Jun 26 2008

Gates wants fast resolution on tanker

Mobile Press Register

By George Talbot

Defense Secretary Robert Gates vowed Wednesday to find a quick resolution to the U.S. Air Force tanker controversy, saying he would intervene in a heated political dispute over the potential $40 billion con tract.

Gates met Wednesday with Pentagon lawyers, Air Force officials and John Young, the under secretary of defense for acquisitions, to discuss the contract in the wake of a stinging review last week by the Government Accountability Office. The watchdog agency on Wednesday released a detailed explanation of its ruling, saying Boeing Co. might have won the coveted deal over rival Northrop Grumman Corp. if the Air Force conducted a fair competition.

"We believe that Boeing would have had a substantial chance of

being selected" if not for mistakes made by the Air Force, GAO said in a 67-page report.

The Air Force is continuing to review GAO's recommendations, which are not binding but could carry heavy influence in Congress. A new tanker competition could take a year or longer to complete, depriving the Air Force of its top priority at a time of war. The 179-plane contract, awarded to Northrop on Feb. 29, is designed as the first of three phases to replace the Air Force's aging fleet of more than 500 KC-135 Stratotankers, which average nearly 50 years in service.

Gates "wants to make sure that there are no further delays to replacing this vitally important piece of equipment on which our warfighters depend every single day," said Pentagon spokesman Geoff Morrell, adding that Gates will be involved in any decisions about the contract.

Chicago-based Boeing challenged the tanker contract in a protest before GAO, which last week issued a three-page statement saying that the Air Force's selection process was flawed. It recommended that the Air Force conduct a new contest.

GAO's full report, released Wednesday after both companies were allowed to remove proprietary information, said the Air Force's selection of Northrop "was undermined by a num ber of prejudicial errors that call into question the Air Force's decision."

Los Angeles-based Northrop and its bidding partner, EADS North America, planned to assemble their KC-45 tankers in a $600 million factory to be constructed at Mobile's Brookley Field Industrial Complex. Those plans are on hold while the Air Force sorts out its options, but a military trade publication reported Wednesday that Mobile may yet win the project.

DefenseTech.org, a Web site that covers the military, said senior Pentagon and Air Force officials were ready to go ahead and award the work to Northrop. The online publication, citing unnamed sources, said Young, the Pentagon's chief weapons buyer, was drafting a letter to Congress defending the Air Force's selection.

"Their finding is that the full document is quite different from the summary," issued last week, DefenseTech.org reported, quoting an anonymous source. The source said Air Force leaders believe many of GAO's recommendations were "procedural" and could be resolved without rebidding the deal.

U.S. Sen. Patty Murray, D-Wash., a Boeing political supporter, said any suggestion that the Air Force move forward without addressing GAO's recommendations "is simply unbelievable." U.S. Rep. Norm Dicks, D-Wash., said that if the Air Force didn't rebid the contract, Congress would force it to.

Boeing planned to assemble its KC-767 tankers in Everett, Wash., and modify them for military use in Wichita, Kan. A delegation of Kansas politicians on Wednesday urged Gates to cancel the contract with Northrop, disqualify the company from future competition and hand the deal to Boeing.

"We believe the (Pentagon) has the authority to award the contract to Boeing based on their competitive proposal," the Kansas officials wrote in a letter dated Wednesday. The letter, signed by U.S. Sens. Pat Roberts and Sam Brownback and U.S. Rep. Todd Tiahrt, all Republicans, also warned Gates not to split the contract between the two bidders.

Alabama elected officials said only the Air Force — not GAO or Congress — was qualified to select the planes it flies.

"The Air Force will need to address the concerns of the report, but, in the end, it is critical that they be allowed to choose the tanker that best meets their needs and requirements," said U.S. Sen. Jeff Sessions, R-Mobile.

GAO's ruling "was not an indictment of the Northrop Grumman/EADS offering; it was merely a reflection on the apparently flawed Air Force acquisition process," said U.S. Sen. Richard Shelby, R-Tuscaloosa. "I am hopeful that after further review the Air Force will again determine that the KC-30 is the best solution for our armed forces."