Wednesday, March 12, 2008

Hard Day on the Hill

If Air Force Secretary Michael Wynne and the service’s Chief of Staff, General Michael Moseley, looked a little haggard yesterday, they had good reason.

Both appeared on Capitol Hill and faced withering criticism over the Air Force’s decision to award its new tanker contract to Northrop-Grumman, and its European partner EADS. Supporters of the losing bid (offered by Boeing), were out in full force, and they quickly jumped on Mr. Wynne and General Moseley.

“I ... feel like I was personally misled,” said Rep. Norman Dicks, D-Wash., whose home state would gain jobs from a Boeing victory. “I think the Congress was misled, this committee was misled, the Boeing Co. was misled. ... You’ve got to go back and start over.”

As Erik Holmes of Air Force Times noted, the hearing was supposed to cover the Air Force budget for Fiscal Year 2009. But, rancor over the tanker decision literally “sucked most of the air out of the room” and put service leaders on the defensive.

Dicks alleged that the Air Force continued to change its evaluation criteria to favor a larger airplane, which would favor the Northrop/EADS tanker, a version of the commercial Airbus 330, over the Boeing proposal, a version of the smaller 767 jetliner. He said the Air Force indicated throughout the process that it preferred a medium-sized aircraft over a large one, only to choose the large airplane at the last minute.

Wynne responded that size was never an explicit criterion in the Air Force’s request for proposals, and Boeing had been welcome to put forward its larger 777 but did not.

Another Boeing supporter, Kansas Republican Todd Tiahrt, accused the Air Force of disregarding the impact of its decision on the U.S. economy and American jobs:

“You had two competitors, but they were not on equal footing,” Tiahrt said. “It was not a fair competition. The deck was stacked against the American supplier and against American workers.”

While Wynne and Moseley caught heat from Boeing’s Congressional supporters, the aerospace giant filed a formal protest with the Government Accountability Office. claiming that the service manipulated data in the tanker competition.

In its formal protest, Boeing essentially accused the Air Force of manipulating critical data to not only keep the team of Northrop Grumman and the European Aeronautic Defense and Space Co. in the game after both sides had submitted their tanker bids, but of making eleventh-hour changes that gave the bigger Airbus plane an advantage over Boeing's smaller 767.

"This is pretty serious stuff; it's not nitpicking," Richard Aboulafia of the Teal Group, an industry consulting firm, said of Boeing's allegations.

"And McNerney has gotten involved, too," Aboulafia said, referring to Boeing Chairman and Chief Executive Jim McNerney. "That says to me they would not be doing this if they didn't have something. Will it carry the day? I don't know."

The political element of the tanker saga also took a new turn on Tuesday, with the AP reporting that aides to Senator John McCain lobbied on behalf of EADS, and the co-chair of his campaign received $220,000 from the European defense giant in 2007, according to congressional lobbying records. In response to the AP report, McCain said he only tried to ensure that the process was fair and transparent.

"I had nothing to do with the (current) contract, except to insist in writing, on several occasions, as this process went forward, that it be fair and open and transparent.

"That was my involvement in it."

With the protest now on file, the GAO will have 100 days to investigate and report its findings. Until then, the tanker program is on hold. But, as we’ve noted in previous posts, the delay will likely be much longer.

Political and corporate haggling over big-dollar defense contracts has delayed several acquisition programs in recent years, including the Air Force’s next-generation combat search-and-rescue helicopter (CSAR-X). That contract was also initially awarded to Boeing, but protests from losing firms resulted in a new round of bids. The USAF now expects to name the winner of that contract later this year. That will mean further delays in the delivery of new choppers for its search and rescue units.

If history is any indicator, pressure from Boeing and its supporters will likely derail the tanker contract as well. With thousands of jobs—and billions of dollars—at stake, competitors will use any trick in the book to keep the bidding process open, and undercut their rivals.

Ironically, one of the few voices of sanity in yesterday’s debate came from Virginia Congressman Jim Moran, who could hardly be described as a friend of the Pentagon. As he observed during yesterday’s hearing:

I “believe that the professionals responsible for procurement acted in a professional manner,” Moran said. “Some of us believe that it is the Congress’ responsibility, if they don’t like the law, to change the law. But unless there is something that can be shown to us where the Air Force did not follow the law ... then the disappointment in the results may be only that.”

4 comments:

SMSgt Mac said...

There's been a whole series of posts with running commentary on the Tanker award and protest at DefenseTech.org and elsewhere.
Boeing is playing hardball in the propaganda department, and Boeing's Congressmen are going to fight to win the deal that Boeing couldn't.

By the way, Todd Tiahrt's last job was working for Boeing. He's not an engineer, so his knowledge of the technical details is questionable even if he wasn't 'biased'. Dicks is a pro-military but even more pro-Boeing machine. He stood by the B-2 so strongly because of Boeing's stake in it.

After looking into the airliner market history, the "we didn't know you wanted a different size" claim is bogus. I'm preparing a post myself on this subject because I'm getting tired of seeing it everywhere.

Sad thing is, I prefer Boeing products and design philosophies, but I think with the A330 airframe, Northrop Grumman picked a 'sweet spot' for AF requirements. Given the market histories of each type, the A330 seems to be in the sweet spot for a lot of the airlines as well.

I predict Boeing's protest will tank after everyone gets tired of their proxies screaming easily disproved nonsense.

kitanis said...

What I do not understand is.... The Air Force attempted to do a selection in the proper way, follow the rules and then made a choice between two competitors..

Then the decision is made, knowing full well that both sides would file protests. Then Sentaors and Representatives come out of the woodwork and place another criteria on the Air Force.. To Preserve American Jobs..

After being enlisted in the USAF for nearly 23 years.. I never heard of that being the mission..

I am all for Boeing.. but not if our own government is going to make it a monopoly for military hardware.

davod said...

Moran probably has EADS in his district.

Lani said...

The manufacturing guys over at Evolving Excellence have also been taking Boeing to task, first in terms of the hypocrisy of whining about losing the tanker deal to NG/Airbus at:

http://www.evolvingexcellence.com/blog/2008/03/boeing-whiner-e.html

Then the even greater hypocrisy of the politicians that are siding with Boeing:

http://www.evolvingexcellence.com/blog/2008/03/so-whos-more-pa.html

Ken