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August 1, 2008
"Lawmakers Boost Boeing’s Tanker Bid"
WASHINGTON – "The Boeing Co. received a major boost Wednesday from a House subcommittee, which moved to impose tight restrictions on the Pentagon as it seeks new bids on a $35 billion contract for Air Force aerial refueling tankers."
The action was the first on Capitol Hill since the Air Force awarded the contract to a European aerospace company and its U.S. partner earlier this year. The Air Force decided to reopen the competition after Boeing protested and congressional auditors found “significant errors” in the decision.
Pentagon officials had indicated that they would release a draft of a revised request for bids by the end of July. But the action by the House Defense Appropriations subcommittee put a new twist in the Air Force’s seven-year effort to replace its fleet of more than 600 Eisenhower-era tankers.
The defense spending bill approved by the subcommittee essentially would require the Pentagon to abide by the provisions of the earlier bid proposal, something the Government Accountability Office said was not done in the original competition.
The bill would:
• Require the Pentagon to seek a medium-sized tanker like the one Boeing offered.
• Prohibit extra credit for a larger tanker like the one offered by Northrop Grumman and the European Aeronautic Defense and Space Co.
• Require that a new tanker be capable of refueling all of the planes currently flown by the Air Force, a requirement the Northrop-EADS tanker was unable to meet but was dismissed by the Air Force in the earlier competition.
• Require the Pentagon to consider the cost of operating the new tankers over a 40-year life cycle, rather than a 25-year life cycle. That could favor the Boeing plane, which according to one analysis would use $35 billion less fuel over 40 years.
The measure provides more than $893.4 million for the tanker program in the coming fiscal year, but the Pentagon has to come back to the subcommittee for approval before spending the funds.
Details of a defense appropriations bill usually are not released until the bill comes before the full House Appropriations Committee, but McClatchy Newspapers obtained a copy of the tanker language Wednesday.
Not surprisingly, Boeing was pleased with the outcome.
“We appreciate this strong bipartisan support for following the GAO (Government Accountability Office) recommendations and look forward to working with our customer towards delivering the right aircraft into the hands of the warfighter,” Boeing said in a statement.
The Defense Department declined comment, and Northrop-EADS had no immediate comment.
The language was inserted in the defense spending bill by the subcommittee’s chairman, Rep. John Murtha, D-Penn., after nonstop lobbying by the No. 2 Democrat on the subcommittee, Washington Rep. Norm Dicks, the veteran from Belfair. Rep. Todd Tiahrt, R-Kan., is also a member of the subcommittee.
“The bottom line is this is good language,” said Dicks. “We went through each of the GAO’s recommendations and told them to fix it. I hope this sends a strong message to the Defense Department this needs to be done fairly.”
The bill will be considered by the full House Appropriations Committee after Congress’ August recess and might be one of the few spending measures that Congress approves this year. Most of the other appropriations bills are stalled by a dispute over offshore oil drilling.
The defense spending bill is considered a must-pass measure as it provides funding for troops fighting in Iraq and Afghanistan.
The Senate has taken no action on its version of the bill.
EADS is the parent company of Airbus, Boeing’s chief rival in the commercial airplane market.
The Boeing tanker would be based on a 767 airframe built at the company’s Everett plant and modified for military use at the company’s facilities in Wichita, Kan. At stake are an estimated 9,000 jobs in Washington state and 1,000 or so in Kansas.
The Northrop-EADS tanker would use an A330 airframe, currently assembled in Toulouse, France, using French, German, English and Spanish parts. The tankers would eventually be assembled in Mobile, Ala., but work on a new plant planned there has not begun.
The contract, one of the largest in Defense Department history, could eventually be worth $100 billion.
Les Blumenthal: 202-383-0008"
LES BLUMENTHAL; lblumenthal@mcclatchydc.com
From the News Tribune of Tacoma, WA
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