Competition must be unbiased, fair

Published 1:14 pm Thursday, January 24, 2008

The Jan. 16 article, “Tanker rivals lob more volleys at each other” on the bids by Boeing and EADS/Northrop Grumman for the Air Force refueling tanker contract, failed to address the most important policy question surrounding the debate: Should we allow EADS to violate international law and leverage foreign subsidies in order to win a plum U.S. defense contract?

EADS has accepted $100 billion in European Union government subsidies, allowing the company to grab over 50 percent of the commercial airline market from U.S. manufacturers. The U.S. Trade Representative is litigating the matter before the World Trade Organization, saying that no single producer should be given “billions of dollars in up-front, risk-free financing.” However, EADS is now trying to use the same subsidies to fund its bid for the $40 billion tanker contract.

Boeing has committed to specific U.S. production facilities where its tanker would support some 44,000 American jobs. But French officials have said they “will use all the means we have to avoid (outsourcing)” work to the U.S. — an EADS tanker would siphon tens of thousands of American jobs to Europe.

Moreover, EADS is facing charges of high-level insider trading and one of the company’s main partners, BAE Systems, is facing a Department of Justice bribery investigation into its recent Saudi fighter jet contract.

Recent defense contactor scandals demonstrate that we should always ensure competitions for defense contracts are unbiased and fair. Congress and the Pentagon should not give EADS a free pass for using illegal subsidies to win a U.S. defense contract.

Richard Michalski