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U.S. OFFICE OF SPECIAL COUNSEL 1730 M Street, N.W., Suite 300 Washington, o.c. 20036-4505

The Special Counsel

The Honorable Robert Speer Acting Secretary Department of the Army 1700 Army Pentagon Washington, D.C. 20310-1700

Re: OSC File No. DI-15-5616

Dear Mr. Speer:

February 7, 2017

Pursuant to my responsibilities as Special Counsel, I am referring to you for investigation a whistleblower disclosure alleging that officials at the Department of the Army (Anny) may have engaged in actions that constitute a violation oflaw, rule, or regulation; gross mismanagement; and a gross waste of funds. A report of your investigation is due to the Office of Special Counsel on April 10, 2017.

The whistleblower, whose identity shall remain confidential, disclosed that Army employees have failed to employ available state-of-the-art technology resulting in significant costs to the agency. The allegations to be investigated are as follows:

• Army leadership has failed to direct aircraft program managers to use test processes offered by the Anny Oil Analysis Program (AOAP) despite Army policies requiring participation in AOAP processes; and

• The failure to employ AOAP resources has resulted in the gross waste of approximately $95 million annually and has prevented AOAP from fully meeting its mission objectives.

The whistleblower explained that AOAP, a component of the Army Logistics Support Activity (LOGSA), functions as the Army's sole oil analysis program. AOAP operates 18 laboratories around the world and is a Reliability Centered Maintenance and Condition Base Maintenance Program. As noted in Army Technical Bulletin TB 43-0211, AOAP's objective is to "detect impending equipment component failures and determine lubricant condition through on-line and laboratory evaluation of oil samples." The use of these techniques can improve flight safety and equipment readiness while conserving resources. The Program Manager (PM) Charter for AOAP charges the AOAP PM with meeting the stated objectives by "ensuring that the Warfighter is supported with the most technologically advanced diagnostic tools to monitor lubricants for the presence of contaminants, abrasive part wear, and review of prescribed physical properties for

The Special Counsel

The Honorable Robert Speer February 7, 2017 Page 2 of 4

determining the condition of lubricants to enable detection of impending failures before catastrophic failures occur."

The whistle blower explained that tiny fragments, or chips, of metal alloy from aircraft engines can flake off into engine oil, potentially causing engine failure. Chips are identified as either allowable or non-allowable alloys. The aircraft engines have built-in detectors that identify the presence of the chips and trigger a warning light in the cockpit. When the light is triggered, the aircraft is grounded to allow for analysis of the chips. Initially, the engine oil filter is removed and a visual inspection is completed. If the chips are noticeably large or appear to be shiny, they are generally found to be non:-allowable. According to the whistleblower, if a chip is determined to be non-allowable, the engine must be removed from the aircraft and taken completely apart by contractors in Corpus Christi, Texas. If"no evidence of failure" is detected, the engine can be rebuilt and reinstalled. However, the whistleblower noted that this process takes approximately two years from start to finish, during which time replacement engines must be purchased to keep the aircraft in operation.

The whistleblower disclosed that in August 2014, AOAP was asked to participate in the Army's Aviation and Missile Research, Development, and Engineering Center (AMRDEC) Root Cause Working Group. One of AOAP's responsibilities was to determine root causes and propose corrective actions to address "no evidence of failure" issues identified in T700 aircraft engines.1 AOAP found that the T-70 lD engine represented $278,188,070 in Army Working Capital Fund purchases between March 2012 and 2013, with $95 million of that amount wasted each year due to preventable false positive chip identification.

The whistleblower stated that AOAP offered to solve the issue of false chip findings by em,plpying its Filter Debris Analysis (FDA) capability to determine if the chips are allowable. The whistleblower explained that FDA employs energy dispersive X-ray fluorescence to analyze the chips instead of the oil, and that AOAP is the only organization in the Army with FDA capability. The FDA process, in conjunction with chip analysis, which uses laser-induced breakdown spectroscopy, can precisely and objectively determine whether chips are allowable or non-allowable without necessitating the removal and breakdown of the engines. This would simultaneously speed up the chip analysis while alleviating the need to purchase replacement engines at a high cost.

The whistleblower noted that FDA, when combined with chip analysis, is highly accurate and objective. The two tests successfully identified allowable and non-allowable chips in several demonstration projects at Redstone Arsenal, where the PM of the Apache aircraft, AOAP, and the Aircraft Engineering Directorate are located. While AOAP does not own the chip analyzer, it has attempted to purchase the system for approximately $120,000 via requests to both the Army G4 (Logistics) and the Army Working Capital Fund (AWCF). However, the request to Army G4 has not received approval, and, while AWCF

1 The whistleblower explained that T7O0 engines are installed in pairs in the Army's Apache and Blackhawk helicopters, and each engine costs approximately $683,229.

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The Honorable Robert Speer February 7, 2017 Page 3 of 4

administrators believe the purchase and underlying project have merit, T700 PM leadership has refused to approve the requisite funding.

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_. In order to take advantage of AOAP's capabilities, stakeholder organizations - any organization that has equipment containing a chip detector - can send their samples to AOAP to be tested at no cost. Army Regulation 750-1, Army Materiel Maintenance Policy, which is mandatory, lays out the policies and responsibilities of commands participating in the AOAP. Notably, Sections 2-l 7~a.(23) and (24) direct Major Army Commanders to ensure that subordinate commands participate in the AOAP program and that all organizations owning equipment enrolled in AOAP appoint an AOAP monitor to implement AOAP procedures within the command. Despite this requirement, as well as the objective reliability of the FDA process and the substantial cost savings that could be realized by its use, the whistleblower disclosed that the PMs for the Apache and Blackhawk aircraft have refused to use AOAP's capabilities.

According to the whistleblower, the PM's refusal was based on a desire to continue sending samples to contractors for analysis. The whistleblower alleged, however, that neither AOAP nor the contractor are using the available advanced analysis techniques, and that because AOAP can conduct the more sophisticated tests at no cost, the use of a contractor constitutes an unnecessary expenditure. According to the whistleblower, the PMs have repeatedly stated that the subjective visual analysis that is in place is sufficient, despite evidence to the contrary.

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The Office of Special Counsel (OSC) is. authorized by law to receive disclosures of information from federal employees alleging violations oflaw, rule, or regulation, gross mismanijgernep.t, a gross waste of funds, an abuse of authority, or a substantial and spe~ific danger to public health or safety. 5 U.S.C. § 1213(a) and (b). Ifl find, on the basis of the information disclosed, that there is a substantial likelihood that one of these conditions exists, I am required to advise the appropriate agency head of my findings, and the agency head is required to conduct an investigation of the allegations and prepare a report within 60 days of notification of the allegations. 5 U.S.C. § 1213(c) and (g). OSC will not routinely grant an extension of time to an agency in conducting a whistle blower disclosure investigation. However, OSC will consider extension requests in 60-day increments where an agency concretely evidences that it is conducting a good faith investigation that will require more time to successfully complete.

Upon receipt, I review the agency report to determine whether it contains all of the information required by statute and that the findings of the head of the agency appear to be reasonable. 5 U.S.C. § 1213(e)(2). I will determine that the agency's investigative findings and conclusions ~ppear reasonable if they are credible, consistent, and complete based upon the facts in the disclosure, the agency report, and the comments offered by the whistleblower under 5 U.S'.C. § 1213(e)(l).

The Special Counsel

The Honorable Robert Speer February 7, 2017 Page 4 of 4·

I have concluded that there is a substantial likelihood that the information the whistleblower provided to OSC discloses a violation oflaw, rule, or regulation; gross mismanagement; and a gross waste of funds. As previously stated, I am referring this information to you for an investigation of the whistleblower' s allegations and a report of your findings due to this office on April 10, 2017. By law, this report should be reviewed and signed by you personally. Nevertheless, should you delegate your authority to review and sign the report to the Inspector General, or other agency official, the delegation must be specifically stated and must include the authority to take the actions necessary under 5 U.S.C. § 1213(d)(5). The requirements of the report are set forth at 5 U.S.C. § 1213.

If your investigative team has questions regarding the statutorily mandated report you will deliver to OSC under 5 U.S.C. § 1213, OSC attorneys are available to discuss OSC's statutory process, expectations for credible, consistent, and complete reports, and for general assistance. Please contact Catherine A. McMullen, Chief, Disclosure Unit, at (202) 254-3604 to initiate this process.

As required by 5 U.S.C. § 1213(e)(3), I will send copies of the report, along with any comments on the report from the whistleblower and any comments or recommendations from me, to the President and the appropriate oversight committees in the Senate and House of Representatives. Unless the report is classified or prohibited from release by law or by Executive Order requiring that information be kept secret in the interest of national defense or the conduct of foreign affairs, OSC will place a copy of the report in a public file in accordance with 5 U.S.C. § 1219(a). To prevent public disclosure of personally identifiable information (Pil), ·OSC requests that you ensure that the report does not contain any sensitive PII, such as Social Security numbers, home addresses and phone numbers, personal e-mail addresses, dates and places of birth, and personal financial information. OSC does not consider names and titles to be sensitive PII requiring redaction. Agencies are requested not to redact such information in reports provided to OSC for the public file.

Please refer to our file number in any correspondence on this matter. If you need further information, please contact Ms. McMullen. I am also available for any questions you may have.

e:~ Carolyn N. Lerner

Enclosure

cc: Lt. Gen. David E. Quantock, Inspector General

Enclosure

Requirements of 5 U.S.C. § 1213(d)

Any report required under subsection (c) shall be reviewed and signed by the head of the agency1 and shall include:

( 1) a summary of the information with respect to which the investigation was initiated;

(2) a description of the conduct of the investigation;

(3) a summary of any evidence obtained from the investigation;

(4) a listing of any violation or apparent violation of law, rule, or regulation; and

(5) a description of any action taken or planned as a result of the investigation, such as:

(A) changes in agency rules, regulations or practices;

(B) the restoration of any aggrieved employee;

(C) disciplinary action against any employee; and

(D) referral to th~ Attorney General of any evidence of criminal violation.

In addition, we are interested in learning of any dollar savings, or projected savings, and any management initiatives that may result from this review.

To prevent public disclosure of personally identifiable information (PU), OSC requests that you ensure that the report does not contain any sensitive PH, such as Social Security numbers, home addresses and phone numbers, personal e-mail addresses, dates and places of birth, and personal financial information. With the exception of patient names, OSC does not consider names and titles to be sensitive PU requiring redaction. Agencies are requested not to redact such information in reports provided to OSC for inclusion in the public file.

1 Should you decide to delegate authority to another official to review and sign the report, your delegation must be specifically stated.

'GUIDANCE FOR SUBMISSION OF AGENCY REPORT

TO OFFICE OF SPECIAL COUNSEL (OSC) PURSUANT TO 5 USC§ 1213(c}

The Special Counsel has determined that there is a substantial likelihood that

information received by OSC discloses a violation of law, rule, or regulation; gross

mismanagement; a gross waste of funds; an abuse of authority; and/or a substantial and

specific danger to public health or safety, and has referred the matter to the agency head. 5

USC § 1213(c). The agency head is required to conduct an investigation with respect to the

information and any related matters transmitted by the Special Counsel, and submit a written report setting forth the findings of the agency head. 5 USC§ 1213(c)(l)(A) and (B). By law, the

report shall be reviewed and signed by the agency head (or their delegate) and shall include the

information set out in 5 USC§ 1213(d). The checklist below is intended to assist the agency in

completing the report and to ensure against statutory deficiencies.

1. Did the agency submit the report within 60 days? 5 USC§ 1213(c)(l)(B)

a) If not, did the agency receive a written extension of time? (Extensions of

time, no longer than 60 days per request, will be considered where an

agency concretely evidences that it is conducting a good faith investigation

that will require more time to successfully complete. Specific reasons for the

extension of time must be included.)

2. Did the agency head (or their delegate) review and sign the report? 5 USC§ 1213(d)

3. Did the agency report include a summary of the information with respect to which the

investigation was initiated? 5 USC § 1213(d)(1)

a) Did the report set forth a/legations submitted by the Special Counsel for

investigation 7

b) Did the report summarize the material evidence relating to each of the

allegations?

c) Did the report set forth any related matters transmitted by the Special

Counsel?

d} Did the report summarize the material evidence relating to the related

matters?

4. Did the agency report include a description of the conduct of the investigation? 5 USC

§ 1213 (d)(2)

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a) Was the whistleblower interviewed at the outset of the investigation?

b) Did the report identify the personnel who investigated the whistleblower's

charges?

c) Did the report disclose whether or not witnesses were offered confidentiality

for their responses?

d) Did the report list witnesses interviewed, including the subjects of the

investigation and witnesses suggested by the whistleblower?

e) Did the report reference those witnesses who requested and were granted

anonymity?

f) Did the report disclose the methodology and scope of the investigation?

g) Did the report state whether notice was provided for on-site investigations?

h) Did the report reveal the areas of inquiry covered with each witness?

i) Did the agency rely on any other investigative report as a substitute for

investigation in direct response to the referral under 5 USC§ 1213(c)? If so,

did the agency answer Question 4, (a) through (h) above in that report?

5. Did the report include a summary of any evidence obtained from the investigation?

5 USC§ 1213(d)(3)

a) Did the report summarize all relevant and material evidence that the agency

considered in making its conclusions on each of the allegations?

~- Did the agency report include a listing of any violation or apparent violatio·n of any law,

rule, or regulation? 5 USC§ 1213(d)(4}

a} Did the report cite any law, rule, or regulation relevant to the

whistleblower's allegations, whether or not the report concludes that the

disclosure and evidence substantiates a violation?

b) Did the report state whether or not the investigation revealed a violation of

law, rule, or regulation?

c) When conflicting evidence could lead to differing conclusions about a

· possible violation, did the report disclose which evidence was more credible

and explain why?

d) Did the report offer the full factual and legal basis for the conclusions on

each element of each allegation?

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7. Did the agency report include a description of any action taken or planned as a result of

the investigation, such as:

a) changes in agency rules, regulations, or practices;

b) the restoration of any aggrieved employee;

c) disciplinary action against any employee; and

d) referral to the Attorney General of any evidence of a criminal violation?

5 USC §1213(d)(S)(A)- (D)

Please note that upon receipt of the report, the Special Counsel shall review the report and

determine whether the findings of the head of the agency appear reasonable, and whether the

report of the agency contains the information required under 5 USC§ 1213(d) as set forth

above.

8. Where applicable, did the report include any dollar savings, or projected savings, and

any management initiatives that may result from this review?

9. Does the agency report include any personally identifiable information (PII), such as

social security numbers, home addresses and telephone numbers, personal epmail

addresses, dates and places of birth, personal financial information, and patient names?

{In order to prevent public disclosure of PII, OSC requests that you ensure that the

report does not include this type of information.)

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