Boeing calls Air Force contract selection 'seriously flawed' - East Valley Tribune: Business

Boeing calls Air Force contract selection 'seriously flawed'

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Posted: Wednesday, March 12, 2008 1:07 am | Updated: 9:51 pm, Fri Oct 7, 2011.

WASHINGTON - As Boeing Co. formally protested a $35 billion Air Force contract on Tuesday, the winning bidder upped its projections of how many jobs the deal would create.

And on Capitol Hill, Air Force officials had yet to placate lawmakers from Washington, Kansas, Connecticut and other states that would have gained jobs had Boeing won. At least two - Rep. Todd Tiahrt, R-Kan., and Rep. Norm Dicks, D-Wash. - are considering legislation to overhaul the procurement process or even block funding for the tanker deal.

Tuesday brought new twists to the tanker battle, which is now in the hands of the Government Accountability Office after Boeing formally protested the contract given to European Aeronautic Defence and Space Co. and Northrop Grumman Corp. of Los Angeles. EADS is the parent of Boeing rival Airbus.

The GAO has 100 days to issue a ruling. Boeing said the "seriously flawed" selection process was "replete with irregularities" and resulted in the "wrong airplane for the warfighter."

Northrop changed its job-creation projections and said it expects the tanker contract to support four new factories and 48,000 direct and indirect new jobs in 49 states, including more than 1,500 new jobs in Mobile, Ala., where the tanker would be assembled.That's a sharp increase from its previous projection of 25,000 jobs at suppliers nationwide.

The contract to replace 179 air-to-air refueling tankers is the first of three Air Force deals worth as much $100 billion to replace the entire fleet of nearly 600 tankers over the next 30 years.

A spokesman for Northrop Grumman said the company remains confident that the Air Force conducted "the most rigorous, fair and transparent acquisition in Defense Department history," and that it won the competition by a wide margin. In a statement late Tuesday, the Air Force defended its decision as one that gives "the best value to the American taxpayer and to the warfighter."

The Air Force also said it worked closely with the bidders, giving continuous feedback on both proposals to "provide transparency, maintain integrity, and promote fair competition."

Boeing has supplied aerial refueling tankers to the Air Force for nearly 50 years, experience the company said the Air Force ignored. Air Force officials have said that the larger size of the plane offered by EADS and Northrop Grumman helped tip the balance in their favor.

But in its protest with the GAO, Boeing argued that the Air Force lost sight of the original mission for the tanker fleet - letting planes refuel without landing - by choosing a larger tanker that could carry more passengers and cargo.

"If they wanted a larger tanker, it would have been nice to be very clear that that was a requirement," Boeing Vice President Beverly Wyse said on Tuesday.  Wyse oversees production of Boeing's 767 commercial aircraft, which would have been converted into the tanker had Boeing won.

Boeing also claimed that the Air Force changed its requirements to accommodate the bigger tanker offered by EADS and Northrop Grumman.

For instance, the Air Force tweaked its estimates on tarmac sizes and allowed the EADS/Northrop Grumman team to propose parking its tankers closer together to fit more planes at operating bases, said Mark McGraw, a Boeing vice president.

Boeing also argued that its tankers would cost the Air Force less to maintain, and it insisted that the Air Force distorted its pricing data by treating its tanker as a military defense product instead of a commercial aircraft even though its tanker would be based on the company's 767.

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