Getting Buyers in Line

A year before Darleen Druyun retired from the Air Force in 2002, Defense procurement leaders had become concerned that she exercised too much control over the service's weapons purchases, which account for most of its $53.6 billion annual procurement budget. Michael Wynne, acting undersecretary of Defense for acquisition, technology and logistics, and Marvin Sambur, assistant secretary of the Air Force for acquisition, began reducing Druyun's authority. When she left to take a $250,000-a-year job managing Boeing's missile defense programs, Wynne and Sambur thought their worries were over.

Then, in late 2003, Boeing fired Druyun for ethics lapses and federal investigators began examining how the firm came to hire her. In October, she was fined and sentenced to nine months in federal prison for negotiating her move to Boeing while still overseeing its Air Force contracts. At her sentencing, Druyun revealed having favored Boeing in at least four multibillion-dollar contract negotiations dating back to 2001. Wynne says he was "shocked and chagrined" by Druyun's admissions. "This is very different than soliciting a job, and in acquisition this is a situation we have to consider a crisis," he says.

Michael Sears, the former Boeing chief financial officer who was fired along with Druyun, pleaded guilty in federal court on Nov. 15 to aiding and abetting her illegal employment negotiations. He faces up to five years in federal prison, although sentencing guidelines suggest he's likely to serve fewer than six months. Sentencing was slated for January.

Sen. John McCain, R-Ariz., said in a stinging speech on the Senate floor in November that top Air Force leaders, not just Druyun, should be held responsible for the scandal. "I simply cannot believe that one person, acting alone, can rip off taxpayers out of possibly billions of dollars. This appears to be a case of either a systemic failure in procurement oversight, willful blindness, or rank corruption," he said.

Several days before McCain's remarks, Air Force Secretary James Roche and Sambur, Druyun's boss, announced that they would resign in January. Both men have been subjects of congressional, federal and Defense inspector general investigations of their roles in promoting a controversial deal for the Air Force to spend $20 billion to lease rather than buy new tanker aircraft from Boeing. Druyun has admitted to favoring Boeing in the deal as a "parting gift" to her future employer.

Sambur recently was cleared by the IG of wrongdoing in the proposed leasing arrangement, while Roche's role remains under scrutiny. The Pentagon has decided that whatever approach it takes to upgrading the Air Force's aging KC-135 tanker aircraft fleet will involve open competition for the work.

The Air Force's problems, along with purchasing improprieties at other agencies, have raised ethics awareness and trepidation among procurement officials across government, according to a recent survey by the Professional Services Council, an Arlington, Va.-based industry group, and consulting firm Grant Thornton. Ethics concerns moved "if not to the forefront, at least onto the radar screen," said procurement executives, who rarely brought up the issue when polled in 2002. Some respondents to the survey released in October worried that "overreaction to limited cases of abuse could lead to new oversight regimes that would undo the cost savings and progress toward openness" achieved under procurement reforms of the 1990s.

Defense officials are taking several far-reaching actions in the wake of Druyun's admissions. "We've got to answer the question of 'How did the system let this happen?' " Wynne says. The Pentagon will review all contracts Druyun was involved in since she became deputy assistant secretary for Air Force acquisition and management in 1993. Her old job has been eliminated. An independent team, led by Sally Flavin, deputy director of the Defense Contract Management Agency, will conduct the review, due to be completed in January. Contractors' protests related to the Druyun scandal-including those already filed by Lockheed Martin, L-3 Communications Holdings Inc., and BAE Systems-will be heard by the Government Accountability Office, rather than the Air Force, to ensure impartiality. Wynne has asked the Defense Science Board to review by February the acquisition systems of all the military services.

In the meantime, the Air Force will continue changes designed to improve an acquisition program that brings in weapons programs an average of 36 percent over budget and 50 percent later than scheduled. Since the late 1980s, buying and budget decisions were made at Air Force headquarters in the Pentagon. The Air Force Materiel Command, with a $44 billion budget, 89,000 military and civilian employees, and research laboratories, test facilities and depots nationwide, was left to build, test and maintain weapons with minimal interaction with the Pentagon buyers who acquired them.

Now, civilian program executive officers are moving from the Pentagon to AFMC field installations. They still report to the assistant secretary for acquisition, but they're in direct contact with those who develop, test and maintain weapons. The command also is reorganizing to more closely resemble the rest of the Air Force. Weapons program officers will be organized into wings, groups and squadrons like the operational side of the service. Restructuring will improve the organization's budgeting, says AFMC Commander Gen. Gregory Martin. "What I am putting in place is a regulated process by which we understand how many resources it will take to do the job," Martin says. He he does not expect jobs to be eliminated as a result of the new budgeting formula.