Looks and Smells Like a Mafia

Remember that GAO protest about AEGIS work we've discussed a bit on the blog? Basically Raytheon isn't happy the Navy is issuing nothing but sole source contracts on AEGIS work to Lockheed Martin, and is protesting with the GAO to get some of the work. They should, every decision made right now in the Navy gives the impression of an AEGIS mafia, a term I'm sure none of us have ever heard used before.

The Navy is trying to have Raytheon's protest thrown out. This is quite diplomatic, in a bulldog kind of way.

The Navy rejected Raytheon's arguments in a strongly worded motion to dismiss filed October 22 with the GAO, the nonpartisan congressional agency which rules on federal contract disputes. A heavily redacted version was obtained by Reuters.

"The Navy properly determined that only Lockheed Martin Maritime Systems and Sensors is capable of performing its requirements because Raytheon Integrated Defense Systems failed to respond adequately to the Navy's requests for information regarding its ability to meet the government's requirements," the Navy said in the response.

The Washington Post article expands on that point.

"Raytheon IDS squandered that opportunity, however, choosing instead to disregard the Navy's request for further information, and renewing its speculative promise to assemble a national team" that was to include Lockheed Martin and General Dynamics , the only other company that had expressed interest in the Aegis upgrade work.

Then we get to the heart of Raytheon's argument, which I guess the Navy doesn't quite understand very well.

The Navy also said a team including Lockheed, Raytheon and General Dynamics would be "fundamentally anti-competitive."

But such a move would not be without precedent.

When Raytheon won a contract to develop the combat system for the new DDG-1000 destroyer, the Navy ordered it to give Lockheed a share of the work, and Lockheed ultimately wound up with about a 40 percent share of the work.

So in the opinion of the Navy, sole-source contracts are not "fundamentally anti-competitive" but cooperative work between the big contractors would be "fundamentally anti-competitive," except in the case of the DDG-1000 where part of the radar system was shared with Lockheed Martin? Is it out of bounds to ask if this is a silent Vern Clark backlash by the Navy? Seriously...

The article goes on to note the following is in the report:

The Navy said Raytheon had offered no evidence that it had negotiated agreements with the other companies, and it had no reason to believe that Lockheed, the sole developer and integrator of the Aegis system, would agree to such a deal.

So the Navy is blaming Raytheon for not trying to negotiate with Lockheed Martin for AEGIS work? Who the heck is issuing the contracts? I don't know if that is article spin, as it is a summery of the redacted report, but that would be an odd argument...

Except the whole PR war on Raytheon is odd to begin with. Virtually every claim the Navy has made about Raytheon in regards to AEGIS or BMD, in both the AEGIS modernization work and the DDG-1000 program, have been attacks on the capabilities of the systems Raytheon is developing. The Navy has basically said no one but Lockheed Martin can do it, and we will attack anyone who tries to compete for that work. And oh btw, cooperative work would be "fundamentally anti-competitive" but sole-source contracts are not "fundamentally anti-competitive?"

The Navy's claims of capabilities regarding BMD and DDG-1000 have all been discredited, even the Navy has backtracked from previous arguments to the new but equally silly position that ~$500 million to add BMD is 'too expensive'. I'd buy that, if we weren't already spending at least $5 billion to upgrade the existing baseline of AEGIS to be BMD capable.

The final GAO decision should be interesting, because this legal trick will probably fall short. The tip is in the language, if the Navy had a good case, they wouldn't fall back on the position of being unnecessarily harsh of Raytheon. What the Navy needs to do s line up their PR so it isn't so consistently inconsistent. Maybe they should outsource that to Lockheed Martin, because their PR kicks ass.