EVERETT — The Boeing Co. waged a minor battle Tuesday with the Pentagon over its decision to snub the company in a $35 billion tanker competition.
Although Boeing was successful in moving up a debriefing meeting with the U.S. Air Force, the Chicago-based company shouldn’t read that as an indicator it would win a war to overturn the deal, analysts said.
Boeing and its Everett-built KC-767 lost out to duo Northrop Grumman-EADS and their KC-30 tanker. The Air Force, which planned to debrief Boeing about its decision on March 12, will provide its rationale to the company Thursday.
“You rarely see these protests being totally successful,” said Paul Nisbet, an analyst with JSA Research.
Nisbet gives Boeing a 10 percent to 15 percent chance of overturning the Air Force’s decision if the company decides to launch a formal protest. After the Air Force debriefs Boeing on Thursday, the company has 10 days to file a protest with the Government Accountability Office. The GAO gets 100 days to evaluate the protest.
The U.S. House Appropriations Defense subcommittee will hold a hearing with Air Force officials today over the tanker award.
Members of the Washington and Kansas Congressional delegations have bemoaned the Pentagon’s decision to go with a corporation with European ties, particularly one embroiled in an international trade dispute. EADS is the parent company of Boeing’s commercial rival Airbus. The Northrop-EADS tanker is based off the A330, which is one of the aircraft that Boeing claims was subsidized unfairly by European governments.
“Outsourcing a key piece of our American military capabilities to any foreign company is a national security risk,” said Sen. Patty Murray, D-Wash., during a speech Tuesday on the U.S. Senate floor.
Murray and the rest of the delegation on Monday asked the Pentagon to debrief Boeing by the end the week. Boeing made its request Tuesday, after an defense insider published a report indicating Northrop-EADS soundly beat Boeing in each of the Air Force’s key criteria.
Loren Thompson, with the Lexington Institute, noted that Boeing failed to prove its proposal was superior when it came to mission capability, risk, past performance, cost or integration. Air Force reviewers found they could accomplish missions with nearly two dozen fewer aircraft if they selected the Northrop tanker, Thompson wrote. And they had greater confidence that Northrop-EADS could execute their proposal based on Los Angeles-based Northrop’s past performance compared with Boeing’s.
“Northrop Grumman’s victory was not a close outcome,” Thompson wrote.
In its request to the Air Force on Tuesday, Boeing mentioned that press reports contained detailed information about the competition — information the company hadn’t received access to from the Pentagon.
“Initial reports have also indicated that we were judged the higher-risk offering,” said Mark McGraw, Boeing’s vice president of the 767 tanker programs. “Boeing is a single, integrated company with its assets, people and technology under its own management control. … Northrop and EADS are two companies that will be working together for the first time on a tanker, on an airplane they’ve never built before, under multiple management structures, across cultural, language and geographic divides. We do not understand how Boeing could be determined the higher-risk offering.”
Air Force officials indicated in their press conference Friday that they opted for Northrop’s tanker in part because of its larger size. Boeing has stressed the fuel-efficiency of its smaller 767.
“This assertion by Boeing that they didn’t know the Air Force wanted a bigger plane … I don’t know what Boeing is complaining about,” said Scott Hamilton, a local analyst with Leeham Co.
Both Boeing’s and Northrop’s tanker fell within the Air Force’s size requirements with Boeing’s on the smaller end and Northrop’s pushing the larger end, Hamilton said. Boeing had considered offering its 777, which is larger than the 767, as a tanker but ruled it out because it’s both too big and too expensive.
Like Nisbet, Hamilton doesn’t see Boeing being successful with a protest. Besides, Boeing consistently advocated that the Air Force should do the best thing for the American war fighter while promoting its KC-767 tanker. A protest would delay the delivery of tankers and therefore not be in the best interest of the war fighter, Hamilton said.
“Boeing needs to get over it and just move on,” he said.
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