April 15, 2009 – 11:42 a.m.

House Panel Raises Conflict of Interest Concern at NASA

By Kathryn A. Wolfe, CQ Staff

The House Science Committee is taking aim at NASA over a recent contract award that its chairman says wasn’t scrutinized enough for possible conflicts of interest.

The contract in question, worth $1.2 billion over five years, is for managing and operating NASA’s system of space-to-ground receivers and transmitters that allow the agency to communicate with its spacecraft, including astronauts in orbit.

The contract was awarded to ITT Corp., which beat out Honeywell Technology Solutions, Inc., which had held the contract in various permutations for decades. NASA’s inspector general and the Science Committee are both investigating the matter.

House Science Chairman Bart Gordon , D-Tenn., complained that he had specifically asked NASA to hold off until the investigations were done.

“I am disappointed that NASA chose to award this $1.2 billion contract while both the Committee and the NASA Inspector General’s Office are investigating serious allegations of conflicts of interest that may have affected the procurement,” Gordon said.

A committee aide said the potential conflict of interest arises because ITT was already a space communications systems engineering contractor for NASA. The aide said systems engineers must be scrutinized carefully when bidding on management contracts because they are so close to the agency that the relationship could prejudice the application in their favor.

He added that the committee is examining whether NASA took proper steps to handle the potential conflict of interest before awarding the contract.

“So far looking at NASA’s documents and talking to some NASA officials, we’re very concerned. We want to see more documents, and we haven’t come to any conclusions,” the aide said. “But the initial production of documents from NASA followed by [interviews with] three NASA officials who should know the details led us to believe that this is a problem with the way NASA has managed this contract.”

Honeywell, which lost the contract, was certainly of that opinion, and raised the issue with the Government Accountability Office (GAO).

The GAO examined the issue and on Jan. 27 dismissed most of Honeywell’s claim because of the timing of some of its complaints. However, the GAO did find that NASA had too highly valued ITT’s past performance in other contracts and that could have prejudiced the award. NASA reevaluated this factor on GAO’s recommendation, but did not change the award.

NASA spokesman Michael Curie did not comment on the conflict of interest allegations, but said that it’s “in the best interest of the federal government to complete the competitive procurement process, consistent with GAO guidance.”

Honeywell spokesman Bill Reavis disagreed, saying that as long as investigations are pending, “we believe the decision to award the contract is not in the best interests of NASA nor of the American taxpayer.”