For Immediate Release:

Thursday, June 26, 2008

 - Floor speech

(WASHINGTON, D.C.) – In a speech on the Senate floor today, U.S. Senator Patty Murray (D-WA) reacted to Wednesday’s Government Accountability Office decision, which found that the Air Force’s competition to supply the next generation of refueling tankers was skewed in favor of the European company Airbus at the expense of Boeing.  Murray said the Air Force must follow the GAO’s recommendation, start over with the original request for proposal, and rebid the contract.

In a blistering ruling, responding to Boeing’s protest of the award, the GAO found that the Air Force significantly overestimated the cost of Boeing’s tanker, misled Boeing, and that the Air Force selected Airbus even though the company failed to meet key requirements of the contract. 

“I have already asked for a meeting with Defense Secretary Gates so he can tell me how the Pentagon plans to respond.  And I will make it clear the Air Force cannot go forward with this contract – and that I expect it to follow the GAO’s recommendations,” Senator Murray said in her speech.  “These are serious findings – no matter how you look at it, this competition was anything but transparent.  And even though the Air Force declared its contest was fair, it appears that it had a thumb on the scales for Airbus all along.”

“But the last findings could be the most damaging of all of them,” Murray added, referring to the finding that Airbus didn’t even meet terms of the contract.  “If Airbus can’t actually prove that its tanker can do the job – or that it will fulfill its obligations – how can it possibly be awarded this contract?”

The following is Senator Murray’s speech as prepared for delivery:

Mr. President, four months ago, when the Air Force announced that Airbus – and not Boeing – would supply the next generation of aerial refueling tankers, Air Force acquisition officials declared that the contest had been fair, open, and transparent.  They said they had made no mistakes.  And they boasted that the decision could withstand any level of scrutiny.

Well, Mr. President, yesterday, the Government Accountability Office called all of that into question in a 67-page decision that shows that the Air Force competition was unfairly skewed toward Airbus from the beginning.  The decision – responding to Boeing’s protest of the Air Force’s competition – was damning.  It described the contest as “unreasonable,” “improper,” and “misleading.”  It found that the Air Force significantly overestimated the cost of Boeing’s tanker, that it misled Boeing – while helping Airbus, and that the Air Force selected Airbus even though the company failed to meet key requirements of the contract.  And it concluded that, “But for these errors, we believe that Boeing would have had a substantial chance of being selected for award.”

Mr. President, it is unclear at this point whether those errors were due to incompetence or impropriety.  But one thing is definite – this contest was anything but fair and transparent.  I want to know how the Air Force got this so wrong.  I have already asked for a meeting with Defense Secretary Gates so he can tell me how the Pentagon plans to respond.  And I will make it clear the Air Force cannot go forward with this contract – and that I expect it to follow the GAO’s recommendations.  

The Air Force must return to the original request for proposal, rebid the contract, and get this right.

GAO’s Findings

Mr. President, the difference between what the Air Force said about the acquisition process and the GAO’s findings are startling. 

On February 29th, Sue Payton, the Air Force’s Assistant Secretary for Acquisition, said at a DoD news briefing that: “We have been extremely open and transparent.  We have had a very thorough review of what we’re doing.  We’ve got it nailed.”  A week later, she told the House Appropriations Subcommittee on Defense that:  “The Air Force followed a carefully structured source selection process, designed to provide transparency, maintain integrity, and ensure a fair competition.”  And throughout the last four months, Air Force officials have insisted that they selected the cheapest plane that best met their criteria – and that they made no mistakes.

Well, the GAO’s decision paints a very different picture of the contest.  And, as I said, it raises serious questions about how the Air Force conducted this competition.  The GAO found that the Air Force made a number of errors that unfairly helped Airbus and hurt Boeing:

• It found that the Air Force changed direction midstream about which criteria were more important. 

  • It didn’t give Boeing credit for providing a more capable plane according to the Air Force’s description of what it wanted. 

  • Yet it gave Airbus extra credit for offering amenities it didn’t ask for.

• It found that the Air Force “treated the firms unequally” – by helping Airbus at Boeing’s expense.

  • The GAO found that the Air Force misled Boeing about whether it had fully met the requirements in the RFP – all the while keeping up conversations with Airbus, and giving it the correct information.

•  It said the Air Force deliberately – and unreasonably – increased Boeing’s estimated costs.  When the mistake was corrected, it was discovered that the Airbus A330 actually costs tens of millions of dollars more than Boeing’s 767.

•  And it said that the Air Force accepted Airbus’s proposal – even though Airbus couldn’t meet two key contract requirements.

  • First, Airbus refused to commit to providing long-term maintenance as specified in the RFP – even after the Air Force asked for it repeatedly. 

  • And second, the Air Force couldn’t prove that Airbus could refuel all of the military’s aircraft according to procedure. 

Let me say that again – the Air Force selected Airbus’s A330 even though Airbus refused to agree to a key term in the contract – and even though the Air Force failed to show that the A330 was even capable of refueling our military’s aircraft by the books.

Mr. President, these are serious findings.  No matter how you look at it, this competition was anything but transparent.  And even though the Air Force declared its contest was fair, it appears that it had a thumb on the scales for Airbus all along.  But the last findings could be the most damaging of all of them.  If Airbus can’t actually prove that its tanker can do the job – or that it will fulfill its obligations – how can it possibly be awarded this contract?

This Contract Must be Rebid

Now, the Air Force is contemplating what to do next.  And – as I have said – I think the answer is clear:  This contract should be rebid.  I agree with those who have said that we need to get these planes into the hands of our airmen and women as fast as possible.  I represent Fairchild Air Force Base – those airmen and women fly refueling tankers.  I know how important this decision is to them.

But Mr. President, this wasn’t an acceptable acquisition process – and it would be unconscionable to go forward with the selection without first addressing questions raised by the GAO’s decision.  In order to do that, we must have a competition that isn’t overshadowed by questions of ethics or competence.  And we have to get the right plane.  Our tankers refuel planes and aircraft from every single branch of our military.   They are the backbone of our global military strength.

We need a competition where the criteria are clear, where the participants can earn credit that is spelled out in the contract, and where no extra credit is awarded unfairly.  And we need a fair evaluation of all the costs.  We must go back and start with a clean slate – hold a truly transparent competition that does our airmen and women justice.  That’s what the American taxpayers expect.  And our service members deserve nothing less.