Like a Chinese firecracker, Air Force snafus just keep on exploding. Four years ago, an Air Force scheme to lease 100 Boeing 767 aircraft to use as aerial refueling tankers collapsed amid a scandal that sent top Air Force and Boeing officials to jail. So, last February, the service dutifully repeated the bidding process for a new generation of tankers, and awarded a $35 billion contract to a team led by Northrop Grumman and the European Aeronautic Defence and Space Co. (EADS). That decision outraged Boeing and its backers on Capitol Hill, and following an investigation, the Government Accountability Office on Wednesday ruled that February's contract award was flawed, and that bidding should be reopened. The latest embarrassment for the Air Force comes less than two weeks after Defense Secretary Robert Gates fired the service's top two officials for neglecting to adequately secure its nuclear stockpile.
The GAO, which is where losing competitors must seek redress before filing a court suit, said 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." Its statement said the Air Force had held "misleading and unequal discussions" with Boeing, and also had erred in calculating the operating cost of the proposed Boeing tanker and the development costs associated with its Northrop-Airbus competitor.
The GAO stressed it assessed only the bidding process, and not the actual merits of the competing planes. Boeing claims that its entry, the KC-767, is smaller than its competitor and can fly to more airfields around the world. The Northrop model, based on the Airbus 330 and called the KC-30, would carry more fuel and cargo. The Air Force has said it plans to call the new plane the KC-45. The service had no immediate reaction to the GAO ruling, which is not binding but will generate intense pressure on the Pentagon to at least reconsider the contract for 179 airplanes, to be followed by two more contracts expected to total about $100 billion over the next 30 years.
The decision is also likely to inflame trade tensions between the U.S. and European allies. Both planes — like so-called "American-built" cars — would contain a substantial percentage of foreign parts. (The Northrop team had already announced a ground-breaking for its U.S. assembly plant in Mobile, Ala., for June 28.) Boeing officials had warned that it might abandon the aerial tanker market if it doesn't prevail on this contract. But trade and military experts agree that making Boeing — the lone large airframe manufacturer left in the U.S. — a monopoly supplier of tankers to the U.S. military, is a sure way to end up with lousy airplanes.
The Air Force is reviewing the decision, but Pentagon spokesman Geoff Morrell made clear on Tuesday that the Defense Department felt the award to Northrop remained the best deal for taxpayers and for the nation's military. "The average age of this fleet is 47 years old. These planes desperately need to be replaced not yesterday, not the year before but 10 years ago," Morrell said. The award was "fair and transparent," he added. The "buy American" wailing from Congress over the fact that the winning bid is from a European-led consortium is moot, given that procurement law doesn't let the Air Force weigh that as a factor in its decision, Morrell argued. Changing the law to tilt such awards to U.S. companies runs "the risk of opening the door to retaliatory trade restrictions that would ultimately have a far greater impact on domestic jobs than perhaps this one contract will," he said.
Nonetheless, most of the reaction from Capitol Hill following the GAO's announcement reflected concerns over jobs. "The Air Force's tanker competition was designed to select the finest aircraft available for our men and women in uniform," Senator Jeff Sessions, R-Ala., said shortly after the GAO handed down its decision. "I firmly believe that the Northrop Grumman-EADS proposal is the superior aircraft" (and not only because final assembly would happen in Alabama). Others, representing states where the Boeing craft would be built, hailed the GAO verdict. "This review by the GAO vindicates my initial concerns over the awarding of the air refueling tanker contract," said Senator Christopher Dodd, D-Conn. "This entire process provides yet another example of this Administration's refusal to adhere to the law and their own evaluation criteria, to say nothing of their continued failure to support critical defense manufacturing here at home" — like those at Pratt & Whitney in East Hartford, where the Boeing planes' engines would be built. (The engines for the Airbus would be built by General Electric in North Carolina and Ohio.)
The debate over which plane to buy has taken some turns worthy of Tom Clancy. At an April hearing of the House Armed Services Committee, Rep. Gene Taylor, D-Miss., suggested the award to the Northrop-EADS team opens the U.S. military to "a very real vulnerability." A veteran member of the panel, Taylor suggested that the Air Force might one day discover that the new European-developed tanker can't refuel its new F-22 fighter because "we discover there's something on the tankers jamming the fuel pumps on the F-22 — some sort of signal."
The coup de grace (that's French): "How do we keep EADS or someone like EADS" — opponents of the deal usually refer to the foreign half of the Northrop consortium when discussing it — "from not going to potential enemies of the United States and saying, 'You know, for X number of dollars, I'll expose you to a vulnerability,' " Taylor said. The trouble with such innuendo, is that the last military aircraft known to be sabotaged is the CH-47 helicopter. One plant worker was arrested in connection with the case last month, but a second act of sabotage on the same production line remains unsolved and under investigation. The CH-47 is built just outside Philadelphia — by Boeing.