Aug. 6, 2008 – Updated 5:54 p.m.
Congressional supporters of the Boeing Company are sharply criticizing the Pentagon’s latest revision Wednesday to its bidding competition for a fleet of aerial refueling tankers.
Those lawmakers said the revised request for proposals for the $35 billion contract maintains the advantage of Northrop Grumman Corp., whose Airbus A330 is significantly larger than Boeing’s KC-767.
Some of the Pentagon’s changes to the competition seem to favor each competitor, but Boeing supporters on Capitol Hill saw little to like.
“After going round after round on one of our military’s most important and critically needed procurements, this draft RFP changes the rules of the game in overtime,” said Sen.
Rep.
“Since the department seems to be confused on what type of tanker it believes is needed at this time, I believe that moving forward with such a large procurement in such a precipitous manner is inadvisable, and I believe that it’s time for Congress to exert greater control of this process,” Dicks said.
Shay Assad, the Defense Department’s director for procurement and acquisition policy, explained that the Pentagon had always intended to give credit for fuel capacity above the threshold level, but had just worded it clumsily in the first go-around.
“It was always out intention to give positive consideration for the amount of fuel offload above threshold,” said Assad, “We’ve now revised the language to make it unambiguous that we intend to provide consideration above the threshold for fuel offload.”
The contract to develop and build up to 179 tankers was awarded in late February to a consortium made up of Northrop Grumman and the North American division of the European Aeronautic Defence and Space Co., or EADS, rather than to Boeing. Boeing protested to the Government Accountability Office, which recommended June 18 that the competition be redone.
Assad said the Pentagon plans to award the new contract by Dec. 31. Bidders now have 45 days to resubmit revisions to their proposals, which would give the Pentagon about three months to consult with the bidders and come to a decision.
Even the timeline provoked criticism from Murray, who called the 45-day window for new submissions “simply unrealistic.”
In a ruling that could favor Boeing supporters, the Pentagon in its solicitation did agree to consider the life-cycle costs of the new plane over a 40-year planned operating timeline, rather than 25 years. The larger Northrop-EADS aircraft would burn more fuel over time, perhaps raising its estimated cost as fuel prices go up.
Even so, members of Congress from the Alabama and Mississippi delegations, where a Northrop tanker would largely be assembled, greeted the announcement favorably.
“I am hopeful that this draft RFP, while addressing the concerns of the GAO, will maintain a level playing field for both competitors,” said
Their strategy is to persist in pushing for Congress to stay out of the acquisitions process.
“I will continue to insist that this competition is conducted without political interference so that it leads to the selection of the best aircraft, based on the merits and capabilities of the respective proposals,” said Sen.
But Boeing supporters have already started to flex their muscle in order to pressure the Pentagon to address their list of concerns about the new competition.
Sen.
Dicks used his position as vice-chairman of the House Defense Appropriations Subcommittee to have a similar list of conditions inserted into the draft of the fiscal 2009 Defense appropriations bill.
But the Pentagon didn’t use those requirements when coming up with the new competition rules and isn’t sure if their new RFP complies, according to Assad.
Several members have also called on the Pentagon to consider industrial base concerns in their evaluation, considering that the Boeing plane would have a higher level of domestic manufacturing input.
Sen.
But Assad said those concerns would not be included in the evaluation. The Defense Department has fulfilled its statutory obligation simply by researching industrial base concerns, he maintained.
“We’re required to do an analysis . . . the Defense Department did that analysis . . . and I think we’ve complied with the law,” said Assad.
John M. Donnelly contributed to this story.
First posted Aug. 6, 2008 5:15 p.m.


