Testimony 

Before the Subcommittee on Airland, 

Committee on Armed Services, 

U. S. Senate

United States Government Accountability Office

GAO

For Release on Delivery 

Expected at 2:00 p.m. EDT 

Thursday, April 14, 2005 AIR FORCE 

PROCUREMENT 

Protests Challenging Role of 

Biased Official Sustained 

Statement of Daniel I. Gordon, Managing Associate General 

Counsel for Procurement Law 

GAO-05-436T
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

www.gao.gov/cgi-bin/getrpt?GAO-05-436T.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Daniel I. 

Gordon at 202-512- 8219 or 

gordond@gao.gov 

Highlights of GAO-05-436T, a testimony to 

the Airland Subcommittee, Senate 

Committee on Armed Services 

April 14, 2005

AIR FORCE PROCUREMENT

Protests Challenging Role of Biased Official 

Sustained 

The Federal Acquisition Regulation (FAR) provides that government 

business shall be conducted in a manner above reproach and, except as 

authorized by statute or regulation, with complete impartiality and with 

preferential treatment for none. The documents supporting Mrs. Druyun’s 

criminal conviction establish that she was biased in favor of Boeing. Where, 

as here, the record establishes that a procurement official was biased in 

favor of one offeror, the need to maintain the integrity of the procurement 

process requires that GAO sustain the protests unless there is compelling 

evidence that the bias did not prejudice the protesters. 

In light of the admission by Mrs. Druyun that she was biased in favor of 

Boeing, we sustained the protests challenging the C-130 contract award and 

the protest challenging the small diameter bomb because the Air Force failed

to show that her bias did not affect the contract award decisions, or 

otherwise prejudice the protesters. 

In the case of the C-130, the record established that Mrs. Druyun functioned 

as the lead procurement official throughout the procurement. GAO rejected 

the Air Force’s assertion that there was no evidence that Mrs. Druyun 

influenced the source selection evaluation team. Similarly, in light of the 

failure to treat offerors fairly during contract negotiations, GAO rejected the 

Air Force’s assertion that the evaluation process had been conducted 

properly. Finally, because (1) the contracting officer directed the evaluators 

to destroy portions of the evaluation record, (2) the agency failed to have 

meaningful discussions with all of the offerors, and (3) the evidence showed 

Druyun’s biased influence throughout the source selection process, GAO 

could not reasonably determine which of the four proposals should have 

been selected for award. The record therefore failed to establish that any 

one of the protesters was not prejudiced as a result of the various 

procurement flaws. Accordingly, GAO sustained the C-130 protests. 

In the case of the small diameter bomb protest, the position of the Air Force 

was that the protester was not prejudiced by Mrs. Druyun’s acknowledged 

bias in favor of Boeing because she “did not play a significant role” in the 

decision to change technical requirements. Contrary to the position of the 

Air Force, however, the record showed that Mrs. Druyun was significantly 

involved in the decisionmaking process that culminated in changes to 

technical requirements and the deletion of related evaluation criteria. In 

light of Mrs. Druyun’s acknowledged bias in favor of Boeing and GAO’s 

conclusion that she was materially involved in the decisionmaking process, 

GAO concluded that the record failed to establish that Druyun’s bias did not 

prejudice the protester. Accordingly, GAO sustained the protest. 

Darlene Druyun, a former highranking Air Force procurement 

official convicted of violating a 

conflict of interest statute, 

admitted to bias in favor of The 

Boeing Company on various 

procurements. GAO subsequently 

received protests from other firms 

challenging the alleged improper 

influence of Mrs. Druyun regarding 

contracts awarded by the Air Force 

under the small diameter bomb 

program and the C-130 avionics 

modernization upgrade program. 

The Competition in Contracting Act 

of 1984 provides statutory authority 

for GAO’s bid protest function. 

Consistent with standard practices, 

GAO reviewed all available 

documentation, held hearings to 

receive testimony from witnesses, 

considered arguments from all 

interested parties, and issued 

decisions on each of the protests. 

What GAO Recommends

GAO recommended that the Air 

Force recompete the installation 

phase of the C-130 contract. GAO 

also recommended that the Air 

Force conduct a thorough analysis 

of the possibility of recompeting 

the entire contract effort. 

As to the small diameter bomb, 

GAO recommended that the Air 

Force conduct a competitive 

procurement for its moving target 

requirement. 
Page 1 GAO-05-436T 

Mr. Chairman and Members of the Subcommittee: 

Thank you for the opportunity to be here today to discuss the bid protest 

decisions recently issued by the Government Accountability Office (GAO) 

in response to protests challenging the actions of the Air Force under two 

programs—the C-130 avionics modernization upgrade (AMP) program and 

the small diameter bomb program. The protests were based on 

information disclosed by Darlene Druyun, formerly the Air Force’s 

Principal Deputy Assistant Secretary for Acquisition, in connection with 

her October 2004 criminal conviction for violation of the statutory conflict 

of interest provisions codified at 18 U.S. C. § 208(a) (2000). 

The Competition in Contracting Act of 1984 (CICA) provides statutory 

authority for GAO’s bid protest function. GAO has issued implementing 

regulations establishing the procedural framework for our bid protest 

forum in Title 4, Part 21, of the Code of Federal Regulations. GAO provides 

an objective, independent, and impartial forum for the resolution of 

disputes concerning the awards of federal contracts. Our procedures 

provide all interested parties—the protester, the awardee and the 

contracting agency—an opportunity to present their positions prior to 

GAO’s resolution of the protest. 

GAO’s bid protest decisions differ from the reports GAO issues in 

connection with its program audits and reviews. In this regard, our protest 

decisions do not address broad programmatic issues such as whether or 

not a weapons program is being managed effectively or consistent with 

best practices; instead, our bid protest decisions address specific 

allegations raised by unsuccessful offerors challenging particular 

procurement actions as contrary to procurement laws and regulations. 

Our protest decisions are necessarily limited to the record as we 

developed it, largely shaped by the allegations raised by the protesters and 

the responses but forward by the agency and awardee. 

With that background, my testimony today will summarize our two 

recently issued decisions concerning allegations of improper influence by 

Darlene Druyun. Our testimony is based on the public version of our 

decisions. A limited amount of information that is proprietary to the 

protesters, source selection sensitive, or law enforcement sensitive has 

been redacted from these decisions, but none of the redacted information 

is critical to understanding the decisions. 
Page 2 GAO-05-436T 

As was widely publicized, in October 2004 Darleen Druyun pled guilty to 

violating the conflict of interest provisions of 18 U.S.C. § 208(a) based on 

the fact that she engaged in employment negotiations with The Boeing 

Company while she was negotiating on behalf of the Air Force for the 

lease of 100 Boeing KC 767A tanker aircraft. In addition to her 

employment negotiations, documents submitted by Druyun in connection 

with the criminal proceedings establish that, in 2000, Druyun contacted 

Boeing personnel to request that Boeing provide employment for both 

Druyun’s daughter and the daughter’s boyfriend (who subsequently 

became Druyun’s son-in-law). In response to these requests, Boeing 

created a position for Druyun’s daughter and hired both her daughter and 

future son-in-law in the fall of 2000. In the documents filed in the criminal 

proceedings, Druyun further states that her decisions in matters affecting 

Boeing were “influenced by her perceived indebtedness to Boeing for 

employing her future son-in-law and daughter,” and that with regard to the 

contract awarded in the C-130 AMP procurement, “an objective selection 

authority may not have selected Boeing.” 

Following Druyun’s disclosures in October 2004, agency-level protests 

were filed at the Air Force by the three offerors who unsuccessfully 

competed for the C-130 contract: Lockheed Martin Aeronautics Company, 

L-3 Communications Integrated Systems, (the successor-in-interest to 

Raytheon Company Aircraft Integration Systems), and BAE Systems 

Integrated Defense Solutions, Inc. The Assistant Secretary of the Air Force 

for Acquisition subsequently advised each of the protesters that “the Air 

Force is of the opinion that the protest is more appropriately considered 

by the Government Accountability Office,” and that “the Air Force will not 

decide the protest.” Each of the companies subsequently filed protests 

with our Office maintaining that Druyun’s recently disclosed bias in favor 

of Boeing, along with the information previously disclosed to the 

protesters regarding the agency’s purported bases for rejecting their 

proposals, demonstrated that their proposals were not evaluated in a fair 

and unbiased manner. 

The Protest Decision 

Regarding the 

C-130 Avionics 

Modernization 

Program (AMP) 

Background 
Page 3 GAO-05-436T 

In response to the protests, the Air Force argued that notwithstanding 

Druyun’s acknowledged bias in favor of Boeing, the award to Boeing was 

proper because “there is no evidence that Mrs. Druyun influenced the 

SSET [source selection evaluation team]” and that, overall, “the evaluation 

process was conducted properly and in accordance with the evaluation 

criteria.” 

The Federal Acquisition Regulation (FAR), § 3.101-1, provides that: 

Government business shall be conducted in a manner above reproach and, 

except as authorized by statute or regulation, with complete impartiality 

and with preferential treatment for none. Transactions relating to the 

expenditure of public funds require the highest degree of public trust and 

an impeccable standard of conduct. The general rule is to avoid strictly 

any conflict of interest or even the appearance of a conflict of interest in 

Government-contractor relationships. 

Where, as was the case here, the record establishes that a procurement 

official was biased in favor of one offeror, we believe that the need to 

maintain the integrity of the procurement process requires that we sustain 

the protests unless the agency demonstrates that the bias did not affect the 

contract award decision--in legal terms, that the bias did not prejudice the 

protesters. 

As discussed above, the documents supporting Druyun’s criminal 

conviction establish that she was biased in favor of Boeing. In reviewing 

the protest allegations, GAO conducted a 3-day hearing on the record 

during which testimony was provided by nine government witnesses. The 

record developed by GAO, including the hearing testimony, established the 

following key points. First, Druyun functioned as the lead procurement 

official throughout this procurement and employed a forceful management 

style. In this particular procurement, she left no doubt about who was in 

control from the outset. Before the evaluators had even completed their 

initial proposal review, Druyun requested that they come to Washington, 

D.C. to discuss the “status” of their evaluations; this meeting was 

subsequently referred to as the “15 September massacre.” From September 

15, 2000 through the first request for final proposal revisions in February 

2001, Druyun had the evaluators come to Washington five times to brief 

her on the ongoing evaluations; during these briefings, Druyun expressly 

or implicitly directed multiple changes to the evaluators’ ratings, many of 

The Legal Standard 

GAO’s Review of the 

Record 
Page 4 GAO-05-436T 

which favored Boeing. In our decision, we identify specific examples of 

Druyun’s directions regarding each of the offerors’ proposals. 

Also, the record shows that following the request for final proposal 

revisions, but before the source selection process was complete, the 

contracting officer sent an e-mail to a recipient list that included virtually 

everyone involved in the source selection process, directing that the 

recipients “clean up” and “delete” various portions of the evaluation 

record. Specifically, this e-mail directed the recipients to “delete any 

comments where evaluators/advisors have suggested ratings,” explaining 

that “[i]f the rating doesn’t match the suggestion, we have protest fodder.” 

The e-mail also specifically directed the evaluators to “[d]elete any 

derogatory or exceedingly glowing comments.” 

The first round of final proposal revisions was submitted on March 2. On 

March 9, the contracting officer reopened discussions and requested a 

second round of proposal revisions. At the GAO hearing, the contracting 

officer unambiguously testified that discussions were reopened to permit 

Boeing to “take care of” a “problem” in its cost proposal, explaining that, 

at that point, Boeing’s proposal failed to comply with instructions the 

agency had previously given the offerors. No substantive questions were 

asked of any other offeror during these discussions. Nonetheless, during 

the GAO hearing, agency witnesses identified specific aspects of the 

protesters’ final proposals that should have been brought to their 

attention, including aspects of the protesters’ proposals that appear very 

similar to the “problem” Boeing was permitted to “take care of.” 

The second round of final proposal revisions was submitted on March 19. 

Thereafter, the source selection evaluation team briefed Druyun on the 

evaluations of final proposals. During this briefing the cost team was 

directed to review their analysis to “assure its accuracy.” Upon receiving 

that direction, the cost team reduced Boeing’s evaluated price and 

increased Lockheed’s evaluated price. Additionally, in a subsequent 

meeting with Druyun, the source selection evaluation team described a 

specific approach to performance that Boeing had proposed as one “which 

tends to induce problems.” Druyun directed that this description be 

crossed out of the evaluation record and replaced with the words: “Boeing 

will work out details post award.” 

Based on the record discussed above, we rejected the Air Force’s assertion 

that there was no evidence that Mrs. Druyun influenced the source 

selection evaluation team. Similarly, in light of the failure to treat offerors 

fairly regarding discussions, we rejected the Air Force’s assertion that the 
Page 5 GAO-05-436T 

evaluation process had been conducted properly. Finally, because the 

contracting officer directed the evaluators to destroy various portions of 

the evaluation record and the agency failed to conduct meaningful 

discussions with all of the offerors, along with the evidence of Druyun’s 

influence throughout the source selection process, we could not 

reasonably determine which of the four proposals should have been 

selected for award. We concluded that the record failed to establish that 

any one of the protesters was not prejudiced by the various procurement 

flaws. Accordingly, we sustained the protests. 

Ordinarily, where our Office finds fundamental flaws in an agency 

procurement, we will recommend that the agency reopen negotiations 

with all competitive range offerors, conduct meaningful discussions, 

request final revised proposals, and evaluate those proposals in a fair and 

unbiased manner. Here, however, the contract was awarded more than 3 

years ago, and performance has been ongoing since that time. In the 

course of developing the protest record, the Air Force reported that while 

recompetition of the installation phase of the contract is feasible, 

recompetition of the entire contract would not be in the best interests of 

the taxpayer or consistent with national security concerns. 

Based on the Air Force’s acknowledgment that recompetition of the 

installation phase of the contract was feasible, we recommended that the 

agency recompete those requirements. In light of the broader concerns 

raised by the Air Force, we were reluctant to recommend recompetition of 

the entire contract effort. Nonetheless, we had some concern that the Air 

Force’s position regarding recompetition of the entire effort was forged in 

the heat of litigation, and may not reflect a completely objective review. 

Accordingly, we recommended that the agency conduct and document a 

thorough analysis of the competing concerns and provide that analysis to 

our Office. In the event the agency ultimately determines that the broader 

concerns preclude recompetition of the entire contract effort, we 

recommended that each of the protesters be reimbursed the costs incurred 

in preparing and submitting their proposals. We also recommended that 

the protesters be reimbursed for their costs of filing and pursuing the 

protests. 

Recommendation 
Page 6 GAO-05-436T 

We turn now to the Air Force’s award of a contract to Boeing under the 

small diameter bomb program. Lockheed Martin Corporation was the only 

competitor for this effort, and following the October 2004 disclosure of 

Druyun’s bias, filed a protest alleging that Druyun improperly manipulated 

certain program requirements and the related evaluation factors in a 

manner that favored Boeing. 

In addition to Druyun’s feeling of “indebtedness” to Boeing due to Boeing’s 

employment of her daughter and future son-in-law, the record we 

developed, which included a hearing at GAO during which five 

government witnesses and one Lockheed Martin witness testified, 

established the following key points. The small diameter bomb program 

initially contemplated an evaluation of offerors’ capabilities against both 

fixed and moving targets; early in the procurement process (during the 

first few months of 2002), Lockheed Martin was perceived as having a 

“strength” with regard to the moving target requirements and Boeing was 

considered “weak” in this area; in May 2002, most of the requirements 

associated with moving targets and the associated evaluation factors were 

deleted; thereafter, Boeing was selected for award without consideration 

of its capabilities regarding the deleted moving target requirements. At the 

time our decision was issued, the Air Force was in the process of adding 

the previously deleted requirements to Boeing’s contract on a sole-source 

basis. 

In responding to Lockheed’s protest, the Air Force maintained that Druyun 

“did not play any significant role” in the decision to change the small 

diameter bomb’s technical requirements and, therefore, Lockheed was not 

prejudiced by Druyun’s acknowledged bias in favor of Boeing. 

Contrary to the agency’s assertion, the contemporaneous record 

established that Druyun was significantly involved in the decisionmaking 

process that culminated in the May 2002 changes to the technical 

requirements and deletion of the related evaluation criteria. As discussed 

in our decision, Druyun was the de facto lead acquisition official during 

the period in which the changes were made. In that capacity, she received 

briefings from the competing offerors, directed the source selection 

evaluation team to perform various activities, directed an independent 

technical review of Lockheed Martin’s technology applicable to moving 

targets, was directly involved in other changes made to the requirements 

for fixed targets, and contacted Raytheon to request that Raytheon 

communicate with Boeing. Following Druyun’s contact, Raytheon 

The Protest Decision 

Regarding the Small 

Diameter Bomb 

The Agency’s Position and 

GAO’s Conclusion 
Page 7 GAO-05-436T 

provided support to Boeing in its efforts to meet the small diameter bomb 

requirements. 

On the basis of our review of the protest record, we rejected the Air 

Force’s assertion that Druyun was not materially involved in the process 

culminating in the May 2002 changes to the technical requirements. 

As discussed above, the FAR provides that procuring agencies must 

strictly avoid conflicts of interest or even the appearance of conflicts in 

Government-contractor relationships and, where, as here, the record 

establishes that a procurement official was biased in favor of one offeror, 

the need to maintain the integrity of the procurement process requires that 

we sustain the protest unless the agency demonstrates that the bias did 

not prejudice the protester. 

In light of Druyun’s acknowledged bias in favor of Boeing and our 

determination that she was materially involved in the decisionmaking 

process culminating in deletion of the moving target requirements, along 

with the fact that Lockeed Martin was perceived as having a “strength” and 

that Boeing was “weak” regarding the deleted requirements, we 

concluded that the record failed to establish that Druyun’s bias did not 

prejudice the protester. Accordingly, we sustained the protest. 

At the time our decision was issued, the Air Force had not yet amended 

Boeing’s contract to add the previously deleted requirements regarding 

moving targets. Accordingly, we recommended that the Air Force conduct 

a competitive procurement to meet those requirements. Consistent with 

the provisions of CICA, we also recommended that Lockheed Martin be 

reimbursed its costs of filing and pursuing the protest. 

Finally, Lockheed requested that we recommend reimbursement of the 

proposal preparation costs Lockheed incurred in competing for the 

contract awarded to Boeing. As discussed in our decision, we deferred 

ruling on that request, pending the Air Force’s review of certain concerns 

regarding potential conflict of interest issues relating to a former Brigadier 

General who, after leaving the Air Force, was involved in Lockheed’s 

proposal preparation efforts. 

The Legal Standard and 

Conclusion 

Our Recommendation 
Page 8 GAO-05-436T 

Mr. Chairman, this concludes our prepared statement. I would be happy to 

respond to any questions regarding our bid protest decisions that you or 

other Members of the Subcommittee may have. 

(120425) 
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