Aerospace Companies Forced to Sell Subsidiaries To Comply With New Acquisition Law?

Colin Clark reports in DODBuzz that some aerospace companies are being forced to sell subsidiaries in order to comply with the recently enacted Weapons Systems Acquisition Reform Act. Clark quotes sources as saying that Northrop Grumman’s pending sale of its TASC unit is a case in point. Some of those sources are highly critical of the strict interpretation of the law by the National Reconnaissance Office (NRO), which designs, builds and operates the nation’s reconnaissance satellites. A follow-up story by Clark includes a link to the NRO memo and a response from a “government official” to the original story.

The original story included this criticism of NRO’s interpretation of the law.

“Intelligence community sources say the National Reconnaissance Office, builder and operator of the nation’s spy satellites, is interpreting the bill’s language very strictly. ‘The NRO is nuts!’ said one irate expert. They are being more draconian than anyone else and it is hard to understand why. While there are certainly instances where the same company should not be involved in helping with the requirements during a competitive acquisition they are going beyond this. In fact companies with 40 years worth of experience in a particular specialty are being thrown over the side in search of purity. This is not in the government’s best interest from either performance or cost perspectives. This is all part of the NRO destroying itself and paying attention to process.'”

The follow-up story included this response from an unnamed government official:

“‘I don’t care how many firewalls’ a company puts up to mitigate OCI, the fact remains TASC provides advice on the cost, schedule & performance of developmental contractors such as Northrop Grumman. It is particularly disconcerting when going through a source selection and we need the advice of a particular subject matter expert but we can’t turn to him because the company he works for is owned by one of the potential bidders,’ the official said. ‘This is a good thing and not a bad thing. The sky is not falling as a result and the other companies mentioned above will absorb contracts and employees as a result. There will be no perception of conflict and I don’t have to kick my subject matter experts out of the room during a crucial time in a review.'”