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Friday, August 1, 2008

Editor’s Note: Tanker Tribulations

Bill Carey

Before June 18, I was fond of saying that one of the main beneficiaries of the contested KC-X tanker contract was The Washington Post. After Boeing filed a protest with the Government Accountability Office (GAO) over the $35 billion-plus contract award to Northrop Grumman and EADS, the newspaper served as a sounding board for hire, publishing multiple, full-page ads from both sides.

"The Tanker Decision. Billions More For Less Capability. It Doesn’t Add Up," stated a representative ad from Boeing, which mounted an aggressive campaign to overturn the U.S. Air Force decision. Northrop Grumman countered with an appeal to industrial offsets. Though the proffered KC-45 is based on the Airbus A330, "America’s New Tanker" will bring an assembly plant to Mobile, Ala., engage 230 American companies and sustain 48,000 jobs.

Not just print media was used. While scraping the Barbasol from my face one morning, I was reminded via WTOP radio of the "clear and fair" selection of the Northrop team. Both sides maintained tanker Web pages. Politicians went to bat for their respective constituencies. One of the more persistent was Sen. Patty Murray, D-Wash., whose office peppered my inbox with denunciations of the Air Force’s "fundamentally flawed" decision to "outsource" the contract.

All very interesting. But after the corrupted plan to lease tankers from Boeing in 2003 resulted in jail terms for some of the negotiators, I figured the Air Force would get it right this time on this — it’s top acquisition priority. Boeing, at the short end of the stick on recent DoD contract awards, including AMF JTRS and the Navy’s BAMS program, was mounting a pro forma, albeit expensive, challenge. Or perhaps it was push-back from Boeing’s own, short-lived selection in 2006 to provide the $10 billion CSAR-X helicopter, the Air Force’s second-highest acquisition priority. Lockheed Martin and Sikorsky begged to differ, and GAO found in their favor, leading the Air Force to re-bid the contract.

But GAO more often denies protests. In March, the agency rejected one by General Atomics Aeronautical Systems, whose Synthetic Aperture Radar/Ground Moving Target Indicator failed to make the cut with the Army Communications-Electronics Command. That left one other offeror — Northrop Grumman.

The Air Force’s leap-day choice of the KC-45 as the aerial refueling tanker of the future over Boeing’s KC-767 reportedly surprised even Northrop Grumman and EADS. So you gotta believe the Air Force fine-combed this procurement to make such an unconventional pick. Despite the grousing and threats from Congress, it seemed this contract award would stand, at least on the merits of the selection process.

But Boeing didn’t waste its advertising dollars. On June 18, as the reader no doubt knows, GAO sustained the company’s protest and recommended the Air Force re-bid the tanker contract. "Our review of the record led us to conclude that the Air Force had made a number of significant errors that could have affected the outcome of what was a close competition between Boeing and Northrop Grumman," stated Michael R. Golden, GAO managing associate general counsel for procurement law. Another bad day for an Air Force that two weeks earlier had seen its chief of staff and civilian secretary sacked over lax oversight of the nation’s nuclear arsenal.

Murray’s office seemed to know GAO’s verdict before anyone else. "Today, the GAO sustained Boeing’s protest and confirmed what I have been saying for months — the Air Force’s tanker decision was fundamentally flawed," the senator proclaimed. Back home in Seattle, District Lodge 751 of the International Association of Machinists and Aerospace Workers rejoiced. "Our workers have been building Air Force tankers for 67 years. It was just inconceivable that the Air Force could pick Airbus, when they don’t have a factory in this country, or any workers," stated Tom Wroblewski, District Lodge 751 president. "...Our 767 workers can get started on the tankers right here, right now."

Far be it from this correspondent to judge the merits of the KC-767 versus the KC-45, the fidelity of the evaluation process to the contract specifications, or the ultimate fairness of the contract award. But may I venture that this is about more than two airplanes — it’s about preserving one industrial base or building another, and all that entails.

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