By Marina Malenic

The Air Force has already begun incorporating lessons from its troubled KC-X aerial refueling aircraft contract selection into other large-scale acquisition programs, Maj. Gen. Scott Gray, the director of global reach programs in the Air Force acquisitions office, said yesterday.

The KC-X aftermath is already affecting the process by which the Air Force is selecting a contractor for its combat search-and-rescue (CSAR-X) helicopter replacement program, Gray told Defense Daily during an interview at the Pentagon.

Gray reports to the Air Force acquisition executive on airlift, aerial refueling, training and special operations aircraft.

The Government Accountability Office (GAO), Congress’ auditing agency, earlier this summer sustained Boeing’s March 11 protest of the KC-X contract award to Northrop Grumman and industry partner European Aeronautic Defense and Space Co. (EADS). The auditors found that the service “had made a number of significant errors that could have affected the outcome of what was a close competition” and recommended that the bidding process be reopened (Defense Daily, June 19).

Gray said that, in the wake of that decision, acting Air Force Secretary Michael Donley directed the Air Force acquisitions office to examine the GAO’s findings for “any lessons learned and [said], ‘Let’s see if we can apply them to all Air Force acquisition programs that are ongoing.'”

Donley told the Senate Armed Services Committee during his confirmation hearing that he had opened the acquisitions review (Defense Daily, July 23).

As a result, the CSAR-X program office at Wright-Patterson AFB, Ohio, examined the GAO’s findings in the KC-X protest. While there have been no changes to the CSAR-X request for proposals (RFP) as a result, according to Gray, the Air Force did implement broad-based improvements to the source-selection process.

Bidders in the CSAR-X competition twice filed protests over award decisions with the GAO (Defense Daily, Aug. 13).

Gray said the most significant change to the CSAR-X acquisition process, which also “will apply to every single acquisition program in DoD,” is a requirement for “much better documentation” of interaction with contractors.

“That was one of the things the GAO found fault with in the Air Force process,” Gray said.

The general said another element that was added to the CSAR-X source-selection process earlier this year was a “peer review” by the Office of the Secretary of Defense. The first of two reviews occurred in March.

“They actually came in, a team from OSD, and took a look at the revised RFP,” he said.

One more OSD peer review is expected in September, prior to the Air Force presenting a final RFP to the competitors.

“We just want to make sure we’ve dotted all the i’s and crossed all the t’s,” Gray said. “So it’s not just external, to the offerers, that we’ve tried to clean [the process] up, it’s also internal that we’ve tried to clean up the lack of communication or the lack of documentation.”

OSD is the lead acquisition authority for KC-X. Defense Secretary Robert Gates last month announced that Undersecretary of Defense for Acquisition, Logistics and Technology John Young would head the source selection (Defense Daily, July 11).

“And that’s with full cooperation of the United States Air Force,” Gray said. “Ms. [Sue] Payton [Air Force acquisition chief] is fully on board with that, was in the room when these discussions were initiated…With the political realities, it was the right thing to do.”

Gray said Payton has been “adamant that we go out and increase the dialogue with these companies.”

“We all know that we’re under a microscope,” he added. “It’s an ongoing process, and Ms. Payton is trying to continually improve Air Force acquisitions.”

The CSAR-X program will also be assessed this fall in a Defense Acquisition Board (DAB) meeting prior to a source selection. The DAB is the Pentagon’s senior acquisitions advisory board and is made up of the vice chairman of the Joint Chiefs of Staff, the service secretaries, and a number of undersecretaries of defense.

While the Air Force hopes to make a final selection this fall, Gray acknowledged that a pending DoD Inspector General’s investigation of possible source selection irregularities could come into play.

“There’s a potential impact [from the report], though I think it is very minimal,” Gray said. “As of today, we have heard absolutely nothing from the DoD IG that would lead us to believe that this is going to impact [the source selection] at all.”

The IG’s draft report is due next month, according to Gray.

“If they come up with anything that should impact [CSAR-X] then that will be a decision point that [Donley] and Sue Payton will have to consider,” he said.

Asked whether he expects another protest of the eventual source selection, Gray said the “climate is ripe for protests” under the Pentagon’s current relationship with its defense-industrial base.

“We live in an environment where you’ve got fewer major contracts and fewer competitors,” he explained. “So, by definition, if you lose out on one of these things, this is going to affect your bottom line financially for years and years to come.”

However, if one of the companies does protest the award, Gray said the “checks and balances” injected into the source selection process to date will “make it harder, I certainly hope, for the GAO to sustain a protest.”

Meanwhile, CSAR-X remains the Air Force’s number-two acquisition priority, directly following KC-X.

Asked whether that priority list is likely to change under new Air Force Chief of Staff Gen. Norton Schwartz, Gray said he has not been informed of any adjustments.

“Those things are pretty well grounded in requirements, and just because the chief of staff has changed I don’t think it’s going to affect these priorities,” said Gray. “He may have a different vector, he may get in there and tweak that, but we have not heard that as of this point.”