Although new details emerged Thursday about the U.S. Air Force’s mix-up of tanker bid information, what became most clear is that the $35 billion contest, which has lasted a decade, is far from over.
“A lot of political posturing and little substance” is how local analyst Scott Hamilton described Thursday’s tanker hearing on his Leeham Co. Web site.
The Senate Committee on Armed Services held a two-hour hearing on what the Air Force has described as a clerical error — providing defense contractors the Boeing Co. and EADS with computer disks containing information about the other’s tanker offer. The Air Force, which took heat from both sides of the political aisle, has tried two previous times to replace 179 of its aging KC-135 tankers. Despite the data disclosure, the Air Force is proceeding with its contest and plans to announce a winner as early as next month.
“The Air Force appreciates the committee’s understanding as we balance the requirement to be accountable to the Congress and the public for our mistakes, while protecting against disclosure of information that would endanger successful completion of the KC-X source selection,” the Air Force said in a statement.
Based on accounts submitted by Boeing and EADS and Air Force testimony at the Senate hearing, the following took place in November:
Both contractors received two computer disks. On each disk, the contractors found a parent folder labeled either “K76B” for Boeing’s 767-based tanker bid or “K30B” for EADS’ A330-based bid.
Boeing employees did not open the folder on their second disk when they saw it was labeled “K30B.”
An EADS’ employee opened the parent folder labeled “KC76B,” but realized quickly the mistake after seeing 10 lines of data on the summary page. The employee viewed the information for an estimated 15 seconds before stepping out to contact another employee on how to proceed. The page was open for three minutes.
The Defense Department’s forensic team found no evidence that the EADS employee printed the summary, viewed other data on the disk or copied the information to another file.
After being notified of the mix-up, receiving the disks in question and looking at the competitors’ computers, the Air Force determined it would level the playing field by providing Boeing with the equivalent summary information about EADS’ bid. This occurred 21 days after the data disclosure.
Neither contractor has lodged a complaint about the incident but both still have that option.
“Boeing’s behavior in this instance is emblematic of our conduct throughout this competition,” wrote Dennis Muilenburg, president of Boeing’s defense unit, in testimony submitted to the Senate committee. “We have competed fairly and aggressively.”
EADS and the Air Force managed the incident in “good faith and full compliance,” wrote Sean O’Keefe, chief executive of EADS North America.
“Unfortunately, it appears that some are attempting to exploit the U.S. Air Force’s inadvertent error by speculating on events which are not in evidence,” O’Keefe wrote.
Following the hearing that she requested, Sen. Maria Cantwell, D-Wash., sent a letter to the inspector general of the Defense Department requesting an investigation of the data mix-up and its effect on the tanker contest. In her letter, Cantwell called the Air Force’s response “an attempt to paper over the unethical conduct by one of the bidders.”
Cantwell represents Washington, the state where Boeing would build its tanker. Six senators signed the letter, including Washington’s Patty Murray.
Sen. Jeff Sessions, R-Ala., questioned the timing of the Senate committee hearing. EADS, the parent company of Airbus, has said it will assemble its tankers in Mobile, Ala.
“Now, on the eve of the (award), we’ve got people trying to destabilize the competition,” Sessions said.
The highly politicized contest has led analyst Hamilton to conclude the Air Force should split the award between EADS and Boeing, a solution he sees as the only way of moving the contract forward.
“Nobody seems to give a damn about the needs of the warfighter anymore,” Hamilton noted. “It’s solely, entirely, 100 percent about Boeing versus Airbus and jobs rather than … the needs of the warfighter.”
Italy’s first 767 tanker
The Boeing Co. has delivered the first of four 767-based tankers to Italy’s air force.
The tanker left Boeing’s site in Wichita, Kan., and landed south of Rome on Thursday. Italy will put the aircraft through a series of tests before it enters its air force fleet.
Boeing originally had planned to deliver Italy’s tanker in 2005. The company plans to hand over the second tanker in the coming months.
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