Politics at work in Air Force tanker decision

  • Associated Press
  • Friday, October 26, 2007 3:02pm
  • Business

WASHINGTON — The Air Force is just a few months away from awarding a multibillion dollar contract to replace its aging fleet of aerial refueling tankers.

But there is a growing dispute over the possibility that the project could be split between Boeing Co. and a rival international team led by Northrop Grumman Corp. and European Aeronautic Defense &Space Co., majority owner of jetmaker Airbus.

Earlier this month, a group of lawmakers from Kansas, Missouri and other states with thousands of Boeing workers wrote a letter urging Air Force Secretary Michael Wynne to reject the so-called split-buy plan and declare just one winner.

Less than a week later, the governors of five southern states sent their own letter to President Bush, asking him to keep politics out of the tanker competition. The officials from Alabama, Mississippi, Tennessee, Virginia and West Virginia also pointed out how much their states stand to benefit economically if Northrop is chosen to build the tankers.

When it comes to the most lucrative contract in Pentagon history — and the potential for thousands of new jobs around the country — experts say it’s hard to keep politics out.

“The public is ill-served when members of Congress interject regional preferences that skew what otherwise should be decisions that ensure the government receive the best value for its money,” said Steven L. Schooner, co-director of the Government Procurement Law Program at George Washington University.

The deal was supposed to be announced in October but was delayed this week until Jan. 31. Sue Payton, the Air Force’s top executive for acquisition, said the “complexity and amount of information provided by the competing bidders” require more time to evaluate.

But Peter Singer, director of the 21st Century Defense Initiative at Washington’s Brookings Institution, said the latest delay “doesn’t seem like it’s driven by a question over the technical merits. It does seem like politics is starting to weigh in.”

The new tankers, considered to be one of the Air Force’s highest priority purchases, will replace a fleet of KC-135 Stratotankers that have been in service for more than 50 years.

Boeing built the current fleet of KC-135 tankers, which will be phased out by the new planes, and is considered to have the inside edge to win the latest tanker deal. It would build the planes at its factory in Everett, Wash., with finishing work performed in Wichita, Kan.

Boeing estimates that the KC-767 contract would support more than 44,000 jobs at 300 U.S. suppliers. If Northrop wins, the company says it would produce 25,000 jobs at more than 200 suppliers.

“Nearly every state in the union would be touched by Boeing’s KC-767 tanker program, something Airbus cannot say,” said Kansas Rep. Todd Tiahrt, a Republican from the Wichita area.

Boeing says its plane, based on its 767 jetliner, is smaller, more fuel-efficient, and less costly per aircraft than the Northrop proposal. But Northrop says its tanker, based on the Airbus A330 passenger jet, can carry more fuel and cargo.

Boeing initially won a tanker contract in 2004. But it was taken away after a former company executive improperly recruited a former Air Force official while she was still overseeing contracts involving prospective Boeing deals.

The former Air Force official, Darleen Druyun, served nine months in prison for violating federal conflict-of-interest laws. Michael Sears, formerly Boeing’s chief financial officer, spent four months in federal prison for illegally recruiting her.

Loren Thompson, a defense expert at the Lexington Institute, a think tank, said the competition is between two very good planes.

“The debate really comes down to whether the Air Force wants a big fleet of smaller planes or a smaller fleet of big planes,” Thompson said.

Northrop officials have pushed the split-buy option, saying it would lower costs through increased price competition, innovation and flexibility for the Air Force. Other Defense Department programs have relied on the split buy with success.

But congressional critics — many of whom favor Boeing — argue that buying two types of tankers is inefficient and would dramatically increase costs.

“A ‘split-buy’ is bad for tax payers and ultimately bad for the future of the Air Force,” said Sen. Kit Bond, R-Mo. “Requiring two separate contractors to build two separate tankers to perform one mission just doesn’t pass the common sense test.”

The Navy secretary said recently that a split-buy is not feasible for the military, but Singer said the idea seems to have entered back into the discussion.

“There is such intense lobbying going on, we may see this resolved in a policy inefficient but business positive manner, which is basically, ‘We can’t decide; we’ll buy both,”’ Singer said.

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