WSJ: Former Top NASA Official Under Criminal Investigation in Lunar Lander Procurement Case

Douglas Loverro (Credit: NASA)

by Douglas Messier
Managing Editor

The Wall Street Journal reports that the U.S. Justice Department has opened a criminal investigation into whether a former senior NASA official broke federal procurement law by updating a Boeing official on the status of the company’s bid to develop a human lunar lander.

The grand jury investigation involves communication between NASA’s former head of human spaceflight, Doug Loverro, and Boeing Senior Vice President Jim Chilton.

Loverro, who abruptly resigned from NASA in May, is alleged to have improperly told Chilton that Boeing was about to be eliminated from a competition for human landing system development contracts because the company’s bid was deficient

The contact allegedly came in the midst of a blackout period that limits contact between NASA and bidders to preserve the integrity of the contact award process and protect it from improper outside influence.

Boeing submitted a revised bid after Chilton’s warning, the story said. But, the new submission was deemed to be too late, and Boeing was eliminated from the competition.

In April, NASA awarded development contracts totaling $967 million to Blue Origin, Dynetics and SpaceX. The space agency plans to award at least one contract worth billions of dollars for a vehicle to land two astronauts at the south pole of the moon by 2024.

The Wall Street Journal reports:

Mr. Loverro has told investigators he was trying to help the lunar-lander program and taxpayers rather than pursuing anything ill-intended, according to some of the people familiar with the investigation, by reducing the likelihood that the bidding process would be slowed down by potential challenges or appeals to the outcome.

Mr. Loverro’s communications with Boeing, and the company’s actions following those communications, prompted complaints within parts of NASA, the people familiar with the inquiry said. The complaints sparked a previously reported probe by the agency’s inspector general into whether Boeing gained unusual insight or any advantage in the competition. Weeks after the awards were announced, Mr. Loverro stepped down as an associate administrator under pressure from NASA’s leadership.

In a farewell message to staff sent on May 19, Mr. Loverro suggested he had overstepped his authority or otherwise might have run afoul of contracting rules. He wrote that “risk-taking is part of the job description” of someone in his role. Without elaborating, the message said, “I took such a risk earlier in the year because I judged it necessary to fulfill our mission.”

The story contained several other interesting details:

  • prosecutors are examining Loverro’s contact with another unidentified bidder;
  • an investigation by the NASA Office of Inspector General is on hold pending the outcome of the criminal probe;
  • several mid-level Boeing officials were pushed out of the company as a result of the incident; and,
  • Boeing has taken steps to improve regulatory compliance training.