Air Force Picks Boeing for Controversial Tanker Contract
Award closes a years-long competition over a plane that’s become key to Air Force strategy
Boeing and the European Aeronautic Defense and Space Company (EADS) have been locked in heated competition for years on the contract, which is potentially worth $40 billion. But this saga’s routes go back even further. Today’s award marks the third time the Air Force has tried to select a company to build the new fleet. Last year, The Washingtonian took a look back at the sordid tanker tale, and if history is any guide, today’s announcement will merely be the prelude to another round of intense fighting.
Boeing had strong support from lawmakers in Washington state, where the planes will be built. They pitched the tanker contract as a massive jobs program and openly questioned the political wisdom of awarding such a lucrative deal to a foreign-owned company, particularly as unemployment in the United States remains stubbornly high.
Boeing was the Air Force’s original choice to provide the tankers, but that deal crumbled in 2004 in the wake of a high-level Air Force scandal and relentless hounding by Senator John McCain, who opposed a plan to lease the tankers rather than buy them outright.
The win for Boeing today is a redemption of sorts. After the lease deal fell apart, the Air Force held a full competition for the tanker fleet. In 2008, EADS won, in a partnership with Northrop-Grumman. Boeing protested the award, and a federal review found the Air Force’s selection process was marred by blunders. Defense Secretary Robert Gates ultimately canceled the contract all together. That set the stage for a new competition, which culminated in today’s award.
The Air Force now has ten days to debrief EADS, which will entail explaining where its bid and proposal failed to measure up to Boeing’s. Then, EADS will have another ten days to decide whether to protest the award to the Government Accountability Office. Aviation-industry experts have been bracing for this next stage as practically inevitable. Both companies had too much to lose, and in light of the contract’s twisted history, it was considered unlikely that the loser would simply take it on the chin and move on.
If EADS protests, the company likely will question the Air Force’s handling of the bid and proposal evaluation, probably alleging that it was unfair or mishandled. The Air Force handed both companies ammunition on those grounds last year when it inadvertently sent proprietary information about each company’s proposal to its rival. Pentagon officials testified before Congress that the error didn’t prejudice the process. But now that EADS is on the losing end of the deal, the company may seek to challenge those assertions.
What does all this mean for military, which depends on the tanker fleet to conduct missions around the world? If EADS doesn’t protest, it will likely be a few years at least before Boeing delivers the first tankers. A protest would drag out this timeline out, and if that protest is ultimately sustained and the Defense Department throws out the award, this long, strange trip will begin anew. And the military will have to wait an inestimable number of years for its airplane.