Oct 27 2009

Alabama leaders say tanker plan 'fundamentally flawed'

Mobile Press Register

By GEORGE TALBOT

Alabama political leaders on Monday stepped up their criticism of the Pentagon's proposed guidelines for the U.S. Air Force tanker contest, saying in a letter to Defense Secretary Robert Gates that his acquisition plan is "fundamentally flawed" and must be amended to protect the interests of the military and taxpayers.

Eight members of Alabama's congressional delegation, led by Republican U.S. Sens. Richard Shelby and Jeff Sessions, signed a scathing, two-page letter to Gates that laid out a series of concerns over the Air Force's draft request for proposals.

The 1,000-plus page request, released to potential contractors on Sept. 25, details the Air Force's requirements for the new planes and explains its strategy for selecting a winning bid.

"While we support the department's effort to quickly move forward with the tanker competition, this draft RFP is fundamentally flawed and does not achieve your stated objective of conducting a best value competition that is fair, open and transparent," the congressmen wrote. "It fails the test of rationality."

Gates could not be reached for comment Monday night.

The competition for the potential $40 billion tanker contract pits Chicago-based Boeing Co. against a trans-Atlantic team led by Los Angeles-based Northrop Grumman Corp. and the European Aeronautic Defence and Space Co., the parent company of Airbus.

It's a contest with big stakes for Alabama.

Northrop and EADS have announced plans to build a $600 million, 1,500-worker aircraft assembly plant in Mobile if their KC-45 tanker is selected by the Air Force. Airbus would add assembly of commercial A330 freighters, boosting the plant's production capacity and helping to draw waves of aerospace suppliers and other related jobs along the Gulf Coast.

The KC-45 won out against Boeing's KC-767 in a competition last year, but the deal unraveled when federal auditors, acting on a protest filed by Boeing, found problems with the way the Air Force conducted its evaluation.

That led Gates to order a new competition beginning this fall, with an eye toward picking a winner for the 179-plane contract by summer 2010.

The companies are halfway through a 60-day window in which they are invited to submit comments and concerns about the draft RFP to the Air Force. Top military officials have said they'd like to issue a final request for bids by late this year.

Northrop has already raised complaints that Boeing received details of its winning bid last year but that the Pentagon has not given Northrop equal access to Boeing's bid.

Boeing has argued that the Air Force should factor a World Trade Organization dispute over government support for aircraft development into its decision.

The Alabama members of Congress steered clear of those issues in their letter to Gates.

Instead, they argued that the draft RFP fails to address the urgency of buying new tankers, diminishes the value of superior performance and fails to hold the contractors accountable for the promises they make to the Pentagon.

"It is unconscionable that the government would abandon its duty to assess risk on behalf of the taxpayers, particularly when cost and schedule realism proved to be significant discriminators during the last competition," the letter reads.

The group also criticized the Pentagon's plan to structure the deal as a fixed-price contract, placing caps on the amount the Air Force will pay for the new planes. They said the 18-year length of the contract "creates an unworkable scenario" that ultimately will cost the taxpayer.

The letter was signed by Shelby, Sessions, and U.S. Reps. Jo Bonner, R-Mobile; Artur Davis, D-Birmingham; Spencer Bachus, R-Vestavia Hills; Robert Aderholt, R-Haleyville; Mike Rogers, R-Saks; and Bobby Bright, D-Montgomery.

The lone holdout was U.S. Rep. Parker Griffith, D-Huntsville, whose north Alabama district counts Boeing as a major employer.

Shelby said the group planned to detail its concerns at a news conference today in Washington, D.C.