Wednesday, June 18, 2008

A Sweeping Denunciation

Give credit to Loren Thompson, the astute airpower analyst who serves as Chief Operating Officer of the Lexington Institute, the national security think tank based in Arlington, Virginia. Analyzing today's GAO decision to uphold Boeing's protest of the Air Force tanker contract, Thompson described it as a "sweeping denunciation" of the service's acquisition practices, which raise "fundamental questions of fairness."

In other words, the Government Accountability Office confirmed what many have long known: the USAF's acquisition effort is hard-broke and (seemingly) incapable of awarding a major weapons contract without corruption, controversy or incompetence.

Today's GAO ruling represents the latest setback for Air Force attempts to field a new generation of aerial tankers. Reviewing the USAF contract that was awarded to Northrop-Grumman earlier this year, the Congressional watchdog found "a number of significant errors," including a "failure to fairly judge the relative merits of each proposal."

In February, the service selected the KC-30 as its next refueling plane, breaking a 60-year tradition of buying tankers from Boeing. While Northrop-Grumman is the lead contractor for the project, the design is based on the Airbus A330, built by European consortium, EADS.
The KC-30 offered greater range and refueling capability than the Boeing entry, based on its 767 jetliner.

While the GAO rejected portions of the Boeing protest, it offered a detailed rationale for rebidding the contract. As the AP reports:

Among [the GAO's] conclusions was that the Air Force awarded the Northrop team improper extra credit for offering a larger plane that could carry more fuel, cargo and troops. It also found that the Air Force improperly increased the likely costs of the Boeing bid and failed to show that Northrop's tanker could refuel all necessary planes.

The ruling by accountability office isn't binding, but the Air Force will likely follow its recommendations, since the GAO's Congressional masters control military funding. Re-opening the contract for bids will require Boeing and Northrop-Grumman/EADS to submit new proposals. That process--along with the required Air Force evaluation and a new decision--will take a year (or longer), further delaying delivery of new tankers.

In fact, by the time the next generation of refueling planes joins the USAF inventory, a decade will have passed. The service began trying to replace its oldest tankers almost six years ago, through a proposed lease of Boeing 767 tankers. That deal was later scuttled, after it was revealed that a senior Air Force civilian official had provided "inside" information to Boeing--and accepted a job offer from the country.

The resulting "lease" scandal sent the Air Force contracting official--and a Boeing executive--to prison. It also prompted a Congressional investigation and forced the USAF to start the bidding process over again. That effort led to the decision announced earlier this year, the Boeing protest, and today's GAO ruling. Six years into the tanker program, the Air Force is back at square one.

Equally troubling, the tanker controversy seems to affirm the USAF's inability to conclude its highest-priority acquisition program. Barely a year ago, the GAO made a similar ruling on the service's CSAR-X helicopter program, rejecting a contract that had been awarded to Boeing. A new decision on the helicopter project is expected later this year. As with the tanker program, delays in CSAR-X mean that rescue crews will be flying old choppers well into the next decade.

As we've noted before, new tanker and helicopters represent the most important acquisition programs for the Air Force. The service's failure to advance these efforts represents yet another black eye for the service--one it can hardly afford. In a previous post, we observed that the tanker project represented one of the highest priorities for the incoming Air Force Chief of Staff, General Norton Schwartz. Today's GAO decision makes that job doubly difficult. Not only does he have to make a case for the "right" tanker, he must also fix the process for selecting that aircraft.


mannaka said...

Hmmmm. So GAO has ruled against the USAF again. What a shocker. I still think that, if I were an AQ type and wanted to award this contract to Boeing, I'd first choose EADS and then let GAO overrule me. That may sound crazy because you'd think it would slow the acquisition process down, but regardless of who one the original award, there was bound to be a protest. At least this way the USAF stands a fighting chance of getting the tankers it really wants. Kind of a reverse logic approach. So what if it gets a little more egg on its face. The USAF's rep with Congress really couldn't get any worse than it already is.

SMSgt Mac said...

Read the AF's redacted post-hearing brief at:

lots of good data between the blackouts. NG sent a link to this out just before the GAO threw their finding on the street.

I think it pretty well torpedos any publically available info on the subject that supports Boeing's position. The NG offer blew Boeing's away, then Boeing and now the GAO are just second guessing.

This is a cowardly GAO 'punt' IMAO.