NASA skewed space network competition to possibly favor ITT

A House Science and Technology Committee investigation of contracting at NASA's Goddard Space Flight Center charges the agency with flouting federal contracting regulations and internal contractor performance evaluation rules, in the latter case to possibly favor a bid by ITT Corp. to operate the NASA satellite and space mission communications network.

In a report dated July 13, Democratic committee staff say a years-long contest between ITT and incumbent Honeywell Technology Solution begun in 2008 over the "Space Communications Networks Services" contract has been marred, at the very least, by agency personnel who ignored potential organizational conflict of interest issues presented by ITT and by a high official who pushed through a low evaluation of Honeywell's performance not based on the facts.

ITT's bid on the contract carried potential OCI issues since that company had acted as a systems engineering and technical assistance contractor for NASA space communications since 2003.

While the report doesn't assert that an OCI definitely existed, it does note that much of ITT's duties overlapped with Honeywell's and that one of ITT's duties was to evaluate Honeywell engineering design efforts. When Honeywell pressed a NASA contracting officer on the OCI issue, NASA responded by simply asserting that no OCI existed, rather than investigating the issue, the report states.

Before making that assertion, NASA officials determined that if Honeywell were to protest an award to ITT on OCI grounds to the Government Accountability Office, the protest would fail unless Honeywell could demonstrate "substantial facts and hard evidence," the GAO standard for upholding protest assertions, the report states. As a result, NASA officials then spent days reviewing ITT's SETA contract language and tasks.

"This review exercise appears to be less about the substance of what ITT actually did for NASA and more about making sure that Honeywell couldn't find obvious 'substantial facts and hard evidence,'" the report states.

When NASA awarded the space network contract to ITT in October 2008, Honeywell did protest to the GAO, which overturned NASA's decision on the grounds that the space agency misevaluated Honeywell's past performance record. When NASA again awarded the contract to ITT in April 2009, Honeywell once again protested.

Then, in July 2009, a NASA performance evaluation board met to rate Honeywell--still acting as the space communications incumbent contractor--for space network tasks conducted from October 8, 2008 to July 8, 2009. The board initially proposed a consolidated score of 86, or "very good," the report states.

When the board sent its evaluation to George Morrow, director of the Flight Projects Directorate, Morrow "rejected the letter out of hand," the report states.

On August 19, 2009, Nate Wright, the contracting officer's technical representative on the space network contract, wrote Mary Esfandiari, the performance evaluation board chairwoman, that "someone has a direct pipeline to George [Morrow] and he doesn't have all the facts."

But, on August 23, 2009, Esfandiari told Morrow in an email that she would reconvene the performance evaluation board, which ended up giving Honeywell a revised performance score of 70, or merely "satisfactory."

"The record on the basis for the new scores was very thin and virtually no document--not a single note--has been produced from the work of the [reconvened performance evaluation board]," the report states.

Report authors write that there are two possible reasons why Morrow, or NASA, pushed for a lower score. One is that by giving Honeywell a lower score, ITT would gain a clear edge in a past performance evaluation comparing the two contractors.

"The other possibility is that Morrow believed that Honeywell honestly deserved a lower score," but if that's the case, then "his belief that Honeywell deserved a low performance rating was not built on verified evidence or a full record," the report states.

The competition "has been skewed in such a fashion that, at a minimum, creates the appearance of the agency favoring one bidder over another," the report states.

NASA officials were not available at short notice to respond to the report. As for the status of the contract competition itself, NASA signed on January 27 a contract with Honeywell to extend that company's incumbency through at least Oct. 9, 2010 with another possible six months extension after that. However, a July 13 press release from ITT states that it has once again been awarded the Space Communications Networks Services contract and that "ITT will begin the transition immediately." The contract will be worth up to $1.26 billion over five years, according to ITT.

For more:
- download a copy of the House Science and Technology Committee report, "Fairness and Contracting Integrity in NASA's Space Communications Networks Service Competition." (.pdf)
- go to the FBO notice of NASA's extension of space network services with Honeywell
- go to the July 13 ITT Space Communications Network Services announcement
- see the original NASA request for proposals

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