Oct 28 2009

Alabama lawmakers say Pentagon tanker rules unfair

Reuters

By Andrea Shalal-Esa

Alabama lawmakers blasted the Pentagon's bidding rules for a multibillion dollar contract to replace the Air Force's aerial refueling fleet, saying the procedure unfairly favors Boeing.

"I believe it's already tilted toward Boeing. I believe it's a sham," Senator Richard Shelby, a Republican, told reporters at a news conference on Tuesday.

Alabama stands to gain jobs if rival Northrop Grumman and its partner, Airbus parent EADS, win the contract again because much of the final assembly work would be done in that state.

Northrop's team won the last competition in February 2008, a deal valued at up to $35 billion, but the Pentagon canceled it after government auditors upheld a Boeing protest.

Shelby and other lawmakers sent Defense Secretary Robert Gates a letter saying new competition rules released on Sept. 25 were fundamentally flawed and did not meet his objective of a "best value competition that is fair, open and transparent."

The lawmakers also criticized an increase in the number of contract requirements to 373 from 37.

Such a detailed list "makes a mockery of the capability that our warfighters truly value by equating water flow in the toilet with fuel flow in the refueling boom," they said.

They demanded a meeting with Gates to discuss their concerns before the Pentagon releases a final version of the bidding rules at the end of November.

In response, the Pentagon said the competition was not a "rerun" of the prior process and it was taking "very strong steps" to correct criticisms raised by the Government Accountability Office (GAO) the last time.

"We are being very explicit about the criteria that we're going to use, explicit about the scoring system and explicit about the decision tree that will be used to make this selection," said Pentagon spokeswoman Cheryl Irwin.

Northrop and EADS say the Air Force gave pricing data to Boeing after the last competition that gave it an unfair advantage this time around, something the Pentagon denies.

Northrop has scheduled a news conference Wednesday to share additional concerns about the new tanker rules.

Boeing has also raised concerns of its own, criticizing the Air Force for exempting a trade dispute between Brussels and Washington over alleged aircraft subsidies.

The competition is for an initial 179 tankers, the first of three batches to be bought over coming decades at a projected cost of at least $100 billion. The Pentagon hopes to award a contract by June, with the first planes delivered in 2015.

It is the Pentagon's third try in eight years to replace its KC-135 tankers, which average more than 50 years old.

Senator Jeff Sessions of Alabama, also a Republican, said the new rules for the tanker competition put the focus solely on the price of the new tankers, not the increased capability that the Air Force said last time it needed.

He said Northrop had said it would not compete if the process was not fair, which meant the Pentagon faced a noncompetitive process unless it made major changes.

The Alabama lawmakers said the GAO raised concerns about only a handful of issues in the last competition, and the Pentagon should have addressed those and kept the overall structure the same.