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.

Blame McCain

Last time we checked, Senator John McCain had barely secured enough delegates to win the GOP presidential nomination. The convention is still months away, as is the general election. And, if he manages to beat his Democratic opponent, McCain won't be sworn-in as Commander-in-Chief until January of next year.

Still, it's never too early to blame a presidential contender for a problem or issue, particularly if might reverberate with the electorate. Consider this headline from today's Financial Times:

Pelosi points finger at McCain on Boeing.

In other words, the House Speaker is blaming Mr. McCain for a recent Air Force decision on a new tanker contract. That decision, announced last Friday, awarded the $40 billion contract to a U.S.-European consortium, led by Northrop-Grumman. That ended a 50-year relationship between the service and Boeing, which has provided the bulk of the USAF tanker fleet since the early 1950s.

To be fair, Ms. Pelosi has a point. Largely through the efforts of Senator McCain, an Air Force plan to lease 767 tankers from Boeing was scuttled almost five years ago. McCain was an early critic of the deal, claiming that the lease would be more expensive than buying new refueling aircraft.

His criticism of the lease plan intensified after it was discovered that Boeing offered jobs to the Air Force's senior procurement official and two of her family members. That official--Darlene Druyun--eventually went to jail on corruption charges, as did Boeing's former Chief Financial Officer.

Revelations of wrong-doing forced the Air Force to cancel the lease deal, and re-open the tanker contract for new bids. The decision announced last week represented the culmination of that process, with the USAF opting for the Northrop-Grumman entrant, which is based on the Airbus A330 airliner.

In other words, John McCain opposed the tanker lease more than five years ago, and in hindsight, his efforts to block the deal were well-founded.

But, because his opposition blocked the contract for Boeing, McCain becomes a convenient target for "outsourcing" American jobs. Along with Nancy Pelosi, other politicians are weighing in, setting their sights squarely on Senator McCain. As the AP reports:

"I hope the voters of this state remember what John McCain has done to them and their jobs," said Rep. Norm Dicks, D-Wash., whose state would have been home to the tanker program and gained about 9,000 jobs.

Having made sure that Iraq gets new schools, roads, bridges and dams that we deny America, now we are making sure that France gets the jobs that Americans used to have," said Rep. Rahm Emanuel, D-Ill. "We are sending the jobs overseas, all because John McCain demanded it."

Boeing's Republican supporters have been equally vocal in denouncing McCain:

"John McCain will be the nominee and I will support him, but if John McCain believes that Airbus or EADS is the company for our Air Force tanker program he's flat-out wrong - and I'll tell him that to his face," said Rep. Dave Reichert, R-Wash.

Rep. Todd Tiahrt, a Kansas Republican whose district includes a Boeing plant that could have gained hundreds of new jobs from the tanker program, said McCain's role in killing the earlier deal is likely to become an election issue. Both of the leading Democratic candidates for president, Barack Obama and Hillary Clinton, have criticized the Air Force decision.

"I think we absolutely will hear more about it," Tiahrt said. "We'll hear it mostly from the Democrats and they have every right to be concerned."

And, speaking of Mrs. Clinton, she offered similar thoughts on the campaign trail last week. Over to you, Senator Obama.

But the Boeing issue may prove to be a double-edged sword, assuming the McCain campaign is willing to exploit it. By siding with Boeing, Pelosi, Emanuel, Dicks (and other politicians) are aligning themselves with a corrupt deal and corrupt officials. It wouldn't be very hard to create a campaign ad, juxtaposing video of Darlene Druyun in prison garb, and shots of Boeing's Democratic friends. Close with the reminder that McCain's actions (purportedly) saved the taxpayer $6 billion, by taking on "special interests." Sounds like a winner to us.

Obviously, McCain's record in defense matters is far from perfect. Still, given the tanker deal's sordid history, the Arizona Senator clearly occupies the political and moral high ground. His actions may not win friends in Boeing's executive suite, or votes in the Puget Sound region. But with a little effective counter-punching, McCain can put the Democrats (and other members of the Boeing lobby) on the defensive.

Someone ought to ask Ms. Pelosi why she supports a company that paid a record, $600-million fine for the corrupt tanker deal--and why the same firm should have the inside track for the "replacement" contract.

Your Tax Dollars at Work (VIP Airlift Edition)

Remember this sight as you're waiting in line at the airport, or sitting on the tarmac during your Thanksgiving weekend flight. From Bill Sweetman at Aviation Week's defense technology blog:

With exquisite timing, Boeing chooses a travel weekend that could go down in the annals of airborne horror to deliver a top-of-the-line Boeing Business Jet that will be assigned to Congress - those folks who have charged billions in air travel taxes over the decades and left us with 1930s blind-landing technology. The jet took off from Seattle this morning for its base at Scott AFB in Illinois.

[snip]

The C-40C, jam-packed with 40 seats by luxury-jet specialists at Greenpoint Technologies, is the third and last of a batch ordered in 2005. They will be operated by the USAF reserve to carry Congressional delegations around the world.

Funny how nobody in Washington ever mentions these $70 million jets as an example of wasteful defense spending. Or as an example of an unjustified Air Force mission that doesn't support our soldiers on the ground.

And don't forget, the travel perks don't end there. In addition to their global junkets on Air Force VIP aircraft, members of Congress also received 32, fully-reimbursed trips to their home districts each year, and free, reserved parking at Reagan National Airport in Washington.

One final thought: the delivery of a new "junket jet" for Congress may infuriate a lot of taxpayers, but there's a method in Boeing's apparent madness. Winners of the KC-X and CSAR-X contracts will be announced early next year, and by delivering the C-40 now (just in time for Christmas holiday "fact-finding" trips), the aircraft giant hopes that some of its Congressional friends will pressure the Air Force to steer those contracts toward Boeing.

H/T: Glenn Reynolds.

A Tale of Two Programs

A DSP deployment during a Space Shuttle mission in 1991. Other satellites in the constellation have been launched from Air Force Titan IV and Delta IV rockets (Wikipedia photo).

For the space and intelligence communities, the first decade of the 21st Century will be remembered as the time when two critical satellite programs ended, but for very different reasons. One, the Defense Support Program (DSP), went out in a blaze of glory on Saturday, with the launch of a satellite that was completed almost a decade ago. Its delayed launch was not the product of technical delays and escalating costs, but largely because DSP satellites have lasted much longer--and performed better--than originally forecast, slowing the need for replacement craft.

The other program, quite literally, never got off the ground. It was cancelled two years ago, but Sunday's edition of The New York Times contained an extensive post-mortem on the effort, aimed at producing the nation's next generation of imagery satellites. As the Times revealed, the program (known as Future Imagery Architecture or FIA) was beset by unrealistic expectations, massive cost overruns, and a contractor that lacked extensive experience in building spy satellites. The result was a "perfect storm" of spiraling costs, shoddy work and unrealized technical specifications that cost the taxpayers "tens of billions" of dollars, according to one U.S. Senator.

In some respects, it may be unfair to compare the DSP and FIA programs. After all, an imagery bird is an infinitely more sophisticated piece of equipment, designed to capture high-resolution electo-optic, infra-red or multi-spectral images of targeted installations, on orbits more than 200 miles above the earth. The DSP constellation, on the other hand, is designed to detect missile launches from its geosynchronous orbit, and relay that information to the ground. Built around advanced IR sensors, DSP is smaller and less complex that imagery satellites, but it performs a mission that is equally important.

But the resounding success of the DSP program (and the comparative failure of FIA) was more than a matter of technology, as the Times article indicates.

"...the collapse of the project, at a loss of at least $4 billion, was all but inevitable — the result of a troubled partnership between a government seeking to maintain the supremacy of its intelligence technology, but on a constrained budget, and a contractor all too willing to make promises it ultimately could not keep.

“The train wreck was predetermined on Day 1,” said A. Thomas Young, a former aerospace executive who led a panel that examined the project.

And problems associated with the project quickly spiraled out of control:

Boeing had never built the kind of spy satellites the government was seeking. Yet when Boeing said it could live within the stringent spending caps imposed by Congress and the satellite agency, the government accepted the company’s optimistic projections, a Panglossian compact that set the stage for many of the travails that followed. Despite its relative inexperience, Boeing was given responsibility for monitoring its own work, under a new government policy of shifting control of big military projects to contractors. At the same time, the satellite agency, hobbled by budget cuts and the loss of seasoned staff members, lacked the expertise to make sound engineering evaluations of its own.

The satellites were loaded with intelligence collection requirements, as numerous intelligence and military services competed to influence their design. Boeing’s initial design for the optical system that was the heart of one of the two new satellite systems was so elaborate that optical engineers working on the project said it could not be built. Engineers constructing a radar-imaging unit at the core of the other satellite could not initially produce the unusually strong radar signal that was planned.

A torrent of defective parts, like gyroscopes and electric cables, repeatedly stalled work. Even an elementary rule of spacecraft construction — never use tin because it deforms in space and can short-circuit electronic components — was violated by parts suppliers.

By the time the project, known by its initials, F.I.A., was killed in September 2005 — a year after the first satellite was originally to have been delivered — cost estimates ran as high as $18 billion.

But there was plenty of blame to go around. The FIA program was on an extremely tight budget, with little room for error. And, making matters worse, the Clinton Administration had eased oversight on key government contracts, allowing vendors to essentially monitor their own efforts. When the program fell behind schedule and over budget, there were fewer government overseers to sound the alarm. And Boeing kept offering rosy predictions, claiming that the program could still be delivered on time.

Instead, FIA had to be eventually scrapped, at a cost of between $4-18 billion, depending on whose estimate you believe. Meanwhile, cancellation of the new imagery satellite (and, the more recent termination of a stealth spy satellite program) has left the United States with an aging intelligence constellation, one that is increasingly vulnerable to mechanical problems and enemy denial and deception (D&D) efforts.

By comparison, the weekend launch of our final DSP satellite provided a stark contrast to the collapse of the FIA effort, providing a reminder of when U.S. space programs delivered dazzling technology, on time, on budget and sometimes exceeding original performance specifications.

Over the past 37 years, the DSP program has become the backbone of our space-based missile warning system. During that time, the platform has undergone a series of technical refinements, improving its detection capabilities and performance reliability. DSP satellites can now detect tactical ballistic launches in the Middle East (and elsewhere), supplanting their original mission of tracking ICBM and SLBM activity in the former Soviet Union and China.

Originally projected to have a service life of less than two years, the DSP platforms are now designed to operate a minimum of five years. But, thanks to superb design and engineering, some of the platforms have lasted for 20 years. Officially, the Air Force won't say how many DSP birds are still in operation, but some are expected to remain on duty well past 2009, when the first replacement satellites (part of a system called SIBRS) will be launched.

Reading the account of the final DSP launch, you also gain an appreciation for the highly-skilled experienced workforce associated with the long-running Northrup-Grumman program. Peggy Paul, Northrup's DSP manager, estimates that more than 25% of her team is retirement eligible, and "quite a few" will leave the company, now that the last DSP satellite is on orbit. Many of Paul's engineers have decades of experience in the program; some have spent their entire careers working on DSP.

Replacing that talent is going to be a major problem, not only for Northrup-Grumman, but for the entire defense establishment. Engineers who spent their careers in programs like DSP were motivated by a desire to work on cutting edge technology, and contribute to the nation's defense.

Today, fewer young Americans are opting for careers in science and engineering, and many of them would rather work for Apple or Google, instead of Northrup-Grumman and Boeing. If we don't find a way to reverse that trend (and build stable, experienced engineering teams at defense contractors) we'll face more debacles like FIA. Of course, it would also be equally helpful to fix the acquisition process, ensuring that the Pentagon isn't hoodwinked by contractors who promise more than their engineers can deliver--and expect the taxpayers to bail them out when they fail.