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NRO: No Biz For Conflicted Companies

Less than a month after President Obama signed the Weapons Systems Acquisition Reform Act into law, the National Reconnaissance Office acted with almost blinding speed and issued a memo detailing its adamant stand against the possible appearance of any corporate conflicts of interest.

The memo, which was sent to us after our story appeared on how space manufacturing companies are being forced to sell advisory companies that do business with the intelligence community, lays out very detailed instructions for companies hoping to do business with the maker and operator of the nation's spy satellites.

The memo describes the agency's hammer quite clearly. Any company that does not comply with the conflict of interest requirements: "will also be prohibited from bidding on or participating in any NRO contract to supply the system(s), or any major component thereof, or from serving as a subcontractor, vendor or consultant to the system supplier or major component supplier or major component suppliers on any system related to the work while in a non-conflicted status."

Our initial story contained strong denunciations of the NRO's actions -- and the legislation from which it derived. A "government official" responded to the story and offered this cogent and reasonable defense of the NRO's actions.

"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."

The official also addressed the industrial base issue raised by Loren Thompson in the other story, who argued that the number of companies possessing the unique knowledge of reconnaissance and signals intelligence satellites is so small that the conflict of interest requirements may result in even fewer companies able to help the government as it acquires these highly complex and unique systems. The government official said this base remains "robust and there are companies whose core capability is being a SETA and not a developmental contractor, companies such as Scitor, IAI, SRS Mantech as well as FFRDCs such as SEI, Aerospace & MITRE."

Keith Masback, president of the US Geospatial Intelligence Foundation and a former senior official at the National Geospatial Intelligence Agency, said the NRO's action would probably be "disruptive" in the short term but that the spy agency, which has come under withering attack for incompetence and being too close to its industrial partners in recent years, should be lauded for taking congressional direction seriously and addressing ethical concerns. In the long run, Masback said it would not harm the agency's ability to build and operate satellites and would probably be beneficial in the long run.

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