Did the Army favor Raytheon in anti-RPG bid?

Lisa Myers Senior investigative correspondent • Profile

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.

The testing
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.

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