Business

<< Previous   of   Next >> Jennifer Buchanan / Herald file photo  (click to enlarge) Sen. Patty Murray (left), with Sen. Maria Cantwell, both D-Wash., addresses the crowd at the Machinists Union Hall on June 20 in Everett. On Thursday, Murray said she would like to meet with Defense Secretary Robert Gates to see how the Pentagon will respond to the GAO ruling on the tanker deal.   ADVERTISEMENT   CONTACT THE HERALD Mike Benbow, Business Editor benbow@heraldnet.com   Published: Friday, June 27, 2008 Air Force told it must rebid tanker contract A bill introduced in Congress would require the military branch to rebid its tanker contract or award it to Boeing. By Michelle Dunlop Herald Writer EVERETT -- Newly released details of a botched Air Force tanker bid spurred action in Congress, with lawmakers insisting the $35 billion contract be reopened for bids or awarded to the Boeing Co. "The Air Force used a flawed and incompetent process to evaluate the original KC-X tanker proposal," said Rep. Todd Tiahrt, R-Kan. "My bill offers two choices. The Air Force can either award the contract to Boeing ... or the Air Force can rebid the tanker contract on a fair and level playing field -- the way it should have been done the first time." Government investigators recently sustained Boeing's protest of the Air Force's decision to award the lucrative contract to Northrop Grumman and EADS. Boeing would assemble its KC-767 tanker in Everett and install military applications in Kansas. Lawmakers from Alabama, where the Northrop and EADS' KC-30 would be built, condemned Tiahrt's bill, introduced Thursday in both the U.S. House of Representatives and the U.S. Senate. On Wednesday, the Government Accountability Office released further details as to why it sided with Boeing and recommended that the Air Force reopen discussions with the two competitors. The GAO found "significant errors" in the procurement process. The Air Force, which has 60 days to respond, is not bound to comply with the GAO's ruling. Tiahrt, along with fellow Kansas Republicans Sens. Pat Roberts and Sam Brownback, introduced the KC-X Tanker Recompete Act, prohibiting the use of any funds by the Department of Defense for the tanker unless the Air Force either awards the $35 billion deal to Boeing or "decides to fairly recompete" the contract. Rep. Dave Reichert, R-Wash., was a co-sponsor of the bill in the House. Under the new competition rules set forth by the legislation, the Department of Defense needs to consider national security and industrial base concerns. It also forces the Pentagon to consider the effect of additional regulatory burdens placed on American companies whose foreign competitors do not face such burdens. The legislation was not met well by Rep. Jo Bonner, R-Ala. "That act tells the warfighter -- take the 767 -- take it or leave it -- or face years of delay to conduct a new competition," Bonner said in a statement. "Boeing's 767 is a plane, mind you, the Air Force decided was second best to the more capable, more modern, more fuel-efficient Northrop aircraft -- an aircraft, I am proud to say, which will be built in Alabama." Defense Secretary Robert Gates said Thursday that he has made no decision on whether the Air Force should rebid the $35 billion refueling-tanker contract found to be riddled with mistakes. Gates is meeting with other Pentagon leaders to determine what to do in the wake of the GAO report that found the Air Force failed to evaluate on their merits the competing proposals to build refueling tankers. The GAO said the Air Force repeatedly offered unfair preference to Northrop and Airbus parent European Aeronautic Defence and Space Co. over Boeing. Still, Gates said he doesn't think it is appropriate for his office to take over the contract and remove it from Air Force control. "We clearly need to have an approach that has the confidence of the Congress," Gates said, adding that officials are looking at several options. Asked if he still has confidence in the Air Force, including Air Force Assistant Secretary Sue Payton, Gates offered only a lukewarm assessment. "We've clearly had problems with the tanker contract," Gates said. "And this time around is not the first time, obviously. And so, I think I need to get a better feel for the GAO report and for the criticisms and the nature of the criticisms that they have made." Sen. Patty Murray, D-Wash., said on Thursday that she has called for a meeting with Gates to see how the Pentagon will respond. "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," Murray said in a Senate 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." The Associated Press contributed to this report. Reporter Michelle Dunlop: 425-339-3454 or mdunlop@heraldnet.com.

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