Boeing Agrees to Pay U.S. $25 Million in Qui Tam Settlement
On August 13, 2009 the Department of Justice (DOJ) announced a $25 million dollar settlement agreement with Boeing related to a qui tam (whistleblower) lawsuit originally filed by two former Boeing employees. The suit alleged that Boeing installed defective insulation blankets in U.S. Air Force KC-10 aerial refueling aircraft while performing depot maintenance. The DOJ press release also noted that "Auditors found that Boeing inflated estimates of the number of hours needed to perform the blanket kit work and charged an excessive hourly rate for the work." The relators (whistleblowers) will share a bounty of $2.6 million, according to the announcement, which can be found here.
DCMA and DCAA to Merge?
 We have reported several times on the Wartime Contracting Commission, that self-styled "bipartisan, independent entity charged with evaluating and reporting on America's wartime contracting for logistics, reconstruction, and security." Reports are beginning to come out regarding the Commission's latest 2-day hearing on contractor business systems and DOD oversight -- and those reports indicate that the Commission thinks DCMA has failed in its oversight role and should possibly merge with DCAA in order to eliminate "dysfunctionality" between the two DOD agencies. For example, GovExec.com reports that "a lack of cooperation" between DCMA and DCAA "is hindering the oversight of contractors' business systems." The article states that "members of the commission accused DCMA ... of almost uniformly ignoring recommendations from DCAA with regard to the business systems of logistical support contractors," and always siding with contractors by ignoring DCAA audit findings. DCMA, for its part, blamed ambiguous regulations, according to the GovExec.com article, which quotes the DCMA representative as saying, "you can read the DMCA opinion and the DCAA opinion and take a look at what's in the regulations and there's a lot of room for interpretation." DCAA Director April Stephenson called for accountability for DCMA's decisions, according to the article, which also noted that she has shifted from her previous position that all of DCAA's recommendations should be mandatory for DCMA to implement.  The Commission called for the dysfunctional relationship between DCAA and DCMA to come to an end and, according to the report, put the onus on DCMA to resolve the problems. Co-Chair Shays was quoted as saying, "both of you up there, you're on the same team, but it doesn't sound like it and it doesn't look like it. ... With no disrespect to [DCMA], we think there needs to be more adjustment on DCMA's part than on DCAA's part. I think that's fairly clear." Neither Shays nor his Co-Chair Michael Thibault (former Deputy Director of DCAA) addressed recent GAO findings on DCAA's lack of audit quality and independence.The three LOGCAP IV contractors under fire at the hearings (DynCorp International, KBR, Inc., and Fluor) seemed to concur with the Commission's assessment. The GovExec article quotes one representative as saying "a single voice from the government would be a great improvement. ... In my mind the issues we've had fall into a subjective evaluation process that leads to differences of opinion between the contractor and the government and between two government agencies. A single voice would lead to more timely determinations of adequacy." Although a recent Defense Science Board report blasted DOD's "risk averse" and bureaucratic culture as impeding meeting the urgent needs of warfighters, these types of comments and the resulting media reports will do nothing to reduce those impediments. To the contrary, the pressure and scrutiny that suddenly seems to be focused on DCMA should result into even less discretion afforded to contracting officers (and even less incentive to take risks) than is currently the case. See the GovExec.com article here.
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Will VASIMR© Revolutionize Space Flight?
In June 2009, the American Institute of Aeronautics and Astronautics (AIAA) named the Variable Specific Impulse Magnetoplasma Rocket (VASIMR©) one of the “Top 10” emerging aerospace technologies of 2009. The August 10, 2009 edition of Aviation Week & Space Technology (AW&ST) carried a 2 ½ page article on the technology and the company that is developing it, Ad Astra Rocket Co. (located near Houston, Texas with a subsidiary lab in Guanacaste, Costa Rica). The AW&ST article reported that Ad Astra’s technology “offers a potentially less expensive alternative to chemical propulsion” and—more importantly—the technology might lead to vastly increased speeds and thus to incredibly reduced space flight durations. As in: Earth to Mars in 39 days flat. Interested in new technology with such potential, we visited the Ad Astra website to see if the concepts were real and achievable, or if they were simply the starry-eyed dreams of theoretical physicists. Once we finished slowly downloading the company’s content-heavy home page, we learned about Ad Astra (“to the stars”) and its mission, which is “to revolutionize space transportation and exploration”. A lofty goal, indeed. Ad Astra’s proprietary VASIMR© propulsion system consists of three modules: (1) a plasma source cell that injects neutral gases (typically hydrogen, but it could also utilize deuterium, helium, xenon, or argon) and an ionization subsystem that work to create the “stage one” plasma, (2) an “RF Booster” module that uses electromagnetic waves to “energize” (or disassociate atoms) the gas into “stage two” plasma, and (3) a “Magnetic Nozzle” module that directs the plasma into useful thrust via the magnetic field lines of a surrounding superconducting magnet. The company boasts that its technology “has two additional important features that distinguish it from other plasma propulsion systems: 1. Ability to vary the exhaust parameters (thrust and specific impulse) in order to optimally match mission requirements. This results in the lowest trip time with the highest payload for a given fuel load. [and] 2. VASIMR® is driven by electromagnetic (RF) waves and has no physical material electrodes in contact with the hot plasma. This results in greater reliability and longer life and enables a much higher power density than competing designs.” 
©Ad Astra Rocket Co. Pretty cool, but is it for real? According to AW&ST and the company’s website, it is. In July 2009, Ad Astra completed maximum power operation testing of its first 30-kw first stage and started producing thrust with the engine’s 170-kw. second stage. AW&ST reports that, “If successful, efforts to achieve full rated power with combined firing of both stages … will pave the way for a preliminary design review of the first operational Ad Astra hardware early next year.” At that point, the company will begin development of a flight version of its engine, for delivery to the International Space Station (ISS) in 2013. The engine would then undergo space trials, being used to “reboost” the ISS to counter atmospheric drag. AW&ST reports that the company is currently in negotiations with both SpaceX and Orbital Sciences for transportation of the VX-200 engine to the ISS. The space test plans for VASIMR® envision a solar powered plasma rocket. But Ad Astra’s aspirations do not stop there. The company has a dream of nuclear powered space plasma drives that will dramatically change how space flights are conducted by increasing speed and lowering flight durations. And all of this is being done by private industry, NASA having “redirected” its plasma propulsion funding toward the Constellation program. It’s perhaps too early to jump on the Ad Astra VASIMR® bandwagon. But then again, looking at the upcoming U.S. manned space flight “space gap,” perhaps it is several years too late. Visit the Ad Astra website here:
Commission Hears Testimony Blaming Contractors' Internal Control Systems
 Federal Times reported on August 11, 2009 that in testimony before the Commission on Wartime Contracting, DCAA Director April Stephenson blamed "faulty accounting, cost-estimating, purchasing and other business systems" for "millions of dollars" of contractor overbillings to the Department of Defense (DOD). The Federal Times article quotes Director Stephenon's testimony: "When a contractor’s business system and related internal controls are inadequate, the data generated by the contractor’s system is unreliable, which in turn, results in the risk of noncompliances with government laws and regulations, mischarging, fraudulent acts and contract overpayments." We have previously noted the Commission's focus on contractor business systems. Thus, we were not especially surprised by Director Stephenson's testimony. What was surprising was the testimony of DCMA Executive Director David Ricci, who reportedly admitted that his agency has allowed contractors to continue using faulty and unreliable business systems. Federal Times quotes Mr. Ricci as saying, "We've not disapproved any of the systems with these contractors." (In context, it is clear that Mr. Ricci was referring to the systems of the three LOGCAP IV contractors that support troops in the battlefield, but the quote could (and likely will) be taken out of context as referring to the business systems of DOD contractors in general.) According to the Federal Times, "Ricci said that if a contractor submits an action plan to correct problems with a faulty business system, such as a cost-estimating system, DCMA cannot disapprove the system unless there is no progress made to fix the problems." Predictably, the Commissioners piled on DCMA, accusing it of "caving to the contractors and not acting properly on the Defense Department’s behalf," according to the Federal Times article, which quotes Co-Chair Shays (a former member of Congress) as accusing DCMA of being "on the contractor's side." According to Federal Times, "Other commissioners also were outraged by DCMA’s failure to halt use of faulty contractor business systems and its failure to withhold payments to them, if necessary." It is well-known that DCAA has come under fire for inadequacies in its audits. Almost immediately after being on the receiving end of intense criticism related to its alleged audit failures, DCAA began a campaign seemingly designed to deflect attention from itself and onto the contractors it audits, as well as the other DOD agency involved in contract management, DCMA. The Federal Times article indicates that the strategy may be working. It is easy to predict a continued DCAA focus on "inadequate" business systems because, so long as the spotlight is turned on the contractors, DCAA can hide in the darkness. Consequently, contractors must invest in their operational control systems in order to avoid the draconian penalties that Director Stephenson advocates. Although one can take issue with DCAA's concepts of "internal control systems" and "system adequacy" it will not be as easy to fight the unpalatable combination of an aggressive DCAA coupled with a hobbled DCMA that is unwilling to disagree with any DCAA recommendation because of the fear of being labeled as being "on the contractors' side." See the Federal Times article here.
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