WASHINGTON — Earlier this year, the U.S. Army awarded one of its favored defense contractors, Raytheon, a $70 million contract to develop a new system to combat rocket-propelled grenades (RPGs), which have killed nearly 40 Americans in Afghanistan and more than 130 in Iraq.
The Army insists that Raytheon won the contract fair and square based on its “systems engineering expertise and the discipline which they used in analyzing requirements, threats and potential solutions.”
But an NBC News investigation of the contract selection process reveals that at almost every turn, Raytheon was given a significant competitive advantage over other defense contractors, including an Israeli firm whose system was extensively tested and found to be highly effective.
When contacted by NBC News about this matter, Raytheon said it was not authorized to speak about how its contract was awarded and instead referred all questions to the Army.
Raytheon’s contract is a small but important part of the Army’s massive modernization program called the Future Combat System (FCS), which has been under fire in Congress on account of ballooning costs and what the U.S. Government Accountability Office [link to PDF report] found are worrisome procurement practices that allow weapons manufacturers to effectively tell the Army which weapons to buy.
Last year, the Army planned to test competing RPG defense systems in what officials refer to as a "shoot-off rodeo." At the time, Raytheon’s system was still on the drawing board, and the Army opted to cancel the test.
In a statement to NBC News, the Army explained that the cancellation was “primarily because of concerns related to cost, supportability, practicality and fairness.” But Pentagon officials involved in past shoot-offs say money should not have been a factor since defense contractors, not the Army, normally shoulder the cost of system vs. system competitions.
After canceling the shoot-off, the Army chose to conduct what it called a “traditional source selection.” We asked Col. Donald Kotchman, who heads the Army’s effort to field an RPG defense system, about that process.
Lisa Myers: Was the Raytheon system tested by the Pentagon?
Col. Donald Kotchman: The Army did not specifically test the Raytheon system.
Instead, Raytheon tested its own system this February.
Myers: How well did the Raytheon system do in its own testing?
Kotchman: I don't have that information.
Myers: Were there any Pentagon officials present for the Raytheon testing?
Kotchman: I do not know.
Video obtained by NBC News shows that Raytheon’s system was not tested under the most trying of conditions. It was mounted on a test stand, not on a moving vehicle.
By contrast, a different Pentagon division, the Office of Force Transformation (OFT) tested a competing Israeli system — called Trophy — and found it at least 98 percent effective against RPGs in near-battlefield conditions.
A number of senior Army officials were supposed to attend those March 2006 tests but canceled.
In a statement, the Army said it does “not know who was invited, who declined to attend, and why they did or did not attend the demo.”
But an e-mail obtained by NBC News provides some insight. In it, a senior Army official writes that the Army “just awarded a contract to Raytheon” and wanted to “focus all efforts toward supporting the fielding of the Raytheon ... solution.” Accordingly, the official went on to say, “I don’t want anyone to think I’m supporting [Trophy].”
Nevertheless, OFT officials were so impressed with Trophy’s performance that they decided to buy several systems — which cost $300,000-$400,000 each — for battlefield trials on Stryker armored vehicles in Iraq next year. That plan was eventually scuttled by the Army.
The selection team
In May, a technical team was chosen and given the task of evaluating competing RPG defense systems. But here again, Raytheon had a leg up.
Myers: Do you know how many of the 21-person technical team worked for Raytheon?
Kotchman: To the best of my knowledge, none.
Army documents obtained by NBC News, however, reveal that nine of the 21 technical experts — as well as all the administrative personnel — were from Raytheon. The team ultimately concluded that of the seven RPG defense systems examined, Raytheon’s was “the clear winner.”
Raytheon’s “Quick Kill” solution — which the Army concedes will not be fielded before 2011 at the earliest — won out over Trophy, the Israeli system championed by the Pentagon’s Office of Force Transformation.
Myers: It appears as though Raytheon was allowed to select itself.
Kotchman: Idon’t know that to be a fact, and so I really can't comment on it.
The Army later told NBC News that, its own document notwithstanding, the technical team actually consisted of 30 people plus two administrative assistants and that a total of eight people were from Raytheon.
“That sure doesn't look like an objective panel to me,” says Phil Coyle, a former principal adviser to the secretary of defense on weapons testing and evaluation who is now with the Center for Defense Information. “It just doesn't pass the ho-ho test when you have that many people from one company on the selection panel and then that company is the one that's chosen.”
Myers: Pentagon officials we spoke to said that the Army, quote, cooked the books on this.
Kotchman: I don’t know the basis of their assertion that the books were cooked and so ... I can’t confirm that.
Recently, the Senate entered the fray and in what congressional officials say was a slap at the Army, ordered Secretary of Defense Donald Rumsfeld to put together a new, independent evaluation of all RPG defense systems, foreign and domestic.
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