CQ TODAY – DEFENSE
Feb. 29, 2008 – 7:45 p.m.
Air Force Contract With European Company Sparks Backlash on Capitol Hill

An Air Force announcement about a multibillion-dollar tanker contract that will benefit a European aerospace company has ignited a “Buy American” backlash on Capitol Hill.

The Air Force announced Feb. 29 it will award a contract to build to build the first 179 KC-45 midair refueling tankers to a team of companies — Northrop Grumman Corp. and the North American division of EADS, the parent company of Airbus.

Boeing Co. was the losing bidder.

The deal will be worth about $35 billion, the Air Force said in a statement.

Although the planes will be manufactured in the United States, Airbus’ involvement has left delegations from states such as Washington and Kansas, where Boeing would have built the planes, stunned and indignant.

“We should have an American tanker built by an American company with American workers,” Todd Tiahrt, R-Kan., a member of the House Defense Appropriations Subcommittee, said in a statement. “I cannot believe we would create French jobs in place of Kansas jobs.”

Duncan Hunter of California, the ranking Republican on the House Armed Services Committee, who has tried repeatedly over the years to insert “Buy American” provisions into the annual defense policy bills, castigated the Air Force decision.

“This is a blow and a disservice to the American defense industrial base so vital to our national security interests,” he said in a statement. “This U.S. taxpayer-funded contract was conceded to a socialistic system utilizing a heavily subsidized bid that valued an undercut price ahead of thousands of American workers already struggling to pay their mortgages and send their children to college.”

Industry Assumptions Upended

Among defense industry experts, it was widely assumed that Boeing would win the lucrative contract, not only because it had built the KC-135 and KC-10 tankers now in service, but also because an award to EADS and Northrop Grumman could face political trouble in Congress.

It remains to be seen how members opposed to the decision might try to scuttle it.

“I will work to ensure this decision is thoroughly reviewed at the highest levels of the Pentagon and Congress,” said Tiahrt. “At the end of this laborious process, I hope the Air Force reverses its decision.”

Republican Sen. Pat Roberts of Kansas said he wants a briefing from the Air Force on Monday “to see the numbers that justified a contract for American planes going to a foreign entity, when the merits clearly reside with Boeing.”

He added: “If this decision holds, it will be at the cost of American jobs and American dollars, if not our national security.”

The tanker award also could be a subject of discussion when the Senate Armed Services Committee hears March 5 from Air Force Secretary Michael W. Wynne and Air Force Chief of Staff Gen. T. Michael Moseley.

Prior to the announcement, Air Force officials repeatedly had expressed the hope that the losing bidder would not protest and delay the program. Boeing said in a statement that it would decide its next steps after receiving an Air Force briefing on its decision.

But most members of Washington state’s congressional delegation expressed “outrage” over the tanker award to Boeing’s European competitor.

“This is a blow to the American aerospace industry, American workers and America’s men and women in uniform,” lawmakers from Washington state said in a statement, vowing to ask the Air Force “tough questions” about its decision. “We look forward to hearing the Air Force’s justification.”

Democratic Sens. Patty Murray and Maria Cantwell signed the statement, as did Democratic Reps. Norm Dicks, Rick Larsen, Jay Inslee, Adam Smith, and Jim McDermott, and Republican Rep. Dave Reichert.

Alabama a Winner

The contract award already has been delayed for years as a result of a scandal. Previously, Boeing was to have built the new generation of tankers, but the program was derailed when machinations by Boeing and Air Force officials to twist acquisition rules in favor of the Boeing aircraft came to light. A senior Air Force official was jailed for accepting favors from Boeing while she was overseeing acquisition of the tanker and before taking a job with the company.

Sen. John McCain of Arizona, the likely Republican nominee for president who led the way in criticizing the previous tanker program, had no immediate comment on the decision.

Since the planes would be built mostly in Mobile, Ala., that state’s delegation celebrated the news Feb. 29.

“Today’s contract represents a huge investment in our state,” Sen. Jeff Sessions, R-Ala., said in a statement.

Sen. Richard C. Shelby, R-Ala., said the deal would net Alabama some 5,000 jobs.

“Our state is on a roll economically and the tanker contract adds to the growing momentum,” he said in a statement.

With work on the new tankers to be spread out across several states, Northrop Grumman said the contract would create a total of 25,000 U.S. jobs. Some of those jobs would come under EADS North America.

“We already have begun the work necessary to expand our U.S. industrial footprint in support of this important program,” said Ralph D. Crosby, Jr., the chairman and CEO of EADS North America.

Source: CQ Today
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