of too much power and that they believe we should put policies in place within the services that essentially stipulates that the practices that they're following today should be codified in policy because all of them have reverted to, as a result of the Darlene Druyun pleadings, they have all reverted to far more collegial practices than maybe they had before. And in the assessment of the Defense Science Board who went out and talked to everybody about the way they're doing things now, they said we should codify them in policy and we should then, we do an annual review of their procurement practices and we should go review their performance to that policy and not allow it to simply be practice which could be changed in the future.

Second was oversight. Their view is oversight of processes and practices is as important as oversight of programs. Basically this was a hit on the Office of the Acquisition Technology and Logistics, that they felt like we had gotten a little bit away from overseeing their process of acquisition as we focused more on the oversight of programs. This was basically asking them to do a self-assessment periodically and assisting them in our process management review that we do annually.

The third area is in leadership. Basically this was a reinforcement of what the industry had gone through over the course of the last two decades, really, which was an infusion of ethics and integrity straight down from the leadership team. And though I have acquisition with integrity as my number one goal, and though the Air Force has integrity first as their number one goal, they felt like we should have a focused effort to make sure that we address integrity at the start of all of our staff meetings and essentially reset the environment to be one of high integrity and integrity first as the Air Force wanted and felt like if the leadership did not in fact address integrity that it fell off of the radar screen as you got farther down the line.

So they said a best practice coming in from industry is that they would offer that each staff meeting maybe in all of the command structure should in fact emphasize integrity.

Press: Just the services or your office?

Wynne: This would be my office too, you bet.

The third one is people. They felt like one of the practices that they sought in industry that they really came to admire was the 360 feedback, performance feedback. We do that as we send people off to leadership institutes. But we in acquisition do not do that as a regular process of evaluating our people. We have a new category in acquisition, and Dan I've lost the bubble. We call them now key leadership positions, right? We're going to have a key leadership position. We're going to ask that to be designated by the acquisition leadership. What I'm going to foster is to have anybody that's brought into a key leadership position must undergo a 360 feedback because they felt like 360 feedback, for those of you who find it strange, is normally just the supervisor would do the evaluation. So the supervisor sees down how that individual essentially supports them and supports the mission. A 360 involves peers and subordinates in that same review process so that if the individual manages well up but in fact has isolated themselves from their peers or has intimidated their subordinates, that will come through in a 360 evaluation which, because as you fill out the paperwork, and I've filled it out a few times, the boss is the only one who has to name themselves. Peers and subordinates report anonymously. So it is in fact a fairly informative feedback mechanism and it would have, they felt like, identified her management style and practices well in advance of her being able to use that either for good or in this, in the case that she's pronounced for, for not good.

So that they felt like was one of the things they thought could be done. And as I say, we do do it for, when we see people up for leadership, executive institute, or other things, we generally have them fill out a 360 feedback on the individual but it is for personal growth, it's not for management evaluation. I think their feeling is we ought to also put it in for management evaluations.

So basically their summary to us was that you need to emphasize ethics, respect for people, and the implementation of best business practices throughout acquisition, and they felt like that was the principle reason is the environment was set so that it was not set to deter or dissuade people from having bad behavior.

So that's really the output from the three things that I put in place in October/November, and the reason I called this is to let you know what the outcomes were.

The DSB report should be out in March. It will be public when it comes out as all DSB reports are. They in fact held public hearings throughout their review. The DCMA was more of an in-house and very fact-based. The DSB involved industry experts, government experts, and they tried to assess beat practices across all the buying agencies, so that's kind of the difference in the report structure.

I'm very satisfied that they did a good job, that they did a thorough look, and I'm looking forward to the final report from the Defense Science Board. As I mentioned, I think with the referral of the Inspector General I have closed out the Defense Contract Management report. It was run by Sally Flavin. Sally is the deputy commander of DCMA.

Press: What were the criteria for which the eight programs were referred on? Like what flagged them?

Wynne: This was in the view of these contracts professionals, these were areas where they felt like the process was either sped up, interrupted, or unduly influenced by Darlene.

Press: These people were industry experts?

Wynne: No, this is government. DCMA was involved. Army and Navy predominantly, as well as DoD civilians and military in the look. Their job was to go back over her tenure here, at all the contracts where she may have had a role to determine whether her role was beyond, if you will, or not in accord with what you might see on a normal process basis.

Press: So you have the eight and you have the previous seven. Is that the whole shebang?

Wynne: So far. We also are asking the, there's an Army colonel who assists DCMA on classified programs and he is going back and doing the same thing for the ten years for classified programs. I'm not sure that report will ever be released, but this is just to make sure that we do a thorough job.

Press: Would you give those numbers to us? It was a total of 15 additional contracts that Darlene Druyun received, possibly influenced on?

Wynne: Right. No, I shouldn't say it that way because there are a total of 15 contracts for which Darlene Druyun had influence and it seemed to be out of the normal process.

Press: Did either of these studies speak with her as a part of her, something she was going to cooperate with investigators.

Wynne: Not that I'm aware of.

Press: [inaudible] the 15 [inaudible] accounting for --

Wynne: Her earlier pleadings, right.

Press: [inaudible] unduly influence Druyun. [Inaudible].

Wynne: Where she would participate in meetings with the, both with the contractor and perhaps with the government contracting authorities and either encourage them or discourage them from their present path onto another path. That's a fairly straightforward influence.

To identify -- I wasn't in on the specifics of the thing so I ought to stop there because the rest is pretty much speculation. But just to give you an example and a flavor.

Press: These are all Air Force contracts, these eight contracts?

Wynne: These are dominantly Air Force contracts. I did solicit from the Navy, again for thoroughness, to take a look at the F-18 contract, which was Mike Sears'. He was involved in McDonald Douglas at the time and they came back and reported no anomalies throughout.

Press: Were there any other interceptions [inaudible]?

Wynne: Not that I'm aware of. We actually went to the Navy and asked for that one. They have not referred any others.

Press: She was involved in these other contracts?

Wynne: Now that one I don't know. They could have possibly been with the C-40, but I think it was actually prior to the merger. You might want to check the dates.

Press: [inaudible] by looking at more educated [inaudible]?

Wynne: The Secretary has an interest in making sure that we do a thorough job of all the parties, but like I say we could find, other than the involvement in her hiring practices, no undue influence of Mr. Sears in contract actions.

Press: AT this stage in the process or as you're going ahead, do you feel satisfied that you can say that Darlene Druyun's influence has in essence been scrubbed clean?

Wynne: As a contracts guy I always tried to stay away from all or never. In this particular instance I would say we did a very thorough job looking through what we felt like her influences would have been and believe we have, for her tenure here at the Pentagon, identified what stood out. If there was something more subtle that we missed, I couldn't say, but these were a group of qualified experts, not investigators, that identified these as issues and now we'll have the investigators go out and essentially probably tread some of the same ground. Where their investigation takes them is up to them.

Press: Were you having any other problems with other people, not Darlene, but in the process of looking at Darlene have you stumbled upon someone else who might have had a similar position doing --

Wynne: No. We found that we had over the time, had opportunities where you might think somebody might have had a little bit more influence, but frankly there were no cases where anybody has, and there are always contractor protests, that have been sustained or non-sustained, but there's been no instances we've identified where it's other than very professional behavior.

Press: When you're talking to the public here, is it 470 contracts, roughly two percent. Is that a good message or [inaudible]? It doesn't seem like a lot of issues, here.

Wynne: I should say that from what this group of experts took a look at, I would say that Darlene had, her influence was fairly wide, her message was very clear to do acquisition a lot faster. But I'm looking here specifically at her direct personal influence.

Her indirect personal influence on the department may have resulted in things just being accomplished that she never had a hand in. In other words people just doing things in a faster or a different way. That's one of the reasons that the DSB suggested that we codify into policy some of the things that are being done in practice and to have a measure to compare to.

Press: I guess I'm asking you, the Pentagon's asking for $70 billion for procurement this year. Should the public look at this record and say [inaudible] manage the money or we should discuss how the money's being dispensed? Two percent of 407 contracts, is that a good thing or a bad thing?

Wynne: I would say that it pains me to find any instance where the contracts could have been manipulated for other than the best interests of the taxpayer. There is no best practice or metric that would allow for anything other than zero defects in this area. There are mistakes always made by contract professionals trying to do the best they can for the taxpayer, but it is truly painful to find any where the mistake or the manipulation was intentional and for sure for any personal interest.

That having been said, I think the system is solid, the acquisition process may be difficult at times but all of the difficulties have been placed there for the purpose of having a very disciplined process.

Even in the cases where her process was, influence was identified, it was because frankly the documentation was extensive and the documentation was clear and the process requirements of having the documentation be filled out rationalized and explained was, I think contributes to a very integrity-filled process.

Press: Could you just clarify the fate of those 15 contracts? Are you going to invite the contractors to submit protests, but what would be the ultimate outcome for then?

Wynne: Right now the Inspector General has all of them under his aegis. If he has a finding downstream on the seven, additional eight that have been referred, then at that time is when we will invite in the contractors and take a harder look at their own position and find out who were the competitors.

Right now the final disposition of contacts is for the Inspector General to recommend to me, and even then perhaps the disposition of any protest.

Press: Was she the sole selection authority on these eight new contracts?

Wynne: No.

Press: The Defense Science Board seemed to indicate that while Darlene was abusing the system, there were [inaudible] and [inaudible]. One of the criticisms from Congress has been [inaudible] sought to portray this as one individual gone bad. What is your sense in having seen that report of whether that is an accurate characterization? And is the whole, was the whole system at fault or was it really just --

Wynne: I think all of the leadership has to take responsibility for creating an environment that would have allowed Darlene to accomplish her pleadings. We have to do it though on the basis of creating an environment, or not having policies in place where we might have had policies in place, and allowing practices therefore to be more informal. But to reach for a specific complicit supervisor or a specific complicit assistant, I'm not sure is there. The Inspector General is of course looking into all of those and right now from the data that has been culled and the data the DSB has looked at, I have a feeling that this was much more of an environmental issue that we need to resurrect and correct.

Press: Is there any rumor that [inaudible] in your letter, [inaudible] resign, and is that [inaudible] gesture of taking responsibility?

Wynne: Right now it's really not for me to answer, but frankly, this is one that occurred as you can tell, as far back as 1998. I do feel responsible and accountable for making sure that the environment is put right, but that's about as far as I can take it. As to whether, what my plans are for the future is, as I've often said, it's for somebody else to tell me.

Press: So you are saying these contracts were tainted, these eight additional contracts were tainted by Druyun. [Inaudible] questions about [inaudible]?

Wynne: I would say there are eight additional contracts for which the professional review has identified process issues. As to whether they turn into process fouls or findings is up to the Inspector General. These were not investigators, these were contract process experts.

Press: They were suspicious, they don't smell right, but you're not sure.

Wynne: Yeah, I would say that -- Right now they fall to the level of they could have been good, they could have been bad, I think a professional investigator should put them on either side of that.

Press: And there was probably good cause --

Press: She was involved.

Wynne: Yes, she was involved with all 407.


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