Ret. Admiral to Resign From Board

By R. Jeffrey Smith
Washington Post Staff Writer
Thursday, July 27, 2006

The head of a Pentagon-funded research organization that analyzes large weapons systems promised yesterday to resign from the board of a major defense contractor after senators raised questions about a potential conflict of interest.

Retired Adm. Dennis C. Blair, president of the Institute for Defense Analyses, said in letters to Sen. John W. Warner (R-Va.) and Sen. John McCain (R.-Ariz.) that he told EDO Corp. he would resign from its board. EDO is a subcontractor for the Air Force's multibillion-dollar F-22 Raptor program, which the institute has evaluated for the Pentagon.

One of the studies, completed in February, supported the Air Force's desire to shift from annual purchases of the F-22 to a three-year contract that begins in 2008 and will cost more than $10 billion. The report's conclusions have been challenged by the Government Accountability Office.

Another study, completed last year, was meant to provide an independent estimate of F-22 costs. Since the program's inception in the mid-1980s, it has had at least 10 cost overruns, according to the Congressional Research Service, and now figures to total at least $65 billion for 183 planes, instead of the 750 planes initially contemplated.

In a telephone interview Monday, Blair said he was deeply involved in reviewing the multiyear contract study. He also said the institute had no policy regulating conflicts of interest, and that he decided such issues case by case. He said the study's conclusion that the saving from a multiyear contract would be less than what the Air Force had claimed was evidence of the institute's independence and credibility.

Those remarks prompted Warner and several other lawmakers to express concern at a hearing Tuesday that the institute's study may have been tainted by the appearance of a conflict of interest stemming from Blair's ties to the F-22 subcontractor, including his option to acquire a large amount of EDO stock.

In his letters yesterday, Blair gave a different account of his involvement in the F-22 work. He said he did not play "an active role" in reviewing the multiyear procurement study, although he "received routine reports of its progress." Blair said that with regard to the other study, of F-22 costs, "I attended and participated in the give and take" of meetings that reviewed its conclusions but was not involved in writing it.

Blair also wrote that, contrary to his statement Monday, the institute "has a clearly articulated set of policies" approved by the Defense Department regarding conflicts of interest, which apply to the institute's corporate officers. He did not say what those policies required. "I do not want there to be any doubts in the minds of our sponsors or members of Congress concerning our commitment to providing high-quality, impartial analyses," he wrote.

Blair said he would resign from the EDO board "as soon as possible."

© 2006 The Washington Post Company