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68–083 PDF 2011

S. HRG. 112–79 

THE RESULTS OF THE INVESTIGATION BY THE 

DEPARTMENT OF DEFENSE AND THE DEPARTMENT OF THE AIR FORCE INTO THE RELEASE 

OF PROPRIETARY DATA IN THE KC–X COMPETITION 

HEARING 

BEFORE THE

COMMITTEE ON ARMED SERVICES 

UNITED STATES SENATE 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

JANUARY 27, 2011 

Printed for the use of the Committee on Armed Services 

( 

Available via the World Wide Web: http://www.fdsys.gov/ 

COMMITTEE ON ARMED SERVICES 

CARL LEVIN, Michigan, Chairman 

JOSEPH I. LIEBERMAN, Connecticut 

JACK REED, Rhode Island 

DANIEL K. AKAKA, Hawaii 

E. BENJAMIN NELSON, Nebraska 

JIM WEBB, Virginia 

CLAIRE MCCASKILL, Missouri 

MARK UDALL, Colorado 

KAY R. HAGAN, North Carolina 

MARK BEGICH, Alaska 

JOE MANCHIN III, West Virginia 

JEANNE SHAHEEN, New Hampshire 

KIRSTEN E. GILLIBRAND, New York 

RICHARD BLUMENTHAL, Connecticut 

JOHN MCCAIN, Arizona 

JAMES M. INHOFE, Oklahoma 

JEFF SESSIONS, Alabama 

SAXBY CHAMBLISS, Georgia 

ROGER F. WICKER, Mississippi 

SCOTT P. BROWN, Massachusetts 

ROB PORTMAN, Ohio 

KELLY AYOTTE, New Hampshire 

SUSAN M. COLLINS, Maine 

LINDSEY GRAHAM, South Carolina 

JOHN CORNYN, Texas 

DAVID VITTER, Louisiana 

RICHARD D. DEBOBES, Staff Director 

DAVID M. MORRISS, Minority Staff Director 

(II) 

C O N T E N T S 

CHRONOLOGICAL LIST OF WITNESSES 

THE RESULTS OF THE INVESTIGATION BY THE DEPARTMENT OF DEFENSE AND THE

DEPARTMENT OF THE AIR FORCE INTO THE RELEASE OF PROPRIETARY DATA IN

THE KC–X COMPETITION

JANUARY 27, 2011

Page 

Masiello, Maj. Gen. Wendy M., USAF, Program Executive Officer for Combat 

and Mission Support, Office of the Assistant Secretary of the Air Force 

for Acquisition ...................................................................................................... 7 

Shirley, Steven D., Executive Director, Department of Defense Cyber Crime 

Center .................................................................................................................... 10 

(III) 

(1) 

THE RESULTS OF THE INVESTIGATION BY 

THE DEPARTMENT OF DEFENSE AND THE 

DEPARTMENT OF THE AIR FORCE INTO 

THE RELEASE OF PROPRIETARY DATA IN 

THE KC–X COMPETITION 

THURSDAY, JANUARY 27, 2011 

U.S. SENATE

COMMITTEE ON ARMED SERVICES

Washington, D.C. 

The committee met, pursuant to notice, at 9:33 a.m. in room SD– 

G50, Dirksen Senate Office Building, Senator Carl Levin (chairman) presiding. 

Committee members present: Senators Levin, McCaskill, 

McCain, Inhofe, Sessions, Graham, Wicker, and Brown. 

Committee staff members present: Richard D. DeBobes, staff director; and Leah C. Brewer, nominations and hearings clerk. 

Majority staff members present: Creighton Greene, professional 

staff member; Peter K. Levine, general counsel; and Jason W. 

Maroney, counsel. 

Minority staff members present: Pablo E. Carrillo, minority investigative counsel; David M. Morriss, minority counsel; and Christopher J. Paul, professional staff member. 

Staff assistants present: Kathleen A. Kulenkampff, Hannah I. 

Lloyd, and Brian F. Sebold. 

Committee members’ assistants present: Tressa Guenov, assistant to Senator McCaskill; Joanne McLaughlin, assistant to Senator 

Manchin; Anthony J. Lazarski, assistant to Senator Inhofe; T. 

Finch Fulton, assistant to Senator Sessions; and Sarah Drake, assistant to Senator Wicker. 

OPENING STATEMENT OF SENATOR CARL LEVIN, CHAIRMAN 

Chairman LEVIN. Good morning, everybody. 

The committee meets today to address the inadvertent release of 

proprietary data in the process of the KC–X tanker procurement. 

We recognize that the Air Force is currently conducting a source 

selection in this procurement, and we need to avoid any action, 

comment, or answer that might compromise that source selection. 

This hearing will focus on, first, the nature of the information released by the Air Force; second, the steps that the Air Force took 

to determine what happened, and to determine if there was any 

damage to the fairness and integrity of the source selection process; 

and third, any remedial actions taken by the Air Force. 

2 

I would ask both Senators and witnesses to avoid any lines of inquiry that could compromise the source selection process. 

The issue that needs to be addressed is whether the Air Force 

releasing proprietary or source-selection-sensitive data to the competitors during the ongoing third tanker procurement process has 

damaged that process. 

My understanding of the current situation is as follows: Boeing 

and the European Aeronautic Defense and Space Company (EADS) 

are competing for the contract to furnish the next generation strategic refueling contract, called the KC–X, for the Air Force. 

As part of this competition, the Air Force is evaluating the capability of the competitors’ aircraft in a model referred to as the Integrated Fleet Aerial Refueling Assessment (IFARA). In this analysis, the Air Force is evaluating potential KC–X aircraft using several postulated real-world scenarios. In deriving an IFARA score, 

the Air Force uses the model to compare candidate aircraft with 

the current tanker, the KC–135R. 

As part of the official discussions, within the current competition, 

the Air Force intended to share with each contractor the Air Force 

IFARA assessment on that contractor’s aircraft, to ensure that 

there were no substantive disagreements on the calculations on the 

score. 

In November 2010, personnel working for the Air Force Program 

Office inadvertently sent the IFARA data files for the Boeing offer 

and the EADS offer to both contractors. After the error was identified, the Department of Defense (DOD) and the Air Force investigated the incident and determined that some IFARA data had 

been viewed by one of the two contractors. The Air Force then determined that comparable data should be released to the other contractor, in the effort to ensure that the competition could continue 

on a level playing field, and it was released. 

Now, joining us today are Major General Wendy Masiello, Program Executive Officer (PEO) for Combat and Mission Support, Office of the Assistant Secretary of the Air Force for Acquisition; and 

Steven Shirley, Executive Director for the DOD Cyber Crime Center. These witnesses have been selected because they have a detailed knowledge of issues regarding the specific subject matter of 

this hearing. 

I want to extend a welcome to our witnesses. Thank you both for 

appearing before this committee this morning. I know that it took 

some doing to get here, given the snow circumstances. 

Over the last month, the staff has met on two occasions with 

DOD officials familiar with the release of information and the Air 

Force investigation. 

Also, I made an offer to the chief executive officer (CEO) of each 

of the companies to submit written statements to the committee 

addressing these issues, should they choose to do so. We have received a submission from each of the companies, and without objection, we will make those two submissions part of the record at this 

time. 

[The prepared statements of Mr. Muilenburg and Mr. O’Keefe 

follow:] 

3 

PREPARED STATEMENT BY DENNIS A. MUILENBURG

Mr. Chairman, thank you for this opportunity to provide a statement to the Senate Armed Services Committee regarding the release of contractor proprietary data 

in the KC–X competition. I am not in a position to comment on specific actions 

taken by another company. I can, however, provide the facts regarding how Boeing 

handled the data it received. In all respects, Boeing’s conduct was consistent with 

the highest standards of ethically responsible behavior. 

• On November 1 of last year, Boeing was notified by the Air Force that 

a classified Integrated Fleet Aerial Refueling Assessment (IFARA) package 

was available for Boeing to receive from Wright Patterson Air Force Base 

(WPAFB). Boeing understood the package contained Boeing’s interim 

IFARA evaluation data and score. Boeing retrieved the package and 

brought it to St. Louis for review and analysis, following strict protocol for 

the transport and handling of classified data. 

• An analyst on the Boeing tanker program received the IFARA data package from Boeing Security in St. Louis that evening, and noted there were 

two disks and a cover letter. The analyst took the materials to a classified 

lab for review with another Boeing analyst. One of the analysts inserted the 

first disk into a Boeing classified laptop. The analyst reviewed the file 

structure and located the Excel file they believed would contain the Air 

Force Fleet Effectiveness Value (FEV) for Boeing. The analysts opened this 

file, confirmed it contained the Boeing KC–767 FEV score, and printed this 

classified table. An analyst then copied the contents of this first disk to the 

classified laptop hard drive, and removed the first disk from the computer. 

• The analyst then inserted the second disk into the laptop, and reviewed 

the file structure of that disk more closely in an attempt to discern what 

the difference was between the first and second disks. The analyst then noticed that the parent folder name of the second started with the prefix ‘‘K– 

30B.’’ At that point, the Boeing analysts became concerned that the second 

disk could potentially contain competitor data . The analysts immediately 

removed the second disk from the laptop drive, and confirmed that the titles on the first disk did indeed contain references to ‘‘K–67B’’ and the titles 

on the second disk contained references to ‘‘K–30B.’’ At no point did the 

Boeing analysts open any files on the second (‘‘K–30B’’) disk, nor did they 

make any copies or print outs of the second disk data. Our analysts did not 

forward the files or in any other way provide further access to the data to 

any other person. 

• The cover letter, both disks, as well as the classified laptop used to open 

them, were all immediately sealed by security and locked in classified safes, 

and the analysts contacted the appropriate Boeing personnel to report the 

incident. Boeing notified the Air Force by phone and email that night, and 

received instructions the next day to repackage the materials and return 

them to WPAFB in Dayton. Boeing followed this direction, and couriered 

the materials back to Dayton that same day (November 2). 

• On November 8, the Air Force requested that Boeing also deliver its classified laptop computer to the Defense Computer Forensics Laboratory in 

Maryland on November 10. Boeing complied with this direction. 

Boeing’s behavior in this instance is emblematic of our conduct throughout this 

competition. We have competed fairly and aggressively. We have not sought extensions of time, we have complied with every deadline, and we have followed the strictures and procedures established by the Air Force acquisition authority to the letter. 

You can be sure that Boeing will do everything in its power to ensure the integrity 

of this competition because of its importance to our USAF customer and our military 

men and women that we are honored to serve. 

Mr. Chairman, Senator McCain, and members of the committee: American industry relies on the integrity of the Defense Department’s acquisition processes. Your 

review of this matter is greatly appreciated. 

PREPARED STATEMENT BY SEAN O’KEEFE

Chairman Levin, Senator McCain, and members of the committee, I am pleased 

to provide a statement to the committee concerning the U.S. Air Forces’ inadvertent 

release of Integrated Fleet Aerial Refueling Assessment (IFARA) data in the KC– 

X tanker procurement. The facts surrounding this incident, and the responsible actions taken by EADS North America, are straight forward and deserve to be clearly 

4 

understood with full transparency. We are pleased to contribute in any way to that 

full understanding. 

The constitutional role of Congress as exercised by this committee is critical, given 

that it examines issues that affect the capabilities of our men and women in uniform. I appreciate the thoughtful and careful manner in which the committee has 

engaged on the issue of data disclosure on the KC–X competition. It is my hope that 

this statement—and the information we have provided to the committee—will add 

to your understanding of what transpired, as well as the care and precision with 

which EADS North America personnel dealt with a situation that they had no part 

in creating; and concurrently the professionalism of the U.S. Air Force response to 

make every effort to preserve the integrity of the procurement for aerial refueling 

tankers. 

Many members of this committee have considerable awareness of EADS North 

America. However, some of you may not. I would like to take a moment to briefly 

tell you who we are. EADS North America is the American Division of a global, publicly-traded defense and aerospace company whose products contribute daily to the 

security of the United States. In addition, as a global aerospace company, EADS is 

the largest international customer of U.S. manufactured aerospace components, purchasing in excess of $11 billion a year in U.S. manufactured components—many 

from your respective States—that are integrated into our final products and platforms for export around the globe. 

We are proud to be a major prime contractor to the Department of the Army 

today, providing the Lakota Light Utility Helicopter which is produced in Columbus, 

MS, and today is operational in the United States, Europe, and the Pacific. Additionally, we are the largest platform provider to the Department of Homeland Security, and we have a substantial and responsible history as a supplier to other departments and agencies of the U.S. Federal Government. 

As a company, EADS understands and embraces our obligations as a responsible 

provider of world class aerospace products to the U.S. military, as well as other government agencies and a myriad of commercial customers. We are a global corporation dedicated to bringing the best aerospace products to customers across the 

globe—just like our primary competitor, the Boeing Company. For the U.S. market, 

that means not just selling our exceptional products here for a good value, but building them here in the United States, and creating jobs across this country and participating constructively in the communities in which our employees live. 

The provision of capability and value to our customers is our foundation. As a corporate partner to the U.S. Government, our guiding tenet is the operation of our 

business enterprise in a manner that upholds the highest ethical standards. Those 

standards include protecting the integrity of the procurement process. When mistakes are made, we exercise rigorous care to safeguard competition sensitive or proprietary information—whether that information concerns us or our competitors. In 

the particular matter under discussion today related to the data disclosure on the 

U.S. Air Force aerial refueling tanker aircraft competition, EADS North America 

acted correctly, quickly, and responsibly in addressing an incident that was not of 

our making. 

Clearly, it would have been preferable that the data disclosure by the U.S. Air 

Force had not happened. However, after a full and thorough review of EADS North 

America’s actions, I can tell you with high confidence that our actions following 

awareness of the disclosure were timely, responsible and appropriate. 

The facts surrounding this issue are clear. EADS North America received two 

data discs with security documentation from the U.S. Air Force. After proper inprocessing, a cleared employee inserted and opened the first disc, reviewed and 

verified the EADS North America data, and closed it. He then inserted the second 

disc, and opened the first file on the disc. On seeing that the contents of the first 

page of that file contained competitor markings he closed the disc, removed it from 

the computer, and immediately secured it under appropriate security procedures. 

The total time that the file was open was less than 15 seconds. 

Once the data disclosure was discovered, our employee immediately followed established protocols to ensure that the disclosure was contained, that the media on 

which the data were contained was controlled, and that no communication of the 

content of the disclosed data occurred. All of this was done in line with all statutory 

and regulatory guidelines, and the highest standards of business conduct. Specifically, on the night of the disclosure incident, EADS North America secured the competitive data, under two-person control, using the Defense Department approved security facility at EADS North America. We immediately reported the disclosure to 

the U.S. Air Force Contracting Officer, and carefully followed the spirit and letter 

of subsequent government direction. This included the isolation of the data and 

recusal of the individual who discovered the disclosure, as well as the prompt return 

5 

of the data and the processing equipment to the U.S. Air Force. The employee who 

opened the discs was immediately instructed that he must not disclose any information regarding the content of the file he saw on the second disc (one page), and was 

assigned to administrative duties separate from the KC–45 program, pending the 

outcome of an independent investigation, and the investigation and determination 

by the U.S. Air Force. 

Recognizing the importance of this unfortunate customer mistake in sending competitor data, I immediately initiated an independent investigation by outside counsel to review and document the events and actions taken by EADS North America 

to manage the situation. This investigation was thorough and comprehensive and 

its conclusions are the same as those reached by the U.S. Air Force’s own assessment and the government’s computer forensic analysis. We provided our complete 

and prompt cooperation with every aspect of the U.S. Air Force investigation, including providing the report of our internal investigation to the U.S. Air Force. The 

committee has received the same report of investigation of the events relating to the 

November 1, 2010 incident. We have voluntarily made our findings and reports 

available to the committee, as requested. We did this without making public statements that might exacerbate matters or adversely affect the course of this important procurement. 

Unfortunately, it appears that some are attempting to exploit the U.S. Air Force’s 

inadvertent error by speculating on events which are not in evidence. Most disconcerting is the false assertion that EADS North America held for a month the 

competitor data incorrectly sent to us. I can assure the committee that this allegation is simply untrue and is substantively contradicted by the government’s investigation and detailed forensic analysis. 

EADS North America has a single goal in the KC–X competition—to ensure that 

the information necessary to support this competitive procurement is objectively 

provided to the U.S. Air Force such that a fair and timely decision can be made on 

this critical military system. Our actions over the more than 5 years of effort in this 

competition have fully demonstrated our commitment to that objective. There is no 

place in this competition for anything other than full transparency into the process 

leading to a fair outcome. The hearing by the committee today can advance that objective by affirming through an examination of known facts that the unfortunate 

misstep of sending competitive information to both contractors was managed in good 

faith and full compliance by EADS North America and the U.S. Air Force. I stand 

by the actions taken by this company and our employees as fully compliant and responsible in accordance with the information provided as requested by the committee. 

We are prepared to answer any question this committee may have regarding this 

data disclosure matter. We wish the committee well in your important work in support of our Nation’s security and of our men and women in uniform. 

Chairman LEVIN. We appreciate both companies’ positive approach to this committee inquiry, and both of the companies’ cooperation with us. 

Senator McCain. 

STATEMENT OF SENATOR JOHN MCCAIN 

Senator MCCAIN. Thank you, Mr. Chairman. 

I thank the witnesses for their attendance and being here this 

morning. 

One of the primary duties of this committee is to engage in oversight of DOD spending and programs. While I’m unfailing in my 

support for aggressive oversight by this committee over major Defense acquisition programs, and I acknowledge that it’s the right 

and responsibility of the Chairman to schedule hearings as he 

deems fit and appropriate to ensure that the committee exercise its 

oversight responsibilities effectively, I approach today’s hearing 

with a fair bit of concern, and even a greater amount of skepticism, 

that this hearing will be beneficial to our job of oversight. 

Unfortunately, this hearing appears to be designed to produce little new information about the pending award of the Air Force’s 

KC–X tanker competition. 

6 

As we all know, the competition for the Air Force’s new aerial 

refueling tanker has been beset by problems in acquisition irregularities for years. After considerable effort to ensure the current 

competition process is as error-free and clean as possible, in November the Air Force inadvertently, and incredibly, sent data related to the competition to each of the respective bidders, that they 

should not have had. 

The natural outcome of this mistake is to ask, what difference, 

if any, did this mistake make to the competition? While I think the 

urge to dive into that question is understandable, this long, drawnout process is nearing its end, and a final announcement of the Air 

Force’s decision will be made soon. 

To the extent that November’s mistake could be argued to have 

an impact on the outcome, that seems to me to be an issue more 

appropriately addressed after the competition has run its course 

and a winner has been announced, not just weeks before the process draws to a conclusion. 

While this committee should continue to exercise aggressive oversight into the tanker award processes, the witnesses here today 

have little ability to shed real light on the facts that eventually 

need to be examined on this matter. Indeed, the tanker program 

has been delayed for more than a decade and is expected to be 

worth approximately $30 billion. With that much at stake, hearings on this topic should be designed to allow the Air Force to 

speed the delivery of the tanker, that it so badly needs, in the most 

efficient, cost-effective manner possible. 

Everyone wants to ensure that this competition is fair and above 

board, and that no party gains an unwarranted advantage. We 

know corrective actions were taken, an effort was made to assess 

damage and set things right, opinions were formed about what the 

impact was and whether it could be overcome. 

With these fundamental questions in mind and an intent to exercise restraint as we involve ourselves in this issue, I look forward 

to the testimony of the witnesses. 

I also know that the Chairman intends to publicly release, today, 

documents that we received for this hearing. I think this is a bad 

idea. I think we could wait until just a few weeks from now, when 

the final decision is made, and then make all of these documents 

public, and I understand DOD ‘‘doesn’t object to the committee’s release of these documents.’’ Given all of the controversy, all of the 

legal challenges, and all of the delays of over a decade, why 

wouldn’t we want to just wait a few weeks before we would release 

that information, which could cause further disruption to the competition? 

Mr. Chairman, it is your right, as chairman, to release those documents. I don’t think that it does any good at this time, and it 

could be disruptive. I say that as a person who has been very much 

an advocate of total transparency and knowledge, not only shared 

by Members of Congress, but by the American people. 

So, I thank the witnesses for being here today. 

I hope that in February we can finally have a final resolution 

and selection of a tanker that’s badly needed by the U.S. Air Force, 

after nearly a decade of stories of corruption, abuse, mismanagement, and now this latest fiasco of releasing relevant documents to 

7 

the contractors, a rather incredible happenstance, in this long odyssey and saga of mismanagement and, in some cases, corruption 

surrounding the awarding of the contract for this tanker. 

I thank you, Mr. Chairman. 

Chairman LEVIN. Thank you very much, Senator McCain. 

General Masiello. 

STATEMENT OF MAJ. GEN. WENDY M. MASIELLO, USAF, PROGRAM EXECUTIVE OFFICER FOR COMBAT AND MISSION 

SUPPORT, OFFICE OF THE ASSISTANT SECRETARY OF THE 

AIR FORCE FOR ACQUISITION 

General MASIELLO. Mr. Chairman, Senator McCain, and members of the committee, thank you for opportunity to discuss the 

events surrounding an inadvertent disclosure of information related to the KC–X program. 

I should make it clear at the outset that neither I nor my fellow 

witness, Mr. Shirley, are affiliated with the KC–X source selection, 

and thus we cannot address nor speculate on matters beyond the 

scope of today’s hearing. 

As a senior Air Force military officer with contracting experience, 

as well as experience in numerous source selections, I’ve been 

asked to review the redacted record of the incident, and the extent 

of the Air Force’s response, so that I could appear today to address 

the process that was followed and how the Air Force’s actions 

maintained the integrity of the source selection process. 

I know that committee members are aware that the Air Force is 

in the midst of the source selection and will appreciate that my testimony today will be limited to the specifics of this event and my 

analysis of the actions taken. 

The Air Force has been and remains committed to a fair, open, 

and transparent KC–X source selection. I understand the Air Force 

has provided all committee-requested documents properly redacted 

of proprietary and source selection sensitive information. 

These are the summary statements by the procuring contracting 

officer and the head of Air Force contracting activity regarding the 

Procurement Integrity Act; the Office of the Secretary of Defense 

(OSD) Independent Review Team’s (IRT) report; statements from 

both companies, including signed CEO certification letters; and the 

summary statement of the classified Defense Computer Forensics 

Report. 

Before responding to your questions, let me provide this summary of where the Air Force believes the record stands today: 

First, the Air Force determined that the error was unintentional 

and that the actions of the individuals, both government and 

offerors, did not constitute a violation of the Procurement Integrity 

Act. 

Second, through the statements offered by the employees who 

handled or viewed the disks from both companies, certified in writing by both company CEOs, and other means which I’ll address in 

a moment, the Air Force believes that the information exposed to 

one offeror’s employee was limited to one screen of summary data 

related to the government’s IFARA data. None of the information 

on that page was proprietary, and as has been previously stated 

publicly, there was no pricing data anywhere on the disks. The 

8 

summary page, an Excel spreadsheet, was open on the screen for 

a matter of seconds before it was closed when the company employee realized the mistake. Both companies, upon realizing the 

error, immediately secured the disks in safes and contacted the 

Program Office. The Program Office immediately directed and received all of the disks the next day. 

The company employee who viewed the single screen shot was 

reassigned to an administrative position, and did not rejoin the 

company’s proposal preparation team until after the leveling of the 

playing field, which I’ll address momentarily. 

Third, at the direction of the source selection authority and procuring contracting officer, an independent review was conducted by 

personnel from the OSD IRT as to the facts and circumstances regarding the incident. The IRT also made recommendations to help 

prevent future occurrences. 

Fourth, as a further level of verification, the Air Force requested 

and both companies cooperated by providing the computers that 

their competitors’ disks were inserted into. Using the Defense Computer Forensics Laboratory, the Air Force was able to verify that 

the record of the disks and files accessed was consistent with the 

statements provided by both companies and certified by their 

CEOs. 

Fifth, following the investigation, in order to ensure a level playing field, both offerors were presented with the same screen shots 

of each other’s information. Further, since the Air Force was still 

at a stage where offerors could continue to update their proposals, 

the procuring contracting officer made it clear that such updates 

could continue. Consistent with the Air Force’s efforts to maintain 

transparency, both offerors received the opportunity to review the 

forensic analysis of their respective computers. 

Sixth, I am informed by the Program Office that the IFARA summary scores shared with both offerors were interim scores and 

were not the final scores that will be used in the evaluation. Further, both offerors will have the opportunity to provide a final proposal revision, as is standard. No offeror was impaired from continuing to improve its proposal. 

Seventh, the two individuals directly responsible for the packaging and mailing of the information to the companies were not 

only removed from the program, but no longer perform any duties 

on programs associated with the Aeronautical Systems Center. Two 

other individuals, tangentially involved, were counseled. 

Eighth, all recommendations from the OSD IRT to prevent recurrence have been adopted. Transmittal of any classified material to 

a contract will be accompanied by a letter, not just the Air Force 

Form 310, signed by an appropriate official. Descriptions of the material being transferred must match both the transmittal letter and 

the Form 310. The transmittal letter and the Air Force Form 310 

must both be reviewed by the signatory of the transmittal letter 

and an appropriate security official. Classified material to be transmitted must be delivered to the security office in a separate clearly 

marked package to identify the recipient of the material for each 

package, ensure individuals with knowledge of both the content of 

the material and the purpose of the transfer be involved with the 

preparation and packaging of the information, and personally exeVerDate Aug 31 2005 13:06 Sep 06, 2011 Jkt 000000 PO 00000 Frm 00012 Fmt 6633 Sfmt 6602 Y:\BORAWSKI\DOCS\68083.TXT JUNE PsN: JUNEB
9 

cute the transfer. Additional measures were taken to include supervision oversight and two-person rules that involve senior program 

and contracting officer positions to personally verify and validate 

contents of packages against transmittal letters and inventory 

forms. 

Finally, while the Air Force regrets that the incident occurred, 

Air Force leadership is satisfied that both companies responded to 

the incident correctly and professionally. 

After reviewing the same documents presented to the committee, 

it is my opinion that the actions taken by the Program Office have 

ensured a level playing field. 

I’d like to thank the committee for your continued support of our 

men and women in uniform as we await the outcome of the source 

selection. 

[The prepared statement of General Masiello follows:] 

PREPARED STATEMENT BY MAJ. GEN. WENDY MASIELLO, USAF 

Mr. Chairman, Senator McCain, and members of the committee thank you for the 

opportunity to discuss the events surrounding an inadvertent disclosure of information related to the KC–X Program. I should make it clear at the outset that neither 

I nor my fellow witness, Mr. Shirley, are affiliated with the KC–X Source Selection 

and thus we cannot address, nor speculate, on matters beyond the scope of today’s 

hearing. As the senior Air Force military officer with contracting experience, as well 

as experience in numerous source selections, I have been asked to review the redacted record of the incident, and the extent of the Air Force’s response, so that I 

could appear today to address the process that was followed and how the Air Force’s 

actions maintained the integrity of the Source Selection process. I know that committee members are aware that the Air Force is in the midst of the Source Selection 

and will appreciate that my testimony today will be limited to the specifics of this 

event and my analysis of the actions taken. The Air Force has been and remains 

committed to a fair, open and transparent KC–X source selection. I understand the 

Department has provided all committee requested documents, properly redacted of 

proprietary and source selection sensitive information. These are: 

• The summary statements by the Procuring Contracting Officer and the 

Head of Air Force Contracting Activity regarding the Procurement Integrity 

Act; 

• The Office of the Secretary of Defense (OSD) Independent Review Team’s 

report; 

• Statements from both companies, including signed, Chief Executive Officer (CEO) certification letters; and, 

• The summary statement of the classified, Defense Computer Forensics report. 

Before responding to your questions, let me provide this summary of where the 

Air Force believes the record stands today. 

First, the Air Force determined that the error was unintentional and that the actions of the individuals, both government and offerors, did not constitute a violation 

of the Procurement Integrity Act. 

Second, through the statements offered by the employees who handled or viewed 

the disks from both companies, certified in writing by both company CEOs, and 

other means which I’ll address in a moment, the Air Force believes that the information exposed to one offeror’s employee was limited to one screen of summary data 

related to the government’s Integrated Fleet Aerial Refueling Assessment (IFARA) 

data. None of the information on that page was Proprietary, and as has been previously stated, there was no pricing data anywhere on the disks. The summary 

page, an Excel spreadsheet, was open on the screen for a matter of seconds before 

it was closed when the company employee realized the mistake. Both companies, 

upon realizing the error, immediately secured the disks in safes and contacted the 

Program Office. The Program Office immediately directed and received all of the 

disks the next day. The company employee who viewed the single screen shot was 

reassigned to an administrative position, and did not rejoin the company’s proposal 

preparation team until after the leveling of the playing field, which I’ll address momentarily. 

10 

Third, at the direction of the Source Selection Authority and Procuring Contracting Officer, an Independent Review was conducted by personnel from the OSD 

Independent Review Team as to the facts and circumstances regarding the incident. 

The Review Team also made recommendations to help prevent future occurrences. 

Fourth, as a further level of verification, the Air Force requested and both companies cooperated by providing the computers that their competitor’s disks were inserted into. Utilizing the Defense Computer Forensics Laboratory the Air Force was 

able to verify that the record of the disks and files accessed was consistent with the 

statements provided by both companies and certified by their CEOs. 

Fifth, following the investigation, in order to ensure a level playing field, both 

offerors were presented with the same screen shots of each others’ information. Further, since the Air Force was still at a stage where offerors could continue to update 

their proposals, the Procuring Contracting Officer made it clear that such updates 

could continue. Consistent with the Air Force’s efforts to maintain transparency 

both offerors received the opportunity to review the forensic analysis of their respective computers. 

Sixth, I am informed by the Program Office that the IFARA summary scores 

shared with both offerors were interim scores, and were not the final scores that 

will be used in the evaluation. Further, both offerors will have the opportunity to 

provide a Final Proposal Revision, as is standard. No offeror was impaired from continuing to improve its proposal. 

Seventh, the two individuals directly responsible for the packaging and mailing 

of the information to the companies were not only removed from the program, but 

no longer perform any duties on programs associated with the Aeronautical Systems 

Center. Two other individuals, tangentially involved, were counseled. 

Eighth, all recommendations from the OSD Independent Review Team to prevent 

recurrence have been adopted. 

• Transmittal of any classified material to a contract will be accompanied 

by a letter, not just the Air Force 310 ‘‘Document Receipt and Destruction 

Certificate’’, signed by an appropriate official. 

• Descriptions of the material being transferred must match both the 

Transmittal Letter and the Form 310. 

• The Transmittal Letter and the AF Form 310 must both be reviewed by 

the signatory of the Transmittal Letter and an appropriate security official. 

• Classified material to be transmitted must be delivered to the security office in a separate clearly marked package to identify the recipient of the 

material for each package. 

• Ensure individuals with knowledge of both the content of the material 

and the purpose of the transfer be involved with the preparation and packaging of the information and personally execute the transfer. 

Additional measures were taken to include increased supervision oversight and 

two-person rules that involve senior Program and Contracting Officer personnel to 

personally verify and validate contents of packages against transmittal letters and 

inventory forms. 

Finally, while the Department regrets that the incident occurred, Department 

leadership is satisfied that both companies responded to the incident correctly and 

professionally. 

After reviewing the same documents presented to the committee, it is my opinion 

that the actions taken by the program office have ensured a level playing field. I’d 

like to thank the committee for your continued support of our men and women in 

uniform as we await the outcome of this source selection. 

Chairman LEVIN. General, thank you so much. 

Mr. Shirley. 

STATEMENT OF STEVEN D. SHIRLEY, EXECUTIVE DIRECTOR, 

DEPARTMENT OF DEFENSE CYBER CRIME CENTER 

Mr. SHIRLEY. Good morning, Senator. 

I have no opening statement, but I am present, as a technical 

representative, to answer questions about the forensic process, if 

required. 

Chairman LEVIN. Okay. Thank you. 

Thank you, both, very much for being here and for your service. 

Let’s try an 8-minute first round. 

11 

General, let me ask you this question first. Can you tell us, specifically, what data from each contractor has been shared with the 

other contractor as a result of the incident? You talked about a 

screen shot, for instance. Be much more precise as to what was 

seen and what then was shared. 

General MASIELLO. Senator, from my observation and my reading the documents that are presented here, it was a screen shot of 

IFARA data, which was about a spreadsheet. It appeared to have 

10 lines of information. That screenshot was the IFARA data analysis, the Air Force’s analysis of their individual data. That’s all I 

know about what the content or the details are. 

Chairman LEVIN. It was one page, is that all? 

General MASIELLO. One page. 

Chairman LEVIN. What is a screenshot? Is that a page? 

General MASIELLO. Yes, sir. When it pops up onto your computer 

and it has a spreadsheet of the information, that instant page on 

the computer screen, and it’s a picture of that taken. 

Chairman LEVIN. All right. 

General MASIELLO. So, there’s nothing that drills down below 

that screenshot. 

Chairman LEVIN. All right. One image of the screen, you determined, for how long? 

General MASIELLO. However long it presented. But the fact is a 

copy of that, for each offer, was swapped with the offerors. 

Chairman LEVIN. That one page. 

General MASIELLO. Correct. 

Chairman LEVIN. That one page alone. 

General MASIELLO. Yes, sir. 

Chairman LEVIN. Now, have you determined how long that 

screen was opened? 

Mr. SHIRLEY. Sir, based on the forensics of the media provided 

by the company, we think that it was viewed on the order of several minutes. That’s based on statements from the company. But, 

the computer was powered for a longer period. 

Chairman LEVIN. Where was the 15-seconds figure? Where did 

that come from? 

General MASIELLO. Sir, that was the person’s estimate of how 

much time they viewed it, that they then prepared and signed a 

statement certifying to that, which was subsequently certified by 

the CEO of the company. 

Chairman LEVIN. All right. You submitted those documents that 

you outlined to us and we have received assurance from the Air 

Force that there’s no objection to the committee’s decision to do so, 

if we determine that it’s appropriate to do so. 

General MASIELLO. That’s my understanding, sir. 

Chairman LEVIN. All right. 

Is there objection to those documents being made part of the 

record and being released? 

General MASIELLO. Not that I’m aware of, sir. 

Chairman LEVIN. Hearing none, that is the action the committee 

will take. 

[The information referred to follows:] 

12 


127ful1.eps
13 


127ful2.eps
14 


127ful3.eps
15 

Chairman LEVIN. You indicated that that information was nonproprietary information, is that correct? 

General MASIELLO. Yes, sir. 

Chairman LEVIN. Would the availability of that information to 

one of the competitors, but not the other, be advantageous? If so, 

is that the reason why you decided to attempt to level the playing 

field by swapping the information, so that both companies would 

have the assessment of the other company? 

General MASIELLO. Sir, I can’t tell you whether it was that important or not, because I don’t know. I’m not privy to the KC–X 

specifics. But, whether it was or wasn’t, there was, at minimum, 


127ful4.eps
16 

a perception, so the government chose to provide copies to both contractors. 

Chairman LEVIN. Both companies. 

General MASIELLO. Yes, sir. 

Chairman LEVIN. I presume it’s the EADS employee that we’re 

talking about; how long was it, after that mistake was noticed by 

that employee, did EADS close it up and get it back to the government? 

General MASIELLO. What I read is that they immediately stopped 

looking at it, and, because they were in a secure environment, 

needed to go find someone to partner with them to close it all 

down. 

Chairman LEVIN. Right. 

General MASIELLO. It was immediate. They wasted no time shutting it down and securing the documentation and the disks in a file 

that was signed by security reviewers, as well. 

Chairman LEVIN. All right. The other company, Boeing, also 

caught the mistake. How long did it take them to close up? 

General MASIELLO. It was as instantaneous as what I read about 

in the EADS testimony. 

Chairman LEVIN. All right. Those documents that you’ve referred 

to that contain that chronology and that certification—there were 

four of them that you made reference to in your opening statement—are now part of the record and people can look at that chronology and determine how many minutes and how many seconds 

it was, after the mistake was noticed, that each company locked up 

the disks, and then got them back to the government, is that correct? 

General MASIELLO. Yes, sir. 

Chairman LEVIN. That information is in those documents, now 

available publicly. 

General MASIELLO. Yes, it is. 

Chairman LEVIN. You’re a forensic expert, Mr. Shirley, and 

you’ve told us how confident you are. Let me ask you this question, 

your conclusion, or the Department’s conclusion, as to what data 

was viewed and for how long, is that a high level of confidence? 

Mr. SHIRLEY. Yes, sir, Senator. If I might describe a little bit 

about the process to give you the context. 

DOD Cyber Crime Center has, as part of it, the Defense Computer Forensics Lab. It’s manned with about 110 people, today. It 

operates as an accredited lab, certified by an external entity; in 

this case, the American Society for Crime Lab Directors and their 

lab accreditation board. What that process does is validate that we 

have a reliable, valid, repeatable process, that we have people who 

are certified and professionally qualified to perform the duties in 

question. They’re subject to periodic review and testing in that regard as a condition of the lab retaining its accreditation. 

When we receive this data, we essentially treated it in the same 

manner as we would treat an inadvertent disclosure of classified 

information in a sensitive program. So, we assigned, as a forensic 

examiner, one of our most capable subject matter experts. He is the 

forensic expert that processed this data. He’s been qualified in 

court about 13 times. So, we have a very high level of confidence 

17 

that the forensic findings validated the representations by each 

company. 

Chairman LEVIN. Very specifically, the representations, in the 

case of Boeing, were that they saw the mistake and did not open 

the page or read the page. In the case of EADS, the representation 

was that the same page was inadvertently opened, the person who 

saw it, saw that one page. You indicated this morning, apparently, 

because of personal conversations with that person, that it may 

have been a matter of minutes, but according to the documents, 

which are now part of the record, that was for 15 seconds. In either 

event, you’ve concluded it was a matter of some minutes? 

Mr. SHIRLEY. Yes, sir. A very short time. 

Chairman LEVIN. Okay. That person immediately closed that 

page and got that material back to the Air Force, is that correct? 

Mr. SHIRLEY. That’s correct, sir. 

Chairman LEVIN. You’re confident that the facts are that was the 

only page which was opened up by that person? 

Mr. SHIRLEY. Yes, sir. 

Chairman LEVIN. Based on your forensic capabilities. 

Mr. SHIRLEY. That’s correct, Senator. 

Chairman LEVIN. Okay. 

Thank you very much. 

Senator Inhofe. 

Senator INHOFE. Thank you, Mr. Chairman. 

I won’t need my full 8 minutes; I had a chance to talk to both 

witnesses beforehand. 

In your position, are you able to say what percentage of the bid 

would this represent? 

General MASIELLO. Sir, I have no insight into what percentage 

that the IFARA data represents for the whole KC–X decision process. 

Senator INHOFE. The final bid, I think, is sometime just in the 

next few weeks. It’s coming up. In your opinion, from what you do 

know, would this impact the final bid? 

General MASIELLO. Sir, I don’t have a sense for how much it does 

or if it does affect the final bid. All I know is that the contractors 

have the opportunity to adjust their proposals any way they see fit 

over the next remaining period, whatever that might be, before 

their final proposal revisions are made. 

Senator INHOFE. But, however important or unimportant this information is, since I don’t know and you’re not in a position to 

know, has any thought been given to eliminate this IFARA element 

in the final bid process? 

General MASIELLO. Sir, I couldn’t confirm whether or not that 

would be the case. It would probably be something that a procuring 

contracting officer (PCO) would consider when they made the decision how to address the inadvertent release. 

Senator INHOFE. As a member of this committee, I would like to 

know, if it’s appropriate to know, whether or not this should be included. It bothers me when something is disclosed like this, and I 

don’t know how significant it is to the whole bid, but I feel that 

we should know. 

General MASIELLO. Yes, sir. 

Senator INHOFE. All right. 

18 

Thank you. I don’t have anything else, Mr. Chairman. 

Chairman LEVIN. Thank you very much, Senator Inhofe. 

Senator McCaskill. 

Senator MCCASKILL. Let me just say for the record that this is 

a case study of incompetence at contract competition, this whole 

debacle from beginning to this very moment. Contract competition 

for something like this has to be a core competency. 

I want to know, in this instance, what punitive actions have been 

taken. We can call it an accident, but it’s incompetence. So, what 

punitive actions have been taken against the person who made the 

mistake? 

General MASIELLO. Ma’am, from what I read in the documents, 

the two people who were involved in making the mistake are no 

longer employed at Aeronautical Systems Center. 

Senator MCCASKILL. So, they were fired? 

General MASIELLO. Yes, ma’am, from that particular program, 

and they have been moved to another program. 

Senator MCCASKILL. Where have they been moved? 

General MASIELLO. Ma’am, I don’t know. 

Senator MCCASKILL. I would like to know that. 

General MASIELLO. Yes, ma’am. 

Senator MCCASKILL. I would like to know where they are. I 

would like to know if they’re still making the same amount of 

money. I would like to know if they’re going to resurface later in 

another position of responsibility. 

General MASIELLO. Yes, ma’am. 

[The information referred to follows:] 

The two individuals were removed from the KC–X program after an independent 

inquiry into the circumstances of the unauthorized disclosure. These individuals, 

both of whom were then support contractor employees, where immediately moved 

to their employer’s administrative overhead. At the time of the disclosure, one of the 

individuals was a Senior Level Security Specialist and the other was a Contract 

Support Specialist. The security specialist subsequently was reassigned to a staff position, not supporting any Aeronautical Systems Center acquisition program of 

record, as a Journeyman Level Security Specialist with a substantial pay cut (believed to be roughly 30 percent). The contract support specialist subsequently accepted a Civil Service position as a GS–12 Acquisition Program Manager at the Air 

Force Security Assistance Center at a substantial pay cut (believed to be roughly 

30 percent). 

Senator MCCASKILL. I have complimented Secretary Gates because he has provided accountability at the top level in many instances where we have had problems. But, I just think this is beyond the pale. 

There are so many things about this that are unusual. Let me 

start with this. If you can state for the record—and if you can’t, 

I would like this answer from someone else within the military— 

isn’t it correct that it is very unusual for Boeing to file a protest 

after a competition? 

General MASIELLO. Ma’am, I couldn’t answer that. I’ve had different experiences. 

Senator MCCASKILL. That’s a question I would like for the 

record. I would like to know, from DOD’s perspective, whether or 

not it is unusual for Boeing to file a complaint and whether or not 

it is unusual that all nine bases on which they filed the complaint 

were all sustained at the Government Accountability Office (GAO). 

[The information referred to follows:] 

19 

Like most major defense contractors, Boeing does not have a history of being a 

frequent protester to the Government Accountability Office (GAO) or to the Court 

of Federal Claims. With regard to Boeing’s protest of the 2008 KC–X source selection, while GAO did sustain the protest on eight separate grounds, there were other 

issues in contention on which GAO either found for the government or did not reach 

a final decision. 

Senator MCCASKILL. I’m confused about the screen. EADS said, 

originally, that they didn’t look at the data. Is that correct? 

General MASIELLO. No, ma’am, they did not say that. 

Senator MCCASKILL. They said they looked at it for a very brief 

period of time. 

General MASIELLO. They looked at the screen shot of the spreadsheet. They admitted to that. 

Senator MCCASKILL. Okay. 

General MASIELLO. That’s what made them nervous. They realized that they shouldn’t be looking at that. 

Senator MCCASKILL. Okay. I’m confused, though. It appears to 

me, from looking at the information, that they originally said they 

looked at it a very short period of time. The forensics indicated that 

may not be true, that they might have looked at it longer than they 

originally said they looked at it. Is that correct, Mr. Shirley? 

Mr. SHIRLEY. Senator, what we were able to determine is that 

the file was opened for a fairly short period of time. The computer 

was powered a bit longer. So, in essence, the statement by the employee, we thought, was consistent with what we saw in the digital 

media. 

Senator MCCASKILL. Why is it relevant that the computer was on 

longer? Why do you even mention the computer was powered 

longer? 

Mr. SHIRLEY. When we perform an exam, we look at the media 

at a number of different levels. One of the things that’s associated 

with the computer being in a powered state is there’s a feature 

called clock time that tells you how long the computer’s in operation and what files may be manipulated while it’s in operation. 

So, it was part of the context of trying to validate the employee’s 

statement against what we saw on the computer. 

Senator MCCASKILL. So, you are testifying today that you believe 

that the screen was only viewed for the same amount of time that 

EADS had represented that it had been viewed. 

Mr. SHIRLEY. Roughly. Yes, ma’am. 

Senator MCCASKILL. My sense is that these are not the right witnesses to answer this question. To follow up on what Senator 

Inhofe said, given this controversy, should IFARA be used and retained in the final evaluation process now? 

General MASIELLO. Ma’am, it’s not for me to judge. The PCO on 

the head of contracting activity determined that it was still appropriate to leave in the competition. 

Senator MCCASKILL. We will compose another question for the 

record to get to those individuals, to get other rationale for that. 

[The information referred to follows:] 

Yes. The Integrated Fleet Aerial Refueling Assessment (IFARA) uniquely measures the integrated capability of a fleet of tankers in wartime scenarios. Elimination 

of IFARA could result in significant operational capability being eliminated by all 

offerors. The Air Force believes the actions taken level the playing field. Further, 

all offerors equally had several opportunities to update any part of their proposal 

after the playing field was leveled. 

20 

Senator MCCASKILL. Finally, I know that these are probably not 

the right witnesses, but it’s my understanding that DOD has taken 

the position that the World Trade Organization (WTO) rulings are 

not relevant to their decision. I would like to know where in the 

Federal Acquisition Regulation (FAR) that is prohibited. If it’s not 

a level playing field, due to subsidies by other countries, common 

sense tells me, from the Midwest, that if somebody has their finger 

on the scale, in terms of subsidies they get from their government, 

that it’s not a level playing field. I am trying to get my arms 

around the notion that that’s not relevant. If either of you can 

speak to that, that would be terrific; if not, we’ll try to track down 

the right person to get the answer from. Because I don’t believe 

there’s anything in the FAR that prohibits that from being considered. 

General MASIELLO. I’ll defer to DOD on that, ma’am. 

[The information referred to follows:] 

The Department of Defense has taken the necessary steps to protect the interests 

of the taxpayer and the warfighter. The World Trade Organization (WTO) matters 

in the large civil aircraft disputes are issues between the United States and the European Union. It would be inappropriate for DOD to take any action that could impair the U.S. Trade Representative’s ability to appropriately represent the interest 

of the United States before the WTO. The Government Accountability Office (GAO) 

has consistently held that there is no requirement that an agency consider foreign 

government subsidies in evaluation of proposals. According to these GAO decisions, 

the Buy American Act is the proper method for taking these sorts of concerns into 

consideration in a source selection. The KC–X evaluation will consider, as appropriate, the Buy American Act. 

Senator MCCASKILL. Okay. 

I understand the limitations we have, Mr. Chairman, in terms of 

what we can ask, since this is an ongoing process. But, some of 

these are writ large policy discussions that I really think the Senate has to come to grips with. 

I mean, we have a farm field in Alabama and a company that’s 

receiving tens upon billions of dollars of subsidies from foreign governments. Obviously, this process began with bad acting on the 

part of the company that I think, from where I sit, is better 

equipped to handle this. 

But, having said that the notion that we are not going to take 

into account, in light of everything that’s going on in this country, 

that we have foreign nations that are subsidizing companies and 

that’s not relevant to our competition, just doesn’t make sense to 

me. I would like us to get to that policy question in these hearings, 

if at all possible. 

I thank you, Mr. Chairman. 

Chairman LEVIN. Senator McCaskill, I think the purpose of this 

hearing is set forth, which is to see what happened here, specifically, and what was done to attempt to remedy it. The broader 

questions which you raise are appropriate in a different forum for 

that to be argued or for a different time. But, these witnesses, in 

all fairness to them, are not called for that purpose. 

Senator MCCASKILL. I certainly understand. I don’t mean to be 

in any way critical of these witnesses, because they’re not prepared 

to handle these questions. But, they’re on my mind and I needed 

to express them. 

Chairman LEVIN. Which is your right. 

21 

Senator MCCASKILL. Thank you. 

Chairman LEVIN. Thank you very much. 

Senator Sessions. 

Senator SESSIONS. Thank you, Mr. Chairman. 

I would just like to say, first, that the Air Force did start off with 

this process in a very, very unfortunate way. People from both the 

Boeing Company and the Air Force went to jail. Senator McCain 

smelled a rat early on. This committee was the one committee that 

wasn’t really consulted in how that original sole-source contract 

was awarded. Senator McCain, supported by Senator Levin and 

Senator John Warner, challenged the situation. 

What we decided to do was to have a competition. It was the right decision to do, and it saved $7 billion. I remember declaring 

Senator McCain to be the $7 billion man; he saved the taxpayers 

$7 billion as a result of having a competition in this process. 

A fair, objective competition is what we need and what we have 

committed to as a committee, and as a Congress. Now, on the eve 

of this final decision, we have people with political interest and 

local interest trying to destabilize the process. I just am not happy 

about that. I wish it had not happened. 

I understand how important it is, because it would mean a lot 

for my State, just like it would mean a lot for other States if it 

would go another way. But, we have to be sure that we’re not doing 

anything that says that we expect the Air Force to do anything 

other than what we have directed them to do. The question of subsidies and all of those matters have been discussed for a decade as 

we’ve gone forward with this. We’ve decided how we need to proceed with the competition, and we need to proceed in that way. 

I suppose it’s appropriate to ask about whether or not this possible information error infected the process. I’m not comfortable 

that it is. I asked General Schwartz, the Chief of Staff for the Air 

Force, earlier about it. He assured us all that there had been no 

unfair advantage gained through this process. 

Mr. Chairman, thank you for your leadership. I know you have 

members on your side and others that want you to do this, that, 

and the other, all in all, it’s a thankless task you have, and I think 

you’ve conducted it in a fair way. 

I just would like to say, I think producing these documents is a 

bad idea. Just because they’ve been redacted to exclude source selection sensitive and proprietary information doesn’t mean that releasing them might not cause disruption to the competition, which 

is taking place right now and coming to its conclusion. So, in my 

view, our disrupting in any way, politically, the competition would 

reflect poorly on our committee. 

I understand DOD doesn’t object to the committee’s release of the 

documents. While that fact is relevant, it still doesn’t mean that, 

in the exercise of its discretion, the committee should release them 

before the contract is awarded. So, I do object to that. 

Chairman LEVIN. They’ve already been made part of the record, 

Senator Sessions. 

Senator SESSIONS. Mr. Chairman, General Masiello, I asked General Schwartz in this room last fall about the documents, and he 

responded that ‘‘both offerors reacted in a responsible manner and 

returned the disks that were mistakenly forwarded to them, to the 

22 

Air Force. We have confirmed that by forensic evidence.’’ I’d just 

like to ask you today whether or not you have any information that 

would indicate that either competitor has acted inappropriately 

when they received the data that should not have been sent to 

them. 

General? 

General MASIELLO. Senator, by reading the statements that came 

from both companies, I was really quite impressed by the responses, on both companies’ part, when they realized they had data 

that they shouldn’t have had. My assessment is they all acted very 

appropriately and have certified to that effect. 

Senator SESSIONS. Mr. Shirley, you’ve examined forensically the 

disk and the information. Have you been able to conclude that both 

offerors responded appropriately? 

Mr. SHIRLEY. Yes, sir. What we found on their computers was 

consistent with what they said that they did, in each case. 

Senator SESSIONS. General Masiello, what action did you take 

once you realized this error had occurred? 

General MASIELLO. Sir, what I read the PCO did when she heard 

was, she told them to package things up immediately and get the 

disks right back to the Air Force. Then they instituted an IRT. 

They went over to look and see what happened and what went on 

in the Air Force distribution process so they could correct that immediately. They pulled in the Defense service to examine the computers and got the CEOs to certify to the details that came from 

each incident on the companies’ side. It was very thorough. 

Senator SESSIONS. Do you think that the process as a result of 

this disclosure was injured in anyway? Was fairness in the process 

damaged in any way? 

General MASIELLO. From what I read here and from the decision 

that the PCO has validated by the head of contracting activity, and 

the fairness in sharing the same snapshot with the companies, I 

would come to the conclusion that it would not affect the source selection process. 

Senator SESSIONS. If either one of the companies—and they were 

told about this—felt they had been unfairly affected by it, what action, if any, could they have taken? 

General MASIELLO. Sir, a company can protest at any point, either pre-award or post-award. The companies still have the opportunity to protest if they think that anything is being inappropriately managed at this point. 

Senator SESSIONS. How long did the offerors have to lodge a formal complaint as a result of this event? 

General MASIELLO. It could still be a part of a post-award protest, should they choose to do that. 

Senator SESSIONS. Have either one protested? 

General MASIELLO. Not at this time, sir. 

Senator SESSIONS. Throughout this whole process there have 

been opportunities to protest and neither company has. 

General MASIELLO. That’s correct. 

Senator SESSIONS. No formal complaint has been lodged. 

General MASIELLO. That’s correct, as far as I’m aware. 

Senator SESSIONS. I suppose, then, that we have to conclude that 

both companies feel that this inadvertent disclosure did not affect 

23 

them adversely to the degree that they should ask for it. Would you 

agree with that? 

General MASIELLO. At this point, sir, I would. 

Senator SESSIONS. On November 30, a New York Times article 

indicated that an Air Force forensic specialist inspected both companies’ computers and found that one of the firms had mistakenly 

opened a computer file containing information about its rival’s airplane, while the other had not. The redacted forensic report presented to the committee yesterday asserts that both companies inspected their own and their competitors’ disk and opened them. 

General and Mr. Shirley, tell me which statement is correct, the 

New York Times report of the matter or the statement by the Air 

Force spokesman forensic report by the Defense Cyber Crime Center. 

General MASIELLO. Sir, both companies put the other companies’ 

disk in the computer. One of the companies realized what they saw 

on the disk right away was probably something they shouldn’t look 

at. The second company opened one of the files on the disk, and 

that’s the 10-line spreadsheet snapshot that was then swapped between the companies. So, both companies did put the disks in their 

computer, based on what I read. One opened a single file, and 

that’s the snapshot of the IFARA data that’s in question. 

Senator SESSIONS. Mr. Shirley, do you agree with that? 

Mr. SHIRLEY. Yes, Senator, I do. 

Senator SESSIONS. We’ve heard the fact that nothing significant 

was disclosed, not unfair, it did not affect the competition, and that 

neither company has protested. 

Mr. Chairman, there’s a lot more we could talk about, I know it’s 

important to every area of the country that has an interest in the 

outcome of the contract, but it’s really important for us, on this 

committee, not to politicize this process. Every one of these issues, 

the trade issues and all, we’ve discussed for almost a decade and 

we’ve made the decision to go forward. We shouldn’t on the eve of 

this competition take any action that would suggest we want the 

Air Force to do anything other than try to select the best aircraft 

at the best price for the men and women who defend our country. 

Thank both of you for the effort you’ve taken to get to the bottom 

of the error and establishing, I think conclusively, that there was 

no unfairness arising from it. 

Thank you. 

Chairman LEVIN. Thank you, Senator Sessions. 

Senator Graham. 

Senator GRAHAM. Thank you. 

I have a completely different take than Senator Sessions on this. 

I think this is something we should be looking at; this is something 

we should be talking about. Quite frankly, as Senator McCaskill 

said, this is not the finest moment for the Air Force. I happen to 

be a member of it. 

The sheet of information we’re talking about, was it the price 

proposal that the companies were making? 

General MASIELLO. No, sir. The disk and the information that 

was presented and viewed was not proprietary and it included no 

pricing data. 

24 

Senator GRAHAM. Well, then why do we even care about this? 

[Laughter.] 

General MASIELLO. Sir, it’s an element of the decision process, as 

I understand it. 

Senator GRAHAM. Was it an important event in the whole process? Did the information that was disclosed and viewed by one 

company, not the other, matter at all? 

General MASIELLO. Sir, it matters from a fairness perspective. 

Whether it’s important or not, the important thing is that we’re 

fair to these companies. 

Senator GRAHAM. Do you know if it’s important? 

General MASIELLO. I don’t know. 

Senator GRAHAM. Okay. 

So, what’s this whole hearing about? You can’t tell us whether 

it was important or not. At the end of the day, the whole process 

has a conclusion to it. We’re about to spend $35 billion of taxpayers’ money here and quite frankly, I think it is important. It’s 

not your job to answer this question as to whether or not we want 

to award a contract to a company that receives subsidies from a 

foreign government. 

We’re setting precedent here, and I think the committee should 

be looking at this. It’s hard enough for American companies to compete already. The Chinese Yuan is 40 percent undervalued. If we’re 

going to start awarding public contracts, where one side gets government aid and the other doesn’t from a foreign government, 

that’s something we need to think about. That’s not the purpose of 

this hearing, but we need to have some discussion about that. 

Mr. Shirley, the person at EADS said that they looked at it for 

15 seconds. Is that correct? 

Mr. SHIRLEY. Yes, sir. 

Senator GRAHAM. How long was the computer on? 

Mr. SHIRLEY. Roughly 20 minutes, sir. 

Senator GRAHAM. Now, how can you say that a 15-second statement in a 20-minute gap in the computer is roughly consistent? 

Mr. SHIRLEY. Well, sir—— 

Senator GRAHAM. What I’ll do is, I’ll ask us to sit in recess for 

20 minutes versus 15 seconds, and you’ll see, very clearly, there’s 

a long gap in time between 15 seconds and 20 minutes. 

Mr. SHIRLEY. What we’re judging, sir, based on the statement 

presented by the employee—— 

Senator GRAHAM. But, the computer was on for 20 minutes; do 

you know what was on the screen for 20 minutes? 

Mr. SHIRLEY. Yes, sir, I believe we do. You’re right, sir, we can’t 

assert what that employee did or didn’t do. All we know is what 

the company represented in their statement. 

Senator GRAHAM. I’m no forensic expert, but the difference between 15 seconds and 20 minutes is a lot. 

Mr. SHIRLEY. We can tell how long a file is open, sir. 

Senator GRAHAM. Thank you. I have no further questions. 

Senator SESSIONS. Mr. Chairman, if the witness could finish his 

answer. 

Senator GRAHAM. Do you know what they looked at for 20 minutes? 

Chairman LEVIN. Who are you asking? 

25 

Senator GRAHAM. I’m asking anybody that can answer the question. 

Mr. SHIRLEY. Sir, can I finish this? 

Senator GRAHAM. Sure. 

Mr. SHIRLEY. Let me say it this way, sir. Our lab found no evidence in conflict with either offeror’s written statement. The only 

files opened were the files identified in the written statement. 

Senator GRAHAM. I know your findings. I’m just asking a factual 

question. The computer was on for 20 minutes, the person said 

they looked at it for 15 seconds. I guess the point I’m trying to conclude here is: this whole idea that it doesn’t matter, we can’t really 

get to because you all don’t know. 

I’m not complaining about the fact that you don’t know. That’s 

not your problem, that’s my problem. 

Mr. SHIRLEY. Sir, if I can clarify here. Our examiner concluded 

that the files were open only for the time suggested by either offeror. 

Senator GRAHAM. I understand. I just wonder how you got to 

that conclusion. 

Mr. SHIRLEY. He can judge from examination of the media 

whether a file was open and when it was closed. 

Senator GRAHAM. All right. So, are you saying it was only opened 

for 15 seconds, forensically? 

Mr. SHIRLEY. Yes, sir. It was open a brief time. 

Senator GRAHAM. But, can you say that this file was open for 15 

seconds? 

Mr. SHIRLEY. Sir, I’d take that one for the record and we will 

send you the precise times on that if we may. 

Senator GRAHAM. Okay. 

[The information referred to follows:] 

I answered to the committee during testimony that the EADS computer was in 

a powered mode for approximately 20 minutes after a competitor file was opened 

(i.e. a Boeing spreadsheet) and that file was opened for approximately 3 minutes. 

Those responses were predicated on DC3’s forensics findings as of the date of the 

hearing. In the forensic process, DC3’s analyst made technical observations of computer data and correlated those against affidavits provided by EADS. 

The following is the deeper detail behind the response, some of which was not 

technically determined as of the hearing date: 

DC3’s forensics examination determined that the EADS computer indicated the 

Boeing spreadsheet was opened at 9:21.14 (Eastern Standard time as displayed in 

the computer on 1 Nov 2010). It was the analyst’s opinion there was no relevant, 

discernible file activity for approximately 20 minutes at which time the computer 

was shut down. This was the basis for my comment that the EADS computer was 

in a powered mode for approximately 20 minutes. My testimony that the spreadsheet was open for roughly 3 minutes was framed on three available data points: 

one employee’s estimate that he opened the file for 15 seconds, the arrival of a second employee within an estimated 3 minutes, and no contradictory forensic evidence; hence the analyst’s worst case conclusion of 3 minutes of access. 

However, in making this determination the analyst did note what he considered 

to be two superfluous file artifacts, an icon cache file and a .pip file. Subsequent 

to the testimony the .pip file was more accurately identified as Excel12.pip, a file 

Microsoft Excel uses to store menu preferences. The .pip file becomes more probative in further ascertaining the specific length of time the spreadsheet file was 

open. This is because the .pip file is only modified when the Excel program itself 

is closed. DC3’s analyst was only able to draw this specific conclusion based on posttestimony technical consultation with Microsoft Corporation experts who developed 

the software. As previously indicated, the analyst confirmed the spreadsheet file 

was opened at 9:21.14. He was able to confirm the .pip file was simultaneously created, modified, and accessed at 9:21.40. According to the Microsoft consultation, the 

.pip file is only updated when the Excel program is closed and the time of 9:21.40 

26 

becomes definitive for file closure. As a result, the analyst was able to further narrow the 3-minute window, described in testimony, to 26 seconds. This finding is 

clearly consistent with the statement by the EADS employee who estimated he 

opened the spreadsheet for approximately 15 seconds. However, this specific data 

was not available by the date of the hearing, hence the reference to the 3-minute 

window. 

Senator GRAHAM. Thank you. 

General MASIELLO. Senator, if I could add something to this. 

While the individual looked at the data, that individual was moved 

off of the program team into an administrative holding tank and 

was not allowed to participate in the program until the PCO allowed them to. 

Senator GRAHAM. You don’t know anything about this, but 

there’s a bunch of problems of how this contract has been changed. 

Some people went to jail; they should have gone to jail. 

Before we award this contract, I want to make sure that what 

we’re doing here, Mr. Chairman, doesn’t set a precedent for the future. Because if this is going to be the way we do contracting, 

where one company gets subsidies from a foreign government and 

the other doesn’t, with public money, we need to think about that. 

The process here of what information was shared and what outcome it had is precedent for the future. So, I am glad you had this 

hearing, and I hope we’ll think more about what we’re about to do, 

not less. 

So, thank you, Mr. Chairman. 

Chairman LEVIN. Let me just clarify the one point, because we’ve 

had three different statements, it seems to me, Mr. Shirley, from 

you. 

One, we know from the record that the person who opened up 

that file said that they looked at it for about 15 seconds. When I 

talked to you earlier today, you said you determined, forensically, 

that it was opened for a few minutes. Now you’re saying that the 

computer was opened, not necessarily the file, but the computer 

was opened for about 20 minutes. 

Mr. SHIRLEY. Yes, sir. 

Chairman LEVIN. Do I have it straight? If not, straighten it out 

right now. 

Mr. SHIRLEY. Yes, sir. The computer was in a powered state for 

about 20 minutes. 

Chairman LEVIN. How long was the file open? How long was that 

page visible? 

Mr. SHIRLEY. My recollection, from the briefing from my examiner, was roughly 3 minutes, sir. 

Chairman LEVIN. Okay. 

Senator MCCASKILL. Three minutes. 

Chairman LEVIN. I think it’s important that we get our terms 

straight, okay? 

General MASIELLO. Mr. Chairman, could I add to this, as well? 

Chairman LEVIN. Of course. 

General MASIELLO. From what I read in the documentation, the 

person who was responsible for opening the file and seeing it realized that they shouldn’t be looking at it. Their procedures are that 

when they see something they shouldn’t, from what I’m seeing 

here, a two-person rule comes into play. They saw it, and they were 

in a sensitive compartmented information facility (SCIF), they 

27 

couldn’t use their phone to get the other person there to come help 

them close it and follow the procedures. So, they went outside of 

their classified area to use the phone to get hold of this person to 

let them know that they had discovered something that they were 

all going to get in trouble for, and they didn’t want to get in trouble 

for. 

So, the screen might have been open, but he was the only person 

in the room. He left the room to get the other person to come help 

them follow their procedures to close the data. 

Chairman LEVIN. That’s the statement of the person who opened 

the file. But, in terms of how long the file was open, to get it 

straight, forensically, 3 minutes. Is that correct? 

Mr. SHIRLEY. Yes. 

Senator GRAHAM. Mr. Chairman, the Air Force obviously is trying to make sure this is not a big deal. 

Chairman LEVIN. I’m not trying, Senator Graham, to say whether it’s big or small because, obviously, it raises some significant 

questions or we wouldn’t be here. 

Senator GRAHAM. Yes, it does. 

Chairman LEVIN. I’m not trying to defend or attack, I’m just trying to straighten out facts because we’ve had a statement here that 

it seems to me we have to be very clear on from Mr. Shirley. 

The computer was powered for perhaps 20 minutes; the file was 

opened for 3 minutes; the person who opened the file said they 

looked at it for 15 seconds. That’s the statement which the person 

gives. Those are the times that we’re talking about. 

Whether or not it is significant that EADS had that information 

for some period of time, whatever that information was that was 

seen by that person existed for some period of time before the two 

files were exchanged, right? The significance, or lack thereof, is, it 

seems to me, an important issue which we’ll get to a little bit later. 

But for the time being that’s the time, okay? 

Thank you, Senator Graham. 

Forgive me, Senator Wicker, I’ve intervened before I called on 

you; I wanted to straighten that out. Thank you. 

Senator Wicker. 

Senator WICKER. I thank you for straightening that out. I think 

that was very helpful. I appreciate the Chair actually giving Mr. 

Shirley an opportunity to answer the question. This is not a jury 

trial, where we’re trying to play ‘‘got you.’’ We’re able to leave the 

record open and get a full explanation. 

I think I see what’s going on here, Mr. Chairman. 

There are some people in this town who believe that the company that they favor may be about to lose a bid again, as they did 

in 2008. A foundation is being laid for howls of protest. I don’t have 

any idea who’s going to win the award. I do know who won it in 

2008. I regret that DOD didn’t go forward with that contract then. 

We would be very, very close to having a tanker that we could rely 

on. 

But, I see what is happening with this hearing. It’s no wonder 

that General Masiello and Mr. Shirley can’t answer these questions, because they’re not involved in the actual award. 

I thought this was going to be a hearing about how the information was inadvertently released and how that has been corrected. 

28 

Let me see if I can get to this procedure, with regard to the computer being on for 20 minutes, the file being open for about 3 minutes, and the statement of the individual, that he viewed it for 

some 15 seconds. 

Do I understand, General, that the EADS procedure is that, once 

an individual realizes he has opened a file, then he must go and 

get a second person to come in and verify that before it can be 

closed? Was that your statement? 

General MASIELLO. Sir, I’m not sure what the procedures are. 

What I read was, they instituted a two-person rule that, together, 

they closed the data, they sealed the data, and they took the disk 

and put it in a safe, separate from any working documents, isolating it completely from the rest of their specific bid information. 

Senator WICKER. Mr. Shirley, is that consistent with the file 

being open for approximately 3 minutes? 

Mr. SHIRLEY. We were given to understand at the lab that when 

the employee opened the file, they were very nervous about what 

had occurred, they realized that they shouldn’t be looking at that 

particular piece of data. They went through some sort of internal 

process to see, ‘‘Geez, how should we walk back from this,’’ and essentially find another witness or a second party to sort of instruct 

them, ‘‘Okay, what do we do next? We’re into something that’s 

awkward.’’ So, that was why the computer, we were given to understand, was left on while they figured out that internal process. As 

they did, then they shut the computer down and went through the 

process that General Masiello just described, Senator. 

Senator WICKER. Okay. 

Then, General, the Air Force, after looking at this and after understanding what had happened, decided to level the playing field. 

Now, once again, tell the committee what information has been 

shared to each of these competitors to level the playing field. 

General MASIELLO. As I understand it, it was the snapshot 

screen of the spreadsheet that the contractor saw. They took a picture of the screen from the computer that had that information, 

and took that same picture of the screen from the other competitor, 

and swapped that information. It’s just a single piece of paper that 

had the spreadsheet from each offeror. It’s the IFARA data. 

Senator WICKER. Okay, so it really wouldn’t matter if the person 

from EADS had looked at that file for 20 minutes, would it? Because, now both competitors can look at each other’s snapshot of 

that spreadsheet for an infinitely long time, is that not correct? 

General MASIELLO. That’s correct, Senator. 

Senator WICKER. I really don’t think there’s anything more to 

ask about. Did either competitor change their proposal significantly 

after this information was shared? 

General MASIELLO. Sir, I have no way of knowing that. But, right 

now they still have the opportunity to change it, should they choose 

to. 

Senator WICKER. Okay. 

My friend from Missouri mentioned a protest. 

With regard to this release of information, is it a fact that neither Boeing nor EADS has protested this? 

General MASIELLO. That is correct. 

29 

Senator WICKER. As a matter of fact, I would observe, Mr. Chairman, that the statements from both of the companies that are before us, are both relatively straightforward and relatively relaxed 

about this, and that neither, having had an opportunity to file a 

protest, has done so. 

Can either of you answer this question—and I suspect you can’t, 

because you’re not involved in the contract—the testimony is that 

this is not proprietary information, but in previous competitions, 

hasn’t this exact data been provided in 2008? Isn’t it already part 

of the public record? 

General MASIELLO. Sir, I’m sorry, I can’t answer that. 

Senator WICKER. Okay. I expected that was the answer. 

Mr. Chairman, you had no choice but to call the hearing. Until 

I see a protest from either company, I’m going to conclude that the 

Air Force saw an example of human error, and that they responded 

correctly, professionally, and properly, and have now leveled the 

playing field, and we should go forward and, hopefully, not see further delay in this very important program. 

Thank you. 

Chairman LEVIN. Thank you, Senator Wicker. 

Senator Brown. 

Senator BROWN. Thank you, Mr. Chairman. 

All I can say is, thank goodness it wasn’t highly classified information like we’ve had in other circumstances. Being in the military, I understand the followup, the checks and balances where you 

try to identify the problems, where they were, and you move forward to make sure it doesn’t happen again. I appreciate that. 

Are you able to guarantee to the committee that the unauthorized release of this information did not give one contractor an unfair advantage? 

General MASIELLO. Sir, I can’t guarantee anything like that. I 

don’t know enough about it, whether to judge or not. 

Senator BROWN. Right. 

General MASIELLO. But, what we have done has provided the 

same type of information to both contractors now. From what I can 

see, and based on the Air Force having taken that action, it appears that they have leveled the playing field. 

Senator BROWN. You’re right, you can’t answer that. I’m not 

quite sure why we’re actually here. I understand there may be 

other things happening behind the scenes that are forcing us to be 

here. 

Your statement could have been given to me offline as to what 

you’ve done. I understand sometimes we need to politicize things 

a little bit more. 

The one thing that I’m surprised at is, it takes 10 years for the 

Federal Government to issue a contract. Only in the Federal Government does it take 10 years to issue a contract. It’s amazing to 

me. 

I’m not as new as I once was, but I’m just amazed when I learn 

about these breakdowns. Not only is it not cost effective, we’re 

wasting taxpayers’ money, we’re losing the confidence of the people 

that we deal with, not only the average citizen, but the individual 

businesses that we deal with to the point where they think, ‘‘Why 

bother? It’s going to take 10 years. We’re going to have to file a 

30 

bunch of protests. It’s going to go on and on and on and on.’’ It just 

makes no sense to me. 

I want to thank you for braving the elements and taking the 

time to come in. We thank you for the preparation. 

Thank you, Mr. Chairman. 

Chairman LEVIN. Thank you, Senator Brown. 

I think the question was raised as to what was available during 

the last protest. Was one contractor’s IFARA data made available 

to the other contractor as a result of the protest process during the 

previous competition? 

General MASIELLO. Sir, I can’t answer that question. I don’t 

know. 

Chairman LEVIN. We’ll ask that for the record. That is a question 

which is factual and it’s not in any way, it seems to me, inappropriate to know, because that gets to the question as to whether this 

data is relevant. 

General MASIELLO. Right. 

Chairman LEVIN. It could be relevant that, assuming that this 

data was known to the person or understood by the person or remembered by the person who saw it for somewhere between 15 seconds minimum and a few minutes maximum, according to the experts here, whether that data gave an advantage because it was 

available to the one contractor for the month, or whatever it took, 

before the switch took place. I’ll ask you the question, whether or 

not that would give any advantage to have that data, assuming it 

was remembered, to have that in one’s possession for that period 

of time between November 1 and the time that the data was exchanged. Do you know the date of that exchange? 

General MASIELLO. November 22. 

Chairman LEVIN. Okay, so whether or not that gives an advantage or not to have the data, assuming it was remembered for that 

21-day period or not, is not, as I understand it, for you to say. Is 

that correct? 

General MASIELLO. That’s correct. But, if I were just looking at 

a snapshot of the information, and all I did was have a snapshot 

of the information, I wouldn’t have known what was going on behind the data to get to that point. The person who did have that 

information, who had seen that screenshot, was removed from the 

program, so they were not allowed to talk to anybody associated 

with the program. They have not, according to their certification— 

that was also certified by the CEO—talked or told anyone in the 

company what they saw on that data. 

But, now that it’s been exchanged it’s level. 

Chairman LEVIN. When you say, ‘‘it’s level,’’ I think you, frankly, 

should be a little more cautious. I think it’s an attempt to level the 

playing field. 

General MASIELLO. Fair enough. 

Chairman LEVIN. It may be a successful attempt. 

General MASIELLO. Fair enough. 

Chairman LEVIN. Unless there’s some advantage to having that 

data for 21 days, in the possession of somebody who has said they 

didn’t share that data with anybody else, then that is an attempt 

to level the playing field, which may have succeeded. Okay? 

General MASIELLO. Correct. 

31 

Chairman LEVIN. Okay. 

General MASIELLO. Fair. 

Chairman LEVIN. General, I just have a couple more questions. 

The remedy here or the attempt to level the playing field, which, 

again, may or may not succeeded—people may want to argue 

that—but, what other options were considered by the Air Force to 

remedy this mistake? 

General MASIELLO. Again, Senator, I don’t know. 

Chairman LEVIN. If you don’t know, that’s fine. 

General MASIELLO. I don’t know. 

Chairman LEVIN. You’ve been called here for a specific purpose, 

and you have given us the information to the best of your ability. 

Same thing with you, Mr. Shirley. 

I think we have to be fair to you as to why you were called. 

It’s important that we get this information on the record, although it may be of limited value. It is part of an overall picture 

on this contract, which took 10 years by the way, because there 

was fraud and corruption involved in one point during this process 

where someone landed in jail. There are a number of reasons why 

it’s extended. The last thing I want to do is inappropriately extend 

the period. This hearing is not doing that. 

We’re simply getting information. Whatever the value of that information is, in advance or afterwards, you can debate that too. I 

happen to think it’s useful to get this out in advance for a number 

of reasons. I think the clearer the air is going into that decision, 

the better off we are. This is intended to get factual information 

whichever way one wants to argue it, on the record, prior to a decision. I shouldn’t say it clears the air; we don’t know if it clears the 

air. Some may argue that it gives weight to one side or the other. 

I’m not arguing that. 

It is important, it seems to me, that all of the appropriate facts 

that can be made public are made public before the decision. There 

may be a lot of arguments after the decision, but at least before 

the decision, it seems to me we ought to get as much out there on 

the record as we can. 

So, you don’t know what other options were considered by the Air 

Force. I will ask for the record the question about whether, in the 

previous protest, this information was made available to the competitors. Will you take that for the record? 

General MASIELLO. Yes, sir. 

[The information referred to follows:] 

As part of the post award debriefing at the end of the February 2008 Source Selection, each offeror was provided the other offeror’s IFARA Fleet Effectiveness 

Value (FEV). The FEV is the bottom line information that was part of the information inadvertently disclosed and subsequently provided to each offeror to level the 

playing field in the current KC–X Source Selection. 

Chairman LEVIN. Okay. Senator Sessions. 

Senator SESSIONS. Let me just say, in defense of the Air Force, 

thousands of decisions and interactions and communications, I’m 

sure, have been undertaken in this effort. After the last incident 

in which fraud was discovered and Boeing officials went to jail, the 

effort redoubled to do this in the most fair way possible, to the extent to which the greater capabilities of the airplane to be built in 

Alabama were really not considered in the bid. It’s basically a lowVerDate Aug 31 2005 13:06 Sep 06, 2011 Jkt 000000 PO 00000 Frm 00035 Fmt 6633 Sfmt 6602 Y:\BORAWSKI\DOCS\68083.TXT JUNE PsN: JUNEB
32 

bid contract to make sure that whoever comes in with the lowest 

price gets the contract, no matter if one plane is more capable in 

every single area of evaluation; they get very little credit for that. 

I know the Air Force has bent over backwards to be fair about 

this. Human errors occur, and I just don’t think it should besmirch 

the reputation of the Air Force. I do believe that you took appropriate action. 

General Masiello, didn’t the Secretary of Defense send an IRT to 

come and evaluate the accident independently of the people who 

were supervising the contract? 

General MASIELLO. Yes, sir. 

Senator SESSIONS. I just think the Air Force tried to do what 

they could. They notified everybody, they did everything they could 

do. Fortunately, it appears that nothing serious happened that 

jeopardized the fairness of this contract. I think that’s pretty plain. 

Mr. Shirley, the examination report from the Defense Cyber 

Crime Center, Defense Computer Forensics Laboratory, that’s a 

unit that takes pride in its independence and integrity, does it not? 

Mr. SHIRLEY. Yes, sir, it does. 

Senator SESSIONS. You were brought in to independently evaluate what happened. 

Mr. SHIRLEY. That’s correct, sir. 

Senator SESSIONS. You concluded that ‘‘no signs of network connections were disclosed, and no signs of attached storage devices 

were found.’’ That was one of the findings. 

Mr. SHIRLEY. That’s correct, Senator. 

Senator SESSIONS. No sign of any documents being printed were 

found, is that correct? 

Mr. SHIRLEY. That is correct, sir. 

Senator SESSIONS. No trace of K–76B data, other than file 

names, was found on the server’s hard drive. 

Mr. SHIRLEY. That’s correct, Senator. 

Senator SESSIONS. That would indicate that nobody downloaded, 

copied, or stored this information, would it not? 

Mr. SHIRLEY. We saw no evidence of that, sir. 

Senator SESSIONS. That’s pretty conclusive, actually, your ability 

to determine that. I think that’s important. 

I think, General Masiello, Senator Wicker asked you an important question. The document that was revealed when he was opening that file, did that include dramatic, important evidence? Or, 

fortunately, was it something that did not impact the fairness of 

the competition? 

General MASIELLO. I don’t know the relative importance, but 

whether it did affect or establish or create, at minimum, an appearance of unfairness by swapping the same snapshot between the 

companies, the same type of information between the companies, 

that reestablished from the Air Force perspective fairness in the 

competition. 

Senator SESSIONS. With regard to the parties who are aggressively competing for this, and, I hope, submitting the lowest possible bids, for the benefit of America and the taxpayers, they can 

possibly submit, because that’s what it’s going to take to win this 

contract—I understand there was a 10-day formal complaint peVerDate Aug 31 2005 13:06 Sep 06, 2011 Jkt 000000 PO 00000 Frm 00036 Fmt 6633 Sfmt 6602 Y:\BORAWSKI\DOCS\68083.TXT JUNE PsN: JUNEB
33 

riod. Maybe I’m wrong about that. But, at any rate, neither competitor has filed any kind of formal complaint about this matter. 

General MASIELLO. That’s correct. 

Senator SESSIONS. The individual, as you noted, that saw that 

was removed from the process. 

Mr. Chairman, I think it’s fine that we had the hearing. We were 

briefed on it by the Air Force immediately. General Schwartz testified to it in December of last year. I believe they responded well. 

I think both parties understand what happened and are prepared 

to accept the Air Force’s decision, or else they would have protested. This critically important contract is on the road to final decision. I just hope and pray and expect that the Air Force will do 

so fairly and objectively, and award the contract to the competitor 

that deserves to win. 

I would repeat one more time, when we directed, explicitly, as 

part of the National Defense Authorization Act, that this award of 

the tanker contract would be competed, we knew there were only 

two competitors in the whole world that could provide this. At that 

time, people raised some of these issues. Now, there are arguments 

on both sides, but we made that decision. We’re moving forward to 

the final decision, going forward with the two competitors in the 

world aggressively submitting bids to produce an aircraft, hopefully, that will meet the standards of the Air Force at the lowest 

possible price. 

Our committee certainly has not been shy about it, Mr. Chairman. We’ve done, I think, our duty without politicizing the process, 

to date. I hope that we can continue at that rate. 

Chairman LEVIN. Thank you very much, Senator Sessions. 

Senator McCaskill. 

Senator MCCASKILL. Mr. Chairman, I want to take a moment 

after my friend from Mississippi said that he could see what’s going 

on here. I want to explain, very clearly on the record, what’s going 

on here, from my perspective as a Senator. 

Am I unhappy about the notion that a subsidized company from 

another country is going to compete on a level playing field with 

a company that’s not subsidized? Yes, I’m very unhappy about that. 

I’ve heard a lot of lectures over the last year about socialization 

and the notion that government should not be subsidizing private 

companies. The idea that all of a sudden we can completely ignore 

that and decide, ‘‘Well, socialization’s okay if it’s being done in another nation,’’ and then a company that’s being subsidized by the 

government of another nation is going to compete on a level playing field with a company that’s a free-market company, I think, is 

absolutely wrong, especially in DOD. 

What if this company was owned by China? Would we take that 

into consideration? Okay, so they’re our allies, and they’re only 

subsidized to the tune of $10 or $20 billion. We don’t take that into 

consideration? I don’t want to hear any more lectures about the 

government’s socialization or subsidization of American companies, 

because if this is not relevant, then we shouldn’t be complaining 

about it. 

That’s what’s going on. These jobs aren’t going to Missouri. This 

tanker wouldn’t be built in Missouri. This tanker’s going to be built 

in another State. What happened here is there was fraud. There 

34 

were criminals. Then the process was not fair, with all due respect, 

Senator Sessions. It wasn’t. 

They didn’t bend over backwards to make the process fair after 

the fraud was found, because, in a very unusual move, one of our 

major defense contractors filed a protest. An independent auditing 

agency said, ‘‘You know what? It was very unfair.’’ That’s what 

happened in 2008. They stacked the deck. 

I’ll tell you, from my standpoint, what I think happened is, they 

were embarrassed. The Air Force was embarrassed that they had 

allowed fraud to go on in this kind of competition, and they overcompensated and said, ‘‘Okay, Boeing, we’re going to make sure 

you don’t get it.’’ They put out a proposal that GAO said every single basis was unfair. 

That’s how we got here. It wasn’t that the Air Force bent over 

backwards to make it fair after the fraud. We have an independent 

evaluation of that. 

I just want to make sure the record’s clear about that, because 

I don’t care where the jobs were going. I don’t think DOD should 

treat companies equally if one is subsidized by a foreign government. I think it’s a bad precedent. I don’t think we should be doing 

it. I think most Americans don’t think we should be doing it. 

I know there are jobs that are going to be had here in various 

States. We all do this around here. We’re competing for jobs, just 

like American companies are competing for jobs. I think, at the end 

of the day, we should be doing everything we can to at least take 

that into consideration, because the lowest and best price is relevant to whether or not they’re subsidized. It’s relevant. 

I wanted to explain what’s going on here from my perspective, 

because these aren’t Missouri jobs. These are not Missouri jobs. I 

think this is a process that has been terribly flawed. 

A lot of what you’ve testified today, I think, is fair. This really 

isn’t a trial, because, frankly, if this were a trial, I could ask a series of leading questions that would highlight what I think is the 

case. A lot of what you’ve testified is that you couldn’t prove that 

EADS didn’t do what they said they did. 

In other words, the computer was on; you can’t prove whether 

they looked at it. There’s no proof, other than the man’s testimony, 

whether he looked at it for 15 seconds or 3 minutes, correct? You 

just can’t disprove what they said, correct? 

Mr. SHIRLEY. Ma’am, I think it would be wise for us to send you 

the specific technical findings, in a question for the record, to clarify that. 

[The information referred to follows:] 

I answered to the committee during testimony that the EADS computer was in 

a powered mode for approximately 20 minutes after a competitor file was opened 

(i.e. a Boeing spreadsheet) and that file was opened for approximately 3 minutes. 

Those responses were predicated on DC3’s forensics findings as of the date of the 

hearing. In the forensic process, DC3’s analyst made technical observations of computer data and correlated those against affidavits provided by EADS. 

The following is the deeper detail behind the response, some of which was not 

technically determined as of the hearing date: 

DC3’s forensics examination determined that the EADS computer indicated the 

Boeing spreadsheet was opened at 9:21.14 (Eastern Standard time as displayed in 

the computer on 1 Nov 2010). It was the analyst’s opinion there was no relevant, 

discernible file activity for approximately 20 minutes at which time the computer 

was shut down. This was the basis for my comment that the EADS computer was 

35 

in a powered mode for approximately 20 minutes. My testimony that the spreadsheet was open for roughly 3 minutes was framed on three available data points: 

one employee’s estimate that he opened the file for 15 seconds, the arrival of a second employee within an estimated 3 minutes, and no contradictory forensic evidence; hence the analyst’s worst case conclusion of 3 minutes of access. 

However, in making this determination the analyst did note what he considered 

to be two superfluous file artifacts, an icon cache file and a .pip file. Subsequent 

to the testimony the .pip file was more accurately identified as Excel12.pip, a file 

Microsoft Excel uses to store menu preferences. The .pip file becomes more probative in further ascertaining the specific length of time the spreadsheet file was 

open. This is because the .pip file is only modified when the Excel program itself 

is closed. DC3’s analyst was only able to draw this specific conclusion based on posttestimony technical consultation with Microsoft Corporation experts who developed 

the software. As previously indicated, the analyst confirmed the spreadsheet file 

was opened at 9:21.14. He was able to confirm the .pip file was simultaneously created, modified, and accessed at 9:21.40. According to the Microsoft consultation, the 

.pip file is only updated when the Excel program is closed and the time of 9:21.40 

becomes definitive for file closure. As a result, the analyst was able to further narrow the 3-minute window, described in testimony, to 26 seconds. This finding is 

clearly consistent with the statement by the EADS employee who estimated he 

opened the spreadsheet for approximately 15 seconds. However, this specific data 

was not available by the date of the hearing, hence the reference to the 3-minute 

window. 

Mr. SHIRLEY. I did not read that employee’s statement. I did not 

see that material. The aspect that he looked at it fairly briefly, 15 

seconds, is something that I understand from the conversations relating to preparing for this. 

We had each company’s computer that was forwarded to us, 

based on the agreement of the companies and the Program Office, 

and delivered to our lab. Then we subjected each of those company’s computers to a detailed forensic examination that’s outlined 

in a very exhaustive technical report. 

I did not review the specific details of the entirety of that report 

out of a concern that it had source selection or other proprietary 

material. I wanted to understand that, in directing the assets of 

our lab and our process, that we received those computers in the 

right fashion, that we looked at those with the right subject matter 

experts, that could deliver a technical report consistent with our 

processes and procedures; and then, under the specific direction of 

our lab director, that process was conducted and we rendered the 

technical report as a result of that process. 

I believe I mentioned earlier that, from that technical report, the 

only files opened were the files that were identified in each of the 

respective written statements, and that the files were only opened 

for the time suggested by each of the respective companies. 

Senator MCCASKILL. Wait just a minute there. I understand that 

they were opened for that period of time. But the only knowledge 

we have about how long the screen was looked at is what the individual said. 

Mr. SHIRLEY. Yes. 

Senator MCCASKILL. We have no way of knowing whether they 

looked at that screen for 15 seconds or whether they looked at it 

for 3 minutes. 

Mr. SHIRLEY. Senator, you’re precisely correct. 

Senator MCCASKILL. Right. Okay. That’s what I wanted to establish. 

Mr. SHIRLEY. Yes, ma’am. 

36 

Senator MCCASKILL. Could EADS have adjusted their final and 

best offer? This is my question; it’s a yes-or-no question. Could 

EADS have adjusted their final and best offer based on the IFARA 

data, General? 

General MASIELLO. Ma’am, now that they have an exchange of 

the information, both offerors have the opportunity to adjust their 

proposals. 

Senator MCCASKILL. I understand now. 

But let’s assume that after someone looked at the screen, could 

they have adjusted their data? Or could they have adjusted their 

final and best offer? 

General MASIELLO. I don’t know, because I don’t know how much 

information was revealed in the quick amount of time that they 

looked at the information. 

Senator MCCASKILL. Do you believe, based on the IFARA data 

that was on the page, that 3 minutes would be enough time to 

memorize that data? 

General MASIELLO. I can’t speak for the individual. 

Senator MCCASKILL. I don’t want to ascribe nefarious motives to 

this company. 

I am just frustrated, because I’m embarrassed at how this process has happened from the beginning to this moment. I am very 

exercised about the notion that we are not going to have a policy 

in this country that doesn’t take into account, when we are having 

a competition, that one company is subsidized to a very large extent. If we were subsidizing Boeing to this extent, there’d be press 

conferences going on around here about how this is a subsidization 

bailout and the government shouldn’t be in private companies’ 

businesses. But somehow it’s okay now. I just don’t get that inconsistency. That’s why I’m as exercised as I am. 

Thank you very much, Mr. Chairman. 

Thank you all. I understand you’re here and my passion about 

this has very little to do with the fine work you’ve done preparing 

for this hearing and the efforts you’ve made after this unfortunate 

incident. But, nonetheless, I think it’s very important that I explain what’s going on with this Senator. 

Thank you very much, Senator Levin. 

Chairman LEVIN. Thank you, Senator McCaskill. 

Senator SESSIONS. Mr. Chairman, could I offer for the record the 

GAO report on the protest previously? It found 8 violations out of 

111 complaints. They were very close questions, in my view, whether that protest should have been upheld. I don’t think the Air Force 

deserves as much criticism as my colleague suggests. 

Also, when I was referring, Senator McCaskill, to bending over 

backwards, I really thought I meant post-protest. 

Senator MCCASKILL. I would agree with you on that. 

Chairman LEVIN. That will be made part of the record. 

[The information referred to follows:] 

37 


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Chairman LEVIN. Senator Wicker. 

Senator WICKER. I appreciate Senator Sessions making that a 

part of the record, and for the committee accepting it without objection. 

Someone should correct me if I’m mistaken, but the information 

provided to me by my staff is that in September WTO ruled that, 

in fact, Boeing received illegal aid from the U.S. Government, and 

that, as a matter of fact, WTO has made findings against both of 

these competitors with regard to improper aid from their governments. I stand to be corrected, but that’s the information I have. 


127ful19.eps
52 

The information that I also have is that the Secretary of Defense 

has determined that these WTO rulings against both competitors 

will not be a factor in the competition. 

A determination was made in 2008, by the independent analysts 

at the Acquisition Office, that, in fact, EADS and their partner at 

the time had a bid for the best aircraft. I thought the criteria 

should be what’s best for the U.S. Air Force, what’s best for the 

fighting men and women who are going to depend on this, and 

what’s best for national security. In my judgment, that decision 

was made independently and correctly. 

By kicking the can down the road now to 2011 there is a real 

risk, Mr. Chairman, that the acquisition for major projects such as 

this, will always be called into question. I fear that we’ve done 

great damage to the future of acquisition in DOD. 

Let me make a final point about the 3 minutes versus the 20 

minutes versus the 15 seconds. That information has now been 

shared with both companies. Is that correct, General? 

General MASIELLO. Yes, Senator. That’s correct. 

Senator WICKER. So, it wouldn’t matter if the EADS employee 

had looked at the data for 3 hours or for 3 days. Each company 

now has that one little bit of information from the other company. 

They’ve had it, and they could analyze it until the wee hours of the 

morning. Is that correct? 

General MASIELLO. That’s correct, sir. 

Senator WICKER. I appreciate what the Air Force has done. 

Clearly, human error is, unfortunately, going to happen. Anytime 

an organization is shot through with people, you’re going to have 

human error occur. 

I appreciate what the Air Force has done. They’re my branch too. 

I love them all, but as Senator Graham said, I’m an Air Force veteran and an Air Force Reserve veteran, and I think that the Air 

Force acted very professionally and has corrected this inadvertent 

mistake. 

Thank you, Mr. Chairman. 

Chairman LEVIN. Thank you very much, Senator Wicker. 

For the record, let me just put in a chronology here, because this 

committee has been following the tanker modernization program 

closely for a number of years, obviously. 

In 2002 and 2003, we directed a series of reviews. We held hearings that identified serious problems with the sole-source lease 

originally proposed by the Air Force. This ultimately led, or helped 

to lead, to the cancellation of the contract. That was the time when 

the corruption was discovered. That was described earlier today, 

that this committee played an important role in uncovering that; 

and Senator McCain, particularly, took the lead on that, but a 

number of us very much supported that effort. 

In 2007 and 2008, we closely followed the Air Force’s unsuccessful second attempt to award a tanker contract. It was unsuccessful 

because GAO upheld the protest to that award. 

Now we’re trying to do what we can to get on the record for consideration the facts that surrounded this release of information 

that obviously never should have taken place. There was some significant incompetence that led to this release of information. Everybody acknowledges it shouldn’t have been. 

53 

Whether or not the effort of the Air Force to level the playing 

field, in fact, succeeded or not is not a matter for deliberation. 

We’re not looking at that aspect of it. That may or may not be debated by one or more of the parties later on. But, that would be 

the issue, it seems to me, as to whether or not that playing field, 

in fact, has been leveled. There clearly is an attempt to level it. I 

commend the Air Force for trying to do that. But, whether or not, 

in fact, it has been leveled, or whether there was some either advantage during that 21-day period that existed is another issue. 

This analogy probably doesn’t work at all, but you can give somebody who is wealthy a dollar, and you can give somebody who is 

broke a dollar; the fact that you gave them both a dollar clearly 

advantages the person who’s broke more than the person who’s 

wealthy. But, you gave them both a dollar. 

In this case, I have no opinion on this question, but it seems to 

me it could be an issue as to whether or not the exchange of the 

same information advantages one party more than the other, for 

whatever reasons could exist. 

The intent to level the playing field is clear. That’s clear. The attempt to do that is the right thing to do. But, whether it succeeds 

or not is a different issue, one that I’m not able to expound upon, 

because I’d have to know exactly what those arguments are. I think 

we have to at least leave open that possibility. 

My colleagues, I thank you all. 

I want to thank our witnesses for their presence here today, for 

coming during this weather challenge. I know, particularly for one 

of you, you came a long distance, and maybe had no sleep. I won’t 

identify which of the two of you it is, because both of you deserve 

credit for your testimony. I very much appreciate it. 

We will stand adjourned. 

[Questions for the record with answers supplied follow:] 

QUESTIONS SUBMITTED BY SENATOR JAMES M. INHOFE

INTEGRATED FLEET AIR REFUELING ASSESSMENT

1. Senator INHOFE. Major General Masiello, are all proposed tankers considered 

using the Integrated Fleet Air Refueling Assessment (IFARA) model held to the 

same criteria running the wartime scenarios? If not, what are the differences? 

General MASIELLO. The ground rules for the IFARA assessment are published in 

the Request for Proposal (RFP). The ground rules are applied consistently to all 

offerors. It is only the offerors’ unique proposed aircraft that drive different IFARA 

Fleet Effectiveness scores. 

2. Senator INHOFE. Major General Masiello, during the competition for the KC– 

X, has the IFARA model and guidelines ever been modified? If so, what was modified and why? 

General MASIELLO. There were three RFP amendments that affected the IFARA 

assessment. In Amendment 2, the Air Force corrected transposed base information 

on two bases. Amendment 3 more clearly defined the configuration, with regards to 

Large Aircraft Infrared Countermeasures defensive systems, to use in the IFARA 

analysis. Finally, Amendment 4 corrected a spreadsheet that had a note, which referenced four priority bases, when in fact, the RFP scenario contained five bases; 

only the note was in error. 

3. Senator INHOFE. Major General Masiello, does IFARA determine how many 

tankers it takes to accomplish the mission? 

General MASIELLO. Yes. IFARA computes how many tankers are required to accomplish a classified scenario made up of four theaters. The scenarios and ground 

rules were established as part of DOD’s 2005 Mission Capability Study and remain 

valid today. The IFARA process generates a Fleet Effectiveness Value by dividing 

54 

the number of KC–135R tankers to accomplish the four scenarios by the number 

of offeror-proposed tankers to accomplish all four scenarios. 

4. Senator INHOFE. Major General Masiello, does the number of tankers required 

impact the total evaluated price which the source selection is based on? 

General MASIELLO. Yes. Per Section M of the RFP, the offeror with the lower 

number of tankers will receive a credit equal to the difference in tankers required 

multiplied by the average price of each tanker proposed. 

FEDERAL ACQUISITION RULE

5. Senator INHOFE. Major General Masiello, I believe Federal Acquisition Rule 

(FAR) 3.104–4 covers disclosure, protection, and marking of contractor bid or proposal information and source selection information. It states, ‘‘Except as specifically 

provided for in this subsection, no person or other entity may disclose contractor bid 

or proposal information or source selection information to any person other than a 

person authorized, in accordance with applicable agency regulations or procedures, 

by agency head or the contracting officer to receive such information.’’ Was the FAR 

violated by the unintentional disclosure of the IFARA? If so, what is the consequence of violating this FAR? 

General MASIELLO. The inadvertent disclosure did not comply with the FAR. 

Therefore, the Air Force took numerous actions, including asking for an outside Office of Secretary of Defense (OSD)-led investigation, obtaining written statements 

and certifications from the offerors, and obtaining computer forensic analysis by the 

Defense Computer Forensics Laboratory. In the end, the Air Force Contracting Officer determined, and the Head of Air Force Contracting concurred, there was no intentional Procurement Integrity Act violation and that the procurement could continue, because there was no impact to the integrity of the source selection. However, 

to eliminate even the appearance of an unlevel playing field, the Air Force provided 

each offeror the same IFARA information about the other offeror. Each offeror was 

also afforded the opportunity to update any aspect of its proposal. 

RELEASE OF IFARA DATA

6. Senator INHOFE. Major General Masiello, I remain concerned about the release 

of the IFARA data and any impact it could have on the overall award of the KC– 

X contract. It could directly impact a bidder’s strategy for establishing its final price 

which is due this month. Given the unfortunate circumstances surrounding the release of the IFARA information, would it not be best to eliminate the IFARA from 

the evaluation process? 

General MASIELLO. No. IFARA uniquely measures the integrated capability of a 

fleet of tankers in wartime scenarios. Elimination of IFARA could result in significant operational capability being eliminated by all offerors. The Air Force believes 

the actions taken level the playing field. Further, all offerors equally had several 

opportunities to update any part of their proposal after the playing field was leveled. 

7. Senator INHOFE. Major General Masiello, can someone guarantee that the inappropriate and unauthorized release of the proprietary data did not give one contractor an unfair advantage in preparing its bid for the tanker contract or insight 

into the other competitor’s bid strategy? 

General MASIELLO. Because no price, technical, military construction, or fuel efficiency information was disclosed, because the IFARA information is similar to what 

was disclosed in the previous source selection, and because all offerors were allowed 

to update any aspect of their proposal, the Air Force does not believe there is a competitive advantage to any offeror. 

8. Senator INHOFE. Major General Masiello, after the incident, according to your 

written testimony, the Air Force purposefully released each competitor’s proprietary 

IFARA data to the other competitor to level the playing field—the summary page 

which was an Excel spreadsheet. Given the sensitivity of the data, did you inform 

the contractors ahead of time that you were going to do this and give them an opportunity to respond? 

General MASIELLO. No. The offerors were not given advance notice nor provided 

an opportunity to respond. The Government’s decision as to how to proceed to level 

the playing field was determined to be appropriate and advance notice and opportunity to respond were not required by any law or regulation and could have reVerDate Aug 31 2005 13:06 Sep 06, 2011 Jkt 000000 PO 00000 Frm 00058 Fmt 6633 Sfmt 6621 Y:\BORAWSKI\DOCS\68083.TXT JUNE PsN: JUNEB
55 

sulted in an offeror essentially vetoing the way ahead, thereby precluding the Government from proceeding as necessary. 

INVESTIGATION

9. Senator INHOFE. Major General Masiello, I understand an investigation was 

conducted after the inadvertent release of the IFARA data. Who conducted the investigation? 

General MASIELLO. OSD/Defense Procurement and Acquisition Policy led an independent assessment in response to a request by the Air Force. The KC–X Contracting Officer and Air Force Head of Contracting reviewed the results of this assessment and its recommendations. No intentional Procurement Integrity Act violations were found and all OSD recommendations were adopted. 

10. Senator INHOFE. Major General Masiello, when was the investigation started 

and completed? 

General MASIELLO. The OSD independent review of potential Procurement Integrity Act violations was requested on 9 November 2010. This investigation concluded 

18 November 2010. 

11. Senator INHOFE. Major General Masiello, who has been provided a full copy 

of the investigation report on the inadvertent disclosure, including company statements, statements from individual employees, forensic analysis of computers, and 

analyses and conclusions? 

General MASIELLO. The OSD investigative report, including all attachments and 

statements, were reviewed by the Contracting Officer, the Air Force Head of Contracting, Air Force and OSD Legal Counsel, and the KC–X Source Selection Authority. Subsequent to the 27 January 2011 hearing, this document was reviewed by the 

OSD Office of the Inspector General. Officials from both offerors were afforded the 

opportunity to review Defense Criminal Analysis Reports on their computers. Redacted versions (to remove source selection sensitive and classified information) of 

the OSD report were also provided to the Senate Armed Services Committee. 

DATA FILES ACCESSED

12. Senator INHOFE. Mr. Shirley, during your testimony you stated that one file 

was accessed for 15 seconds and then you clarified that statement and said 3 minutes. What was the length of time the file was accessed? 

Mr. SHIRLEY. I answered to the committee during testimony that the European 

Aeronautic Defence and Space (EADS) company computer was in a powered mode 

for approximately 20 minutes after a competitor file was opened (i.e. a Boeing 

spreadsheet) and that file was opened for approximately 3 minutes. Those responses 

were predicated on DC3’s forensics findings as of the date of the hearing. In the 

forensic process, DC3’s analyst made technical observations of computer data and 

correlated those against affidavits provided by EADS. 

The following is the deeper detail behind the response, some of which was not 

technically determined as of the hearing date: 

DC3’s forensics examination determined that the EADS computer indicated the 

Boeing spreadsheet was opened at 9:21.14 (Eastern Standard time as displayed in 

the computer on 1 Nov 2010). It was the analyst’s opinion there was no relevant, 

discernible file activity for approximately 20 minutes at which time the computer 

was shut down. This was the basis for my comment that the EADS computer was 

in a powered mode for approximately 20 minutes. My testimony that the spreadsheet was open for roughly 3 minutes was framed on three available data points: 

one employee’s estimate that he opened the file for 15 seconds, the arrival of a second employee within an estimated 3 minutes, and no contradictory forensic evidence; hence the analyst’s worst case conclusion of 3 minutes of access. 

However, in making this determination the analyst did note what he considered 

to be two superfluous file artifacts, an icon cache file and a .pip file. Subsequent 

to the testimony the .pip file was more accurately identified as Excel12.pip, a file 

Microsoft Excel uses to store menu preferences. The .pip file becomes more probative in further ascertaining the specific length of time the spreadsheet file was 

open. This is because the .pip file is only modified when the Excel program itself 

is closed. DC3’s analyst was only able to draw this specific conclusion based on posttestimony technical consultation with Microsoft Corporation experts who developed 

the software. As previously indicated, the analyst confirmed the spreadsheet file 

was opened at 9:21.14. He was able to confirm the .pip file was simultaneously creVerDate Aug 31 2005 13:06 Sep 06, 2011 Jkt 000000 PO 00000 Frm 00059 Fmt 6633 Sfmt 6621 Y:\BORAWSKI\DOCS\68083.TXT JUNE PsN: JUNEB
56 

ated, modified, and accessed at 9:21.40. According to the Microsoft consultation, the 

.pip file is only updated when the Excel program is closed and the time of 9:21.40 

becomes definitive for file closure. As a result, the analyst was able to further narrow the 3-minute window, described in testimony, to 26 seconds. This finding is 

clearly consistent with the statement by the EADS employee who estimated he 

opened the spreadsheet for approximately 15 seconds. However, this specific data 

was not available by the date of the hearing, hence the reference to the 3-minute 

window. 

13. Senator INHOFE. Mr. Shirley, what was the name of the file and extension? 

Mr. SHIRLEY. K–76B Tanker Fleet Effectiveness Table 101101.xls 

14. Senator INHOFE. Mr. Shirley, was that file located in a folder/subfolder or was 

it readily accessible once the disk was open? 

Mr. SHIRLEY. When the disk was opened, one folder was visible titled K–76B 

IFARA Results Release 101101. The Tanker Fleet Effectiveness Table 10/101.xls. 

15. Senator INHOFE. Mr. Shirley, how many folders and files were on the disks 

provided to Boeing and EADS? 

Mr. SHIRLEY. EADS and Boeing copies of the K76 disk contained 378 files in 6 

folders. Their copies of the K–30 disk contained 355 files in 6 folders. However, 

there is no forensic evidence that Boeing accessed any of the files or folders other 

than they got to a point they could see the K–30B IFARA Results Release 101101 

folder being listed. In addition, there is no forensic evidence that EADS accessed 

any files or folders other than the K–76B Tanker Fleet Effectiveness Table 

101101.xls spreadsheet that was located within the K–76B IFARA Results Release 

101101 folder. 

16. Senator INHOFE. Mr. Shirley, what did the overall directory of the disk look 

like? 

Mr. SHIRLEY. When opened by a user using Windows Explorer, the disk provided 

to EADS had one folder titled: ‘‘K–76B IFARA Results Release 101101.’’ Within that 

folder, there were two folders—‘‘Depot’’ and ‘‘CMARPS analysis. There were also two 

files—‘‘K–76B IFARA Results Read Me 101101.doc’’ and ‘‘K76 Tanker Fleet Effectiveness Table 101101.xls’’ The latter is a Boeing spreadsheet. There is one file within the Depot folder and 3 folders and 375 files within the CMARPS analysis folder. 

Forensic analysis showed that only the folder ‘‘K–76B IFARA Results Release 

101101’’ and the file ‘‘K76 Tanker Fleet Effectiveness Table 101101.xls’’ were 

accessed. 

QUESTIONS SUBMITTED BY SENATOR JEFF SESSIONS

17. Senator SESSIONS. Mr. Shirley, how long was each company’s computer that 

was analyzed by the lab powered up and operating? 

Mr. SHIRLEY. The EADS computer was in a power mode for approximately 20 

minutes after a competitor file was opened. Prior to that file being opened, however, 

the computer was powered on for approximately 27 minutes on the night in question 

during which time it was used to view EADS tanker procurement material. It was 

also powered up the next day for approximately 5 hours and 9 minutes but there 

is no forensic evidence that Boeing material was accessed. 

The Boeing computer was powered on for 26 minutes and was not used again before it was sent to DC3/DCFL. 

18. Senator SESSIONS. Mr. Shirley, since both companies acknowledge inserting 

their competitor’s disk into their respective computers, how long was each disk inserted into their respective computer before being removed? 

Mr. SHIRLEY. There is no way to tell forensically when a disk is inserted or removed. All we were able to see is the activity with the files themselves. If a disk 

was inserted but there was not activity with the files, there would be no record of 

the disk ever being inserted. 

19. Senator SESSIONS. Mr. Shirley, do you have forensics-based information which 

would appear to be inconsistent with the EADS North America statement that the 

Boeing IFARA data file was opened and then closed within 15 seconds? 

Mr. SHIRLEY. No, Senator, there is no inconsistent forensic evidence to the EADS 

statement. I answered to the committee during testimony that the EADS computer 

was in a powered mode for approximately 20 minutes after a competitor file was 

57 

opened (i.e. a Boeing spreadsheet) and that file was opened for approximately 3 

minutes. Those responses were predicated on DC3’s forensics findings as of the date 

of the hearing. In the forensic process, DC3’s analyst made technical observations 

of computer data and correlated those against affidavits provided by EADS. 

The following is the deeper detail behind the response, some of which was not 

technically determined as of the hearing date: 

DC3’s forensics examination determined that the EADS computer indicated the 

Boeing spreadsheet was opened at 9:21.14 (Eastern Standard time as displayed in 

the computer on 1 Nov 2010). It was the analyst’s opinion there was no relevant, 

discernible file activity for approximately 20 minutes at which time the computer 

was shut down. This was the basis for my comment that the EADS computer was 

in a powered mode for approximately 20 minutes. My testimony that the spreadsheet was open for roughly 3 minutes was framed on three available data points: 

one employee’s estimate that he opened the file for 15 seconds, the arrival of a second employee within an estimated 3 minutes, and no contradictory forensic evidence; hence the analyst’s worst case conclusion of 3 minutes of access. 

However, in making this determination the analyst did note what he considered 

to be two superfluous file artifacts, an icon cache file and a .pip file. Subsequent 

to the testimony the .pip file was more accurately identified as Excel12.pip, a file 

Microsoft Excel uses to store menu preferences. The .pip file becomes more probative in further ascertaining the specific length of time the spreadsheet file was 

open. This is because the .pip file is only modified when the Excel program itself 

is closed. DC3’s analyst was only able to draw this specific conclusion based on posttestimony technical consultation with Microsoft Corporation experts who developed 

the software. As previously indicated, the analyst confirmed the spreadsheet file 

was opened at 9:21.14. He was able to confirm the .pip file was simultaneously created, modified, and accessed at 9:21.40. According to the Microsoft consultation, the 

.pip file is only updated when the Excel program is closed and the time of 9:21.40 

becomes definitive for file closure. As a result, the analyst was able to further narrow the 3-minute window, described in testimony, to 26 seconds. This finding is 

clearly consistent with the statement by the EADS employee who estimated he 

opened the spreadsheet for approximately 15 seconds. However, this specific data 

was not available by the date of the hearing, hence the reference to the 3-minute 

window. 

[Whereupon, at 11:11 a.m., the committee adjourned.] 

Æ