The Hill

Defense Secretary Robert Gates’s announcement last month that he was suspending the Air Force’s competition for a multi-billion-dollar aerial tanker contract ended a six-month fiasco that brought to light serious issues of economic and national security. When the competition resumes next year, the new president — whether it is Sen. Barack Obama (D-Ill.) or Sen. John McCain (R-Ariz.) — must account for these concerns.

The Pentagon’s initial decision to award this $40 billion contract to Northrop Grumman and the European Aeronautic Defense and Space Company (EADS), the parent company of Airbus, was downright foolish.

It represented the largest foreign acquisition of American defense products in United States history — an unprecedented break from the Buy America policies of the past. And at a time of war, it irresponsibly entrusted a foreign company with the products we need to keep our nation safe. According to a June 2008 report by the Economic Policy Institute (EPI), there are few, if any, other major countries that do not take into account the location of production in military procurement decisions.

Awarding this contract to Airbus posed an even greater threat to our economic security. We have lost over 600,000 jobs already this year. One only needs to look at recent turmoil in the financial markets, the skyrocketing cost of energy, or the home foreclosure crisis to see our economy is in dire straits. Sending high-paying aerospace jobs overseas will dig us into an even deeper hole.

The EPI report also concluded that when compared to the Airbus tanker program, Boeing, an American company, provides lower life-cycle costs and significant fuel savings, and doubles the jobs for American workers. Unfortunately, the Air Force ignored both this and the fact that the U.S. currently has a case against Airbus at the World Trade Organization that alleges it received billions of dollars in illegal subsidies that have long distorted the commercial airplane market. As our economy tries to fight its way out of recession, why would the Pentagon even consider a company under a cloud of potential misconduct?

The decline of our manufacturing base is something my constituents in west-central Illinois know all too well. Nearly 3 million manufacturing jobs have been lost since President Bush took office — including over 180,000 in my home state. The unemployment rate now stands at an alarming 6.1 percent. Yet Sue Payton, the assistant Air Force secretary for acquisition, did not factor in U.S. job creation when awarding Airbus this contract. The next administration must.

Shortly after the Air Force announced it would be awarding this contract to Airbus, Boeing filed a complaint with the Government Accountability Office claiming the competition was unfair.

They were right. GAO found seven major flaws in the selection process, including the fact that the Air Force “conducted misleading and unequal discussions with Boeing.” In addition, the Air Force failed to judge the competitive bids by its own evaluation criteria and inappropriately gave the Airbus tanker extra credit for being larger, even though its size precludes it from landing at many airfields — a basic part of its refueling mission.

The GAO findings raised serious concerns about the merits of Airbus’s bid. But it did not account for the bigger picture — American jobs. Awarding the tanker contract to Boeing would support at least 44,000 new and existing jobs across 40 states. And this is just the beginning. It is estimated that the contract could grow to over $100 billion, and as the EPI report notes, “The experience gained under this contract will give the winner a leg up in future competitions for many more tanker aircraft that will be purchased by the Air Force, by other U.S. services, and by other governments in the future.” With only 9 percent of the American people believing the economy is excellent or good, I believe it is vital to give one of our own companies that chance.

I understand the importance of modernizing these refueling tankers. The Pentagon has tried for nearly a decade to award a replacement contract, and some of the planes are almost 50 years old. I believe the next president must act swiftly but also prudently, considering first and foremost the broad implications of his decision on the American people.

We owe it to the war fighter, American workers and American taxpayers to ensure that not only is the technical acquisition process open and fair, but that we ultimately buy the best possible tanker. I look forward to working with the next administration to see that the new competition — and its outcome — strengthens our economic and national security.

Hare is a member of the House Trade Working Group.