CHICAGO — Boeing Co. still believes its proposal for an aerial refueling tanker was less expensive, less risky and superior overall to that of the rival partnership that was awarded a $35 billion U.S. Air Force contract, the head of its military contracting business said Wednesday.
Jim Albaugh, top executive of Boeing’s Integrated Defense Systems, said the company will press its case at a Friday debriefing with Air Force officials who gave the high-profile contract to Northrop Grumman Corp. and European Aeronautic Defence and Space Co., the parent company to Airbus.
The decision to award the contract, at least in part, to a company overseas has led to calls for an examination of the deal in Congress.
He said Boeing will protest the decision only if it suspects an “irregularity.”
Speaking to a Citigroup conference of defense analysts in New York, Albaugh said the company was surprised to lose the contract because it was convinced it offered exactly what the Air Force sought in the contract’s request for proposal — and for less than the specified $35 billion.
“Based on our reading of the RFP, we offered an airplane that was more cost-effective, we offered an airplane that met the requirements better than the competition, and of lower risk,” Albaugh said.
Air Force Secretary Michael Wynne disputed that viewpoint a few hours later, telling the Senate Armed Services Committee that the Northrop-EADS plane was “clearly a better performer” along with being less expensive and less risky than Boeing’s.
Until Wednesday, Air Force officials had offered few details about why they chose the Northrop-EADS team, although Air Force Gen. Arthur Lichte said last week that the larger size of the Northrop-EADS tanker, the KC-45A, was key.
Albaugh said Boeing couldn’t understand that preference since he said the Air Force hadn’t emphasized size in what it wanted.
“In our reading of the RFP it wasn’t about a big airplane. If they’d wanted a big airplane, obviously we could have offered the 777. And we were discouraged from offering the 777,” he said, declining to elaborate.
Boeing has been expected in some quarters to protest the decision to the Government Accountability Office. Lawmakers, governors, union leaders and Boeing executives all have demanded an explanation for the decision.
But without ruling out a protest, the defense chief said the company disagrees with the protest strategy adopted increasingly by other contractors in recent years.
“I think any company that protests and makes a protest part of their capture strategy is doing a real disservice to the country and to our military,” he said. “They have a need for these programs, and to put delay into the procurement process unnecessarily is a disservice.”
Albaugh said he couldn’t recall Boeing being involved in a GAO protest. “We will only protest in the event that we think there is an irregularity in the proposal phase,” he said.
Boeing shares, which have shed more than a quarter of their value since reaching an all-time high of $107.83 last July, rose 94 cents, or 1.2 percent, to $80.56 in afternoon trading.
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