A Minor Victory

Boeing has scored a minor victory in its on-going battle to challenge the Air Force tanker contract, recently awarded to rival Northrop-Grumman and its European partner, EADS.

On Wednesday, the Government Accountability Office (GAO) denied dismissal motions filed by the Air Force and Northrop-Grumman, after Boeing submitted additional materials to support its protest.

In a press release, Northrop-Grumman claimed that Boeing had "streamlined" its objections, eliminating many of the elements that "were central to the Air Force and Northrop-Grumman motions." However, a Boeing spokesman told Reuters that the Northrop-Grumman claim was "pure spin," noting that his company added material to its original filing, instead of eliminating key objections.

The GAO's decision eliminates any hopes for a quick resolution of the protest. "This means we're going to go through the entire process," a senior Air Force official observed. The GAO is expected to rule on Boeing's protest by late June, although that deadline could be pushed back, if required.

In their motions to dismiss the protest, both the Air Force and Northrop-Grumman claimed that some of Boeing's objections should have been raised before the company submitted its final bid.

Boeing said it was encouraged by the GAO's decision.

Given the political tempest surrounding this contract, it's no surprise that the GAO refused to dismiss Boeing's protest. And while they won't admit it, neither the Air Force nor Northrop-Grumman was taken aback by yesterday's decision. Their efforts to dismiss the protest were almost a formality. With billions of dollars--and thousands of jobs--on the table, no one expected the GAO to summarily reject the Boeing protest, and give a green light to the Northrop-Grumman contract.

We'll also go out on a (short) limb and predict that the GAO's final decision may not be announced until the late summer or early fall. There's simply too much riding on this contract, giving the GAO more reason to fully scrutinize Boeing's protest.