On February 13, 2004, GSA published a Request for Proposal for a $3.2 billion Task Order to establish the National Center for Critical Information Processing and Storage (NCCIPS) on behalf of the Naval Oceanographic Office (NAVO) supercomputer center. NCCIPS was designed to use supercomputers to provide disaster recovery, continuity of operations, and data storage services to other federal agencies.
Beginning in the summer of 2003, eight months before the NCCIPS Task Order solicitation was issued, Lockheed Martin Corporation, Science Applications International Corp., and Applied Enterprise Solutions, through its CEO Dale Galloway, obtained advanced contract information, including source selection information, from the NAVO supercomputer center Director and Deputy. This advanced disclosure gave these government contractors an unfair competitive advantage in bidding on the NCCIPS Task Order in violation of the Procurement Integrity Act and its implementing Federal Acquisition Regulations. These corporations also participated in formulating the NCCIPS Task Order requirements in violation of Organizational Conflict of Interest regulations. As a result, these pre-selected government contractors had a head start of several months to establish their teams and honing their NCCIPS bid while their more scrupulous competitors had just 26 days from the issuance of the NCCIPS Task Order. The defendant government contractors were also provided with advance knowledge of the questions that would be posed by the GSA Source Selection Board at the contract oral presentation session while their competitors had no such advance information.
David Magee, a supercomputer specialist at the NAVO supercomputer center, investigated this bid rigging activity and reported it internally to the Navy, the Department of Defense, the General Services Administration, and then to members of Congress beginning in 2004.
He filed this suit in 2006 under the whistleblower provisions of the False Claims Act when it appeared that the government’s investigation was stalled. In 2009, the United States Department of Justice joined in part of David Magee’s lawsuit after conducting its own independent investigation. At the conclusion of extensive discovery of over 1 million pages of documents and approximately 55 depositions taken around the country, the defendants paid over $30 million to avoid an August 2011 trial.