Was Boeing led to offer wrong jet?

EVERETT — The Boeing Co. reiterated on Wednesday that its 767 tanker was the better offering for a lucrative government contract, while Air Force officials disputed the claim.

The two sides are expected to meet Friday to discuss why Boeing lost a $35 billion deal to EADS and Northrop Grumman. The decision, announced late last week, sparked debate in a Congressional hearing whether American job creation and foreign government handouts should be a factor in U.S. military contracts. Boeing will ponder a protest after its debriefing with the Air Force.

“We will only protest in the event that we think there is an irregularity in the proposal phase,” Jim Albaugh, Boeing’s chief of its defense division, said during a conference in New York.

Boeing’s Albaugh suggested the Air Force’s emphasis on a larger tanker wasn’t communicated clearly, leading Boeing to pitch perhaps an aircraft too small to meet the Air Force’s needs. Boeing offered a tanker based on its Everett-built 767 commercial jet, which Albaugh claimed is less expensive and less risky than Northrop-EADS’ tanker.

The Northrop-EADS’ KC-30, its design based on an Airbus A330 jet, is a bigger aircraft with a greater ability to carry cargo and passengers, the Air Force has said. The European and Aeronautic Defence Space Co. is the parent company of Airbus.

“In our reading of the (bid criteria), 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,” Albaugh said, declining to elaborate.

On Capitol Hill, U.S. Rep. Norm Dicks, D-Wash., gave a similar account to members of the House Appropriations Defense subcommittee on Wednesday. The panel met with Air Force officials, hoping to gain insight on the agency’s reasons for passing over Boeing, which has been the agency’s tanker provider for more than 50 years. Dicks accused the Pentagon of making last-minute criteria changes that benefited Boeing’s rival.

“The most damning of all is the bait-and-switch tactics used by the Air Force,” Dicks said.

Dicks said the changes were made in order to keep Northrop-EADS from dropping out of the competition. The duo considered doing so in January 2007, about the time the evaluation criteria was finalized, said Sue Payton, an Air Force acquisition official. The Air Force already was forced to redo its tanker procurement process having awarded Boeing a leasing deal several years ago. The agreement was nullified over an ethics scandal.

Payton said the Air Force worked diligently to ensure an open and fair competition this time around. She disputed Dicks’ accusation.

“I am not willing to say changes were made to accommodate Airbus,” she said.

Payton did confirm, however, that the Air Force gave no weight to which proposal would create the most American jobs. Boeing has said its KC-767 tanker supports 44,000 positions while Northrop-EADS creates 25,000. The consortium will assemble its KC-30 tanker in Mobile, Ala.

In a statement released Wednesday by Northrop, the Los Angeles-based defense contractor asserted that its tanker program “does not transfer any jobs from the United States to France or any other foreign country” — another concern raised by Dicks and Rep. Todd Tiahrt, R-Kan., during the subcommittee hearing. Boeing would do finishing work on its tanker in Kansas.

“We are stacking the deck against the American manufacturer,” Tiahrt said.

“Congress must act to save the Air Force from itself.”

The two Congressmen also suggested the Air Force should have considered a trade dispute between Boeing and Airbus in which the Chicago-based jet maker alleges that European governments subsidized the development of Airbus’ A330.

The Air Force isn’t supposed to consider those factors under its procurement guidelines, Payton said. She couldn’t reveal the details of how the competitors fared until the companies are debriefed.

Boeing’s Albaugh wouldn’t rule out a protest but 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,” Albaugh said. “They have a need for these programs, and to put delay into the procurement process unnecessarily is a disservice.”

The Associated Press contributed to this report.

Talk to us

More in Herald Business Journal

The tower of Paine Field Airport stands in a fog bank forcing flights to be averted or cancelled in Everett, Washington on January 25, 2022. (Kevin Clark / The Herald)
More 5G-related cancellations as Paine Field fog persists

The FAA has not cleared certain planes to land in low visibility in Everett due to nearby 5G cellular towers.

Funko mascots Freddy Funko roll past on a conveyor belt in the Pop! Factory of the company's new flagship store on Aug. 18, 2017.  (Dan Bates / The Herald)
Despite Arizona move, Everett leaders expect Funko HQ to stay

The toymaker is closing Everett warehouses. But a recent “HQ2” expansion has the city confident Funko will remain rooted here.

2021 survey results from the State Broadband Survey for Snohomish County. (Washington State Department of Commerce)
$16M grant to speed up broadband to north Snohomish County

In Darrington and elsewhere, rural residents have struggled to work remotely during the pandemic. A new project aims to help.

FILE - In this March 31, 2017, file photo, Boeing employees stand near the new Boeing 787-10 Dreamliner at the company's facility in South Carolina after conducting its first test flight at Charleston International Airport in North Charleston, S.C.  The International Association of Machinist says six of its earliest and most vocal members have been fired at Boeing’s South Carolina plant, months after some employees at the sprawling North Charleston campus voted to join the union.  The Machinists tell The Associated Press that half a dozen employees were terminated from the North Charleston production facilities earlier in 2018. (AP Photo/Mic Smith, File)
Boeing posts $4 billion loss tied to problems with 787 jet

Manufacturing problems with the Dreamliner will add $2 billion to the company’s production costs.

An Alaska Airlines Embraer 175 airplane bound for Portland, Ore., takes off Monday, March 4, 2019, at Paine Field in Everett, Wash. The flight was the first flight on the inaugural day for commercial passenger flights from the airport. Alaska Airlines began scheduled flights Monday, and United Airlines will begin commercial flights on March 31, 2019. (AP Photo/Ted S. Warren)
5G-related airline cancellations arrive at Paine Field

One type of plane serving Everett is subject to restrictions due to feared cellular phone interference with navigation.

FILE - Washington Attorney General Bob Ferguson talks to reporters, Monday, Aug. 26, 2019, during a news conference in Seattle. In a 5-4 decision Thursday, Jan. 20, 2022, the Washington Supreme Court upheld an $18 million campaign finance penalty against the Consumer Brands Association, formerly known as the Grocery Manufacturers Association. Ferguson sued the group in 2013, alleging that it spent $11 million to oppose a ballot initiative without registering as a political committee or disclosing the source of the money. (AP Photo/Ted S. Warren)
Washington justices uphold $18M fine in GMO-labeling case

Big grocers funneled dark money into a campaign against genetically modified labels on food packaging.

In this photo taken May 17, 2017, wine barrels are shown at a vineyard adjacent to the Walla Walla Vintners winery in Walla Walla, Wash. The remote southeastern Washington town of Walla Walla - which used to be best known for sweet onions and as home of the state penitentiary - has now reinvented itself into a center of premium wines and wine tourism. (AP Photo/Nicholas K. Geranios)
More sustainable Washington wines are on the way

Labels will indicate grape growers met guidelines in 9 areas, including water, pest and labor practices.

Funko warehouse in Everett. (Kevin Clark / The Herald)
Funko to close Everett warehouses, shift work to Arizona

The company headquarters are currently in downtown Everett, but distribution will move to a Phoenix suburb.

FILE - In this Monday, March 1, 2021 file photo, The first Alaska Airlines passenger flight on a Boeing 737-9 Max airplane takes off on a flight to San Diego from Seattle-Tacoma International Airport in Seattle. A Boeing pilot involved in testing the 737 Max jetliner was indicted Thursday, Oct. 14,2021 by a federal grand jury on charges of deceiving safety regulators who were evaluating the plane, which was later involved in two deadly crashes. (AP Photo/Ted S. Warren, File)
Alaska Airlines to add Boeing 737s to the Paine Field fleet

It’s a sign of the growing popularity of flying from Everett. So far, much smaller Embraer E175s have been the rule.

Most Read