Maj. gen. tied to improper contract, punished - Military News | News From Afghanistan, Iraq And Around The World - Military Times

Maj. gen. tied to improper contract, punished

The vice director of the Joint Staff at the Pentagon — Air Force Maj. Gen. Stephen Goldfein — has been reprimanded after a Defense Department inspector general report implicated him in a contract scandal.

The Jan. 30 IG report, obtained by Air Force Times, says Goldfein, then director of the Air Warfare Center at Nellis Air Force Base, Nev., steered a five-year, $49.9 million contract to Strategic Message Solutions in 2005 to produce multimedia presentations for Thunderbirds air shows.

The 250-page report implicates five Air Force members, but blacks out all the names except Goldfein’s.

Air Force Secretary Michael W. Wynne took administrative action against Goldfein and two others involved and referred the remaining two — the lowest-ranking members involved — to their chains of command for possible action.

Wynne had referred the issue to the IG for investigation, and the IG’s Defense Criminal Investigative Service and later the FBI investigated. The U.S. attorney in Nevada declined to prosecute because of lack of evidence of criminal wrongdoing.

“I am deeply disappointed that our high standards were not adhered to in this case,” Wynne said. “This is not how the Air Force does business and we are taking steps to ensure this doesn’t happen again.”

The IG report also reveals questionable contacts between Chief of Staff Gen. T. Michael Moseley and the partners of Strategic Message Solutions.

The report presents no evidence that Moseley tried to influence the outcome of the contract award, but it does include many friendly e-mails and accounts of meetings and social engagements between him and partners in the company before, during and after the contract competition. The focus on Moseley’s activities raises the questionof whether his social contacts with Edward Shipley, president of the company, and retired Air Combat Command boss Gen. Hal Hornburg, a partner in the company, created an appearance of impropriety.

In an interview with Air Force Times, Moseley said he did not discuss the project with Shipley or Hornburg in e-mails and discussions during the selection process.

“I know where those boundaries are and never crossed any of those ethical or contracting boundary lines,” Moseley said. “There was a definite boundary of not talking about that stuff. ... It was never brought up.”

Process flawed

The report faults the entire process by which the source-selection team at Nellis chose Strategic Message Solutions and singles out Goldfein as the individual most responsible. Goldfein had been friends with Shipley since the 1990s, the report says.

“The investigation found that the ... award to [Strategic Message Solutions] was tainted with improper influence, irregular procurement practices, and preferential treatment,” the report says. “Goldfein’s activities displayed a pattern of behavior that gave an advantage to SMS ... and so constituted preferential treatment. ... In short, we believe that the source selection process may not have selected SMS absent his influence.”

The result, according to the report, was that SMS — despite existing only on paper — was chosen over a competitor that was graded equal or superior in all but one evaluation category and offered to do the work for $24.9 million, half of what SMS bid.

Goldfein, in interviews with investigators, denied any wrongdoing. He said he did not steer the contract to SMS.

He has not responded to requests for comment.

‘Honorary Thunderbird’

Shipley became involved with the Thunderbirds during the late 1990s as a founding member of the Air Force’s Heritage Flight program, a group of pilots who fly vintage fighter aircraft at air shows. Having made millions producing television infomercials, Shipley has his own P-51 Mustang and F-86 Sabre.

He became friends with many in the tight-knit Thunderbirds community, and met Hornburg when he flew the general in his P-51 after an air show at Shaw Air Force Base, S.C., where Hornburg was then commander of the 9th Air Force and U.S. Central Command Air Forces.

In 2003, Shipley volunteered to update the music played at Thunderbirds shows, and produced a mix of rock and pop songs that became the soundtrack for the aerial team’s 2004 season. He was made an “honorary Thunderbird” in 2004.

As Shipley was revamping the music for the 2005 Thunderbirds season, he decided to try incorporating video to fill dead time when the aircraft were not in view of the crowd. He met with Goldfein and others in late 2004 to discuss the idea, and Goldfein approved. Then in January 2005, Shipley, Goldfein and representatives of other multimedia companies met to arrange a demonstration of the production — which Shipley had begun calling Thundervision — at a March Thunderbird show for senior leaders.

Also in early 2005, Moseley — then serving as vice chief of staff under Gen. John Jumper — met with Shipley and Lt. Gen. Stephen Wood, former commander of the Air Warfare Center, at Moseley’s home, where Shipley discussed ideas to promote the Air Force on the History and Discovery television channels.

Jumper was impressed with what he saw at the Thunderbirds show and told Moseley to look into incorporating the production into all the Thunderbirds shows for the 2005 season.

Shipley and Hornburg, who had retired a few months earlier after serving as ACC commander, formed Strategic Message Solutions on March 15 to do the production work. The company had no physical facilities, according to the IG report.

Shipley planned for the production to involve six cameras on the Thunderbirds’ F-16s and six on the ground, with the footage projected on large screens. The music would be synchronized with aircraft maneuvers.

Moseley met with Shipley and Goldfein — who by virtue of commanding the Air Warfare Center also oversaw the Thunderbirds — at the Pentagon on April 13 to discuss the project, and Moseley arranged for $8.5 million to be transferred to ACC from Jumper’s “contingency fund” to pay the bills.

At this point, Moseley said, the ball was in ACC’s court and he stepped back from the process.

“We sent that money over to Air Combat Command ... to begin the process to get this whole thing done right,” he said.

Selection begins

It was not done right.

ACC contracting officials rejected the idea of awarding a non-competitive contract to SMS, andput out a request for proposals on July 22. Nine companies, including SMS, submitted bids. Four proposals were dismissed as untenable, and five were evaluated more thoroughly.

The source-selection team at Nellis comprised seven team members and the source-selection authority, Col. David Glowacki, then chief of the contracting division for ACC’s directorate of installations and mission support. The team included four Thunderbirds personnel and a contracting officer from the 99th Contracting Squadron at Nellis.

Goldfein asked to be involved in the source selection, according to the report, but Glowacki told him he could serve only as an adviser. Lt. Col. Mike Chandler, the Thunderbirds commander, also served as an adviser.

Goldfein and Chandler both signed certificates requiring them to report any real, apparent or potential conflicts of interest to Glowacki.

The investigation report shows that a number of Goldfein’s actions appeared to steer the contract to SMS, and some members of the source-selection team told government investigators they did not think the process was fair.

For example, Goldfein told the contracting officer the winner of the competition should already be familiar with the Thunderbirds, so the officer elevated “strategic insight” to one of the top two criteria — up from its original status as a subcategory, according to the report.

The report says this tipped the scale in SMS’s favor. It is “reasonable to infer that Goldfein knew or should have known that his recommendation provided advantage to [Shipley],” the report states.

Three team members recalled Goldfein saying during a team meeting, “I’m not the [source-selection authority], but if I was the SSA, I’d select SMS,” according to the report.

Goldfein told investigators he does not recall saying that.

In a Nov. 8 meeting during which the final decision was made, the report says, Goldfein argued for team members to select SMS.

“At least one member was uncomfortable with the forcefulness with which Goldfein made the argument since he had a relationship with Shipley,” the report says.

Glowacki told investigators he chose SMS because of Goldfein’s influence and that he was “extremely conscious of ... Goldfein’s presence” during the final selection meeting.

But Goldfein told investigators he did not knowingly steer the selection process and would be “shocked” if he had affected Glowacki’s decision.

There were other irregularities in the process as well.

The contracting officer told investigators SMS did not submit required financial documents to show it was financially capable of executing the project.

SMS’ proposal also touted Hornburg’s involvement, even though he was in a government-mandated, one-year “cooling off” period during which he was not allowed to have contact with Air Force officials for business purposes.

Shipley had better access to Thunderbirds personnel and facilities during the selection process because of his personal relationships, according to the report.

The apparent mischief continued after SMS was awarded the contract Dec. 14. Just two days later, Dec. 16, SMS submitted a $2 million invoice for completion of milestone one “even though no services had been received,” according to the report.

Shipley told Goldfein the money was needed to ensure there would be no delays, the report says. Goldfein then called the contracting officer urging him to expedite payment, even though government contracting rules say payment due dates are 30 days after receipt of an invoice or 30 days after services are received, whichever is later.

Goldfein denied he had the payment expedited.

Shipley also was allowed to use Air Force personnel and facilities to do the work, according to the report, both of which were prohibited by the contract.

One of the losing competitors filed a protest with the Government Accountability Office on Jan. 17, and the Air Force canceled the contract Feb. 16 after problems were discovered.

Investigators interviewed Moseley about his role in the contract Jan. 3, 2008.

The report contains no evidence Moseley had contact with Goldfein or anyone else involved in awarding the contract after ACC decided to hold a competition for the project, but it includes numerous e-mails and accounts of social gatherings during this time among Moseley, Hornburg and Shipley.

Some of those e-mails could be construed as discussing the Thunderbirds project. But Moseley said they addressed other issues.

For example, Moseley sent Hornburg an e-mail July 20: “I’ve engaged with a couple other guys around here to hopefully get a better response to the idea of public media outreach. We’ll see.”

Moseley said the e-mail does not refer to the Thunderbirds project.

On Aug. 10, Moseley e-mailed Shipley: “I’d like to run an idea or two by you to see how you react! I’m still wrestling with brand ideas and how to think through the options.”

Then on Sept. 22, Moseley sent Shipley another e-mail: “Dude ... I’ve talked to lawyers about your idea and I’ve talked to contracting bubbas about getting on with planned good ideas and I’ve got a way huge notion of building a better strategic communication effort. ... I want to chat with you about all this to see what you think.”

Investigators asked Moseley what he meant by this e-mail, and he said he was not referring to the Thunderbirds project.

An Air Force official familiar with the report told Air Force Times the e-mail refers not to the Thunderbirds project, but to Shipley’s idea to use paid advertising in Air Force strategic communications and outreach efforts to offset the costs to the service.

The report also contains an e-mail exchange in which Moseley asks Shipley to give a friend a ride in an aircraft at a Heritage Flight show.

Shipley replied Nov. 19: “Yo Buzz, ... We can make anything happen you’d like ... just let me know when and where and you can consider it done.”

Moseley responded a few days later, saying, “You’ve helped me big time.”

Moseley told Air Force Times that none of his contacts with Hornburg and Shipley was inappropriate, though he could have taken more steps to curtail his contact with them while the Thunderbirds project competition was ongoing.

“In perfect hindsight, then I would tell you ... yeah, I guess I could have been less receptive or less friendly,” he said.

But he also said he should be free to have friendships and discuss ideas with people as long as the proper boundaries are respected.

“My style has always been to be open, to be friendly with people,” Moseley said. “I don’t like living in a bubble. I don’t think that’s the way senior officials should live. I believe you need to be open to ideas, [and] I believe you need to engage.

“I believe there’s a set of boundaries there relative to contracts — I understand that — but there’s also an opportunity there to be open to things that are creative and new and we have to be very cognizant of where those boundaries are and stay within those boundaries.”