Boeing's Sloppy Procurement Behavior
A top NASA official asked Boeing if it would protest a major contract it lost. Boeing then tried to profit from the inside information, Washington Post
“Boeing did not protest the award of the lunar lander contract — which was awarded on April 30 to three bidders for a total of nearly $1 billion: a team led by Jeff Bezos’s Blue Origin; the defense contractor Dynetics; and Elon Musk’s SpaceX. (Bezos owns The Washington Post.) But it did something that NASA officials found just as alarming: After Loverro told Chilton that Boeing would not win the award, the company attempted to revise and resubmit its bid. That last-ditch effort to win one of the contracts was so unusual, given that the time for bids had passed, that members of the NASA committee considering the award feared it may amount to a violation of procurement regulations. They alerted the agency’s inspector general, who in turn referred the matter to the Justice Department. The U.S. attorney’s office in the District of Columbia has impaneled a grand jury and is investigating, officials said.”
Keith’s update: In this well-researched article we learn that former HEOMD AA Doug Loverro was concerned that Boeing would file a protest when it did not win and that the protest would slow down NASA’s fast-paced effort to land humans on the Moon by 2024. So Loverro called to see if Boeing was going to protest a loss. In hindsight, not the best action to take – but he was not the selecting official so it did not affect the procurement. It is what Boeing did after that call that is highly problematic – possibly illegal – not what Loverro did.
Interesting article. Nice to get additional information on what occurred. Seems well researched. May be worth noting that the Washington Post is owned by Jeff Bezos, who also owns Blue Origin, one of the successful bidders.
If you had bothered to read the article you’d see that it says “a team led by Jeff Bezos’s Blue Origin; the defense contractor Dynetics; and Elon Musk’s SpaceX. (Bezos owns The Washington Post.)”. And the article’s author, Christian Davenport, is beyond reproach. I see what you are insinuating here. Don’t do it again.
Revealing the outcome of a procurement to one of the bidders prior to the official selection isn’t illegal?
He was not a selecting official and the source board had already made its decision.
Which, I think, would probably make it legal in a technical sense. But based on how NASA handled contracts I’ve been involved in, it could definitely be against policy.
Exactly.
so why’d Doug “fall on his sword” ?
He made a mistake – not an illegal one – but a mistake. As best I understand things he was afraid that Boeing would delay everything so he checked to make sure. But then Boeing did the wrong (probably illegal) thing and monkeyed with their proposal. That is not why Doug called. He called to see if they were going to make a fuss. And leaders sometimes fall on their sword – because they are leaders – so that the team can move ahead. That is what leaders do. That is what Doug did.
I get that, and I agree with your assessment and your sentiment. Why then resign ? Is that cutting off your nose in spite of your face; upholding an impossibly high standard ? Did it further the original motivation (as we see it) ? or hinder it ?
Ask Doug.
So if it wasn’t illegal given he wasn’t selecting official and source board had finished their decisions and I assume the IG wasn’t going to invalidate the HLS procurement why did Doug feel he needed to resign? I can’t read the article due to paywall so I don’t have all the details but if Doug was just trying to avoid boeing from protesting and delaying things then I don’t understand why he had to go.
It would seem that Loverro felt that he made an error which is different than breaking the law but when you want to set a perfect standard, you bow out when you make a mistake.
very admirable. shame to have lost him over this if that is his character and standard he holds himself to. imagine what sort of example and influence to change the culture of NASA (for the better) he could have had long term.
Only two problems: 1. It was not his job to let Boeing know. That was a ethical violation, not illegal. 2. He trusted Boeing. Never, ever trust Boeing.
I’ve lost track of all this, I don’t really read all the articles and details (I rely on Keith and Mark for summary). However, I think why is it so difficult to build a spaceship? And I’m not talking about the engineering and craftsman skills.
Ask Elon. He has had a hard time building space ships. So he builds lots of them until he gets them right. And his spaceships cost less. Boeing Is tuck on old ways of doing things. And it shows.
Both Starliner and the 737 MAX starkly reveal the incompatibility between new tech and old ways.
When I start flying again, will it be wise to ride in a Boeing aircraft? Today’s upbeat words from FAA Administrator Dickson notwithstanding, I’m not so sure. It was the FAA, after all, that certified these vehicles in the first place. Are they stuck in the old ways, as well?
https://www.faa.gov/news/up…
It probably tells you a little about Boeing’s power in the US space industry that a senior NASA official was worried enough to want to essentially verify if the outcome of the procurement process was okay by them. Mind-boggling really.
An amazingly dumb thing to do but what really matters here is the implications about the balance of power between Boeing and NASA.
Boeing got the power by placing jobs in Northern Alabama. The view on things between them and the senior Alabama senator is quite similar.
My understanding from reading the news sources was not that he was checking not on whether the outcome ‘was okay by them’, but rather were they going to cause a headache and halt the entire program while lawyers and judges argued about that outcome.
It explains something that I always wondered about in Loverro’s HEO farewell letter:
“I took such a risk earlier in the year because I judged it necessary to fulfill our mission. Now, over the balance of time, it is clear that I made a mistake in that choice for which I alone must bear the consequences.”
The “over the balance of time” part of his letter always stood out to me, as I felt that the carefully chosen wording hinted at something deeper going on, rather than just the usual “I realize now in hindsight that I made a mistake” which is how these type of statements are usually worded. As it turns out, the deeper part of the story seems to be that he presumably knew that it was against the rules or at least against accepted practice to tell Boeing that they had lost, but that since the deadline had passed he apparently felt that the risk was minimal, bureaucratic if anything, and that the greater good would be served by trying to thwart or at least be able to prepare for a complaint from Boeing. He may not have even considered the possibility that Boeing would pull the stunt that they did which drew an investigation. But “over the balance of time” as he saw the unfolding mess play out, he decided that the greater good was for him to resign rather than possibly create a drag on the agency during the months that an investigation would take, during which time he would likely not be able to explain what actually happened.
The thing that gets me, Boeing expected NASA to let them amend the bid. That’s why they tried. Why would they expect that to happen? Something very bad has happening at NASA for a long time. These days biding is a formality.