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The Boeing Co.  (click to enlarge)
A Boeing 777 tanker (left) refuels a Boeing 767 tanker in this artist's rendering.
 
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CONTACT THE HERALD
Mike Benbow, Business Editor
benbow@heraldnet.com
 
Published: Monday, November 30, 2009

Final rules in Air Force tanker contest due any day

EVERETT — At any moment, the U.S. Air Force could release the final rules for its tanker contest that pits the Boeing Co. against duo Northrop Grumman and EADS.

Last week, the Air Force released 80 pages of responses to questions and comments submitted by Boeing and Northrop as the agency tries to clear up any ambiguities about its requirements for a new aerial refueling tanker. The Pentagon had hoped to publish its final set of requirements for the multi billion-dollar competition by the end of November. But the Pentagon's chief weapons buyer declined last week to say whether the Air Force would meet that goal.

The Pentagon expects to award the lucrative contract next summer — after two previous attempts at doing so. But the likelihood is high that the Air Force's pick will be protested by the losing party.

In the two months since the Air Force published its draft, the contest has grown more important in the eyes of Washington state politicians. In late October, Boeing selected South Carolina as the site of its next 787 production line rather than Everett. Washington's Congressional delegation has stepped up its pressure on the president and Pentagon over Boeing's key criticisms of the tanker contest.

Boeing has argued that the Air Force should take into account an international trade ruling against Airbus over illegal subsidies. Northrop and EADS will offer the Air Force a tanker built from an Airbus A330 commercial jet. EADS is Airbus' parent company.

“Our position has been and remains that government subsidies to Airbus are market-distorting and a violation of WTO rules,” wrote Bill Barksdale, Boeing's tanker spokesman, on the company's Web site. “For KC-X, we seek what anyone else in the industry would seek — a fair competition on a level playing field where everyone is held to the same standards and transparency.”

Rep. Norm Dicks, D-Wash., has suggested the Pentagon tack on a penalty of as much as $5 million per airplane to Northrop and EADS' bid. And Reps. Jay Inslee and Rick Larsen, D-Wash., appealed to President Barack Obama on the issue.

Since releasing its draft requirements in September, the Pentagon has maintained that it will not consider the WTO ruling in its tanker contest. As recently as last week, the Pentagon's chief arms buyer, Ashton Carter, told reporters that the agency will not incorporate the trade ruling in its final set of requirements given that the ruling is preliminary and that Airbus has a countersuit pending.

Northrop officials dismiss Boeing's WTO concerns, saying their tanker will create jobs in this country and is more modern than Boeing's and thus a better value to the war fighter.

“Northrop Grumman offers to create new jobs building the tanker preferred throughout most of the world,” Northrop wrote, on its tanker Web site. “The competitor offers to continue a line of planes that are no longer commercially viable to provide a tanker that has already been rejected by Australia, the United Kingdom, and other wealthy nations.”

Northrop and its supporters are lobbying for the Air Force to release pricing information on Boeing's tanker since the Pentagon gave similar information on Northrop's tanker to Boeing last year. Northrop officials have declined to rule out legal action against the Air Force over the issue.

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Split the Order already...
This is ridiculous and has gone on long enough. America wins in both scenarios. This is a huge contract and can provide the US with jobs for Boeing and Northrup.
People will argue that they want a single Airplane design for ease of training, maintenance, and parts, but the airlines have been doing it for years and seem to do just fine.
Split the order already...

Pete Peterson | Dec 1, 2009 11:13 am | 0 replies | Request removal

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