Report Finds Air Force Officers Steered Contract

Maj. Gen. Stephen M. Goldfein
Maj. Gen. Stephen M. Goldfein, vice director of the joint staff (U.S. Air Force)
By Josh White
Washington Post Staff Writer
Friday, April 18, 2008

Sitting at the head of the table, Air Force Maj. Gen. Stephen Goldfein, the highest-ranking officer in the room, leaned forward and told the officers and others assembled before him that they should steer a multimillion-dollar Air Force contract to a company named Strategic Message Solutions.

"I don't pick the winner, but if I did, I'd pick SMS," Goldfein said to the seven-person group that was selecting a contractor to jazz up the Air Force's Thunderbirds air show with giant video boards, according to a lengthy report by Defense Department's inspector general. The head of the selection team almost immediately "caved," giving in to what he believed was a fixed process, while another member of the team called it "the dirtiest thing" he had ever experienced.

It was during that meeting in November 2005, according to the 251-page report, obtained by The Washington Post, that a controversial $50 million contract was awarded to a company that barely existed in an effort to reward a recently retired four-star general and a millionaire civilian pilot who had grown close to senior Air Force officials and the Thunderbirds.

In a probe that lasted more than two years, investigators concluded that Goldfein and others worked inside the Air Force contracting system to favor SMS and its owners, despite an offer by the company that was more than twice as expensive as a competing bid.

Goldfein, who is now vice director of the Pentagon's Joint Staff, was found to have gone to great lengths to see the contract awarded to SMS, while senior Air Force leaders socialized with the company's partners. According to the report, Goldfein even arranged for President Bush to record a video testimonial in the White House Map Room that was included in the SMS contract proposal, demonstrating the company's credibility and access.

The report offers a blow-by-blow account of how a small Air Force contract spun out of control, highlighting conflicts of interest in the selection process, officers stacking the deck in favor of friends, and others influencing a system designed to eliminate such favoritism in spending taxpayer dollars.

"The investigation found that the December 2005 award to SMS was tainted with improper influence, irregular procurement practices, and preferential treatment," according to a redacted copy of the report. "Lower priced offers from qualified vendors and capabilities in-house were bypassed in an apparent effort to obtain services from [redacted], president of SMS, who had a longstanding relationship with senior Air Force officers and members of the Thunderbirds."

Goldfein and four unidentified officers have received administrative punishments, and investigators are scrutinizing the 99th Contracting Squadron at Nellis Air Force Base in Nevada in light of "irregularities" and "systemic weaknesses" that appear to plague the unit.

Goldfein declined to comment, but he told investigators that he "never interfered with the evaluation or selection process and never directed anyone to do or not do anything." But other members of the selection team said the process seemed "fixed" from the beginning.

"I am deeply disappointed that our high standards were not adhered to," Air Force Secretary Michael W. Wynne said yesterday.

The inspector general's report comes during a stretch of difficult news for the Air Force, including recent problems with the handling of nuclear weapons and nuclear missile technologies and the discovery of significant flaws in older F-15 fighter jets. While the Thunderbirds show contract was $50 million -- minor compared with billion-dollar aircraft contracts -- the inappropriate actions came just a year after former Air Force contracting official Darleen A. Druyun pleaded guilty to favoring Boeing in a tanker deal and was sent to prison.

Pentagon press secretary Geoff Morrell said Defense Secretary Robert M. Gates is aware of the findings. "He is satisfied the matter has been thoroughly investigated and the Air Force is taking appropriate disciplinary action and corrective measures," Morrell said.

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