Air Force tanker competition set to reopen
WASHINGTON -- The Air Force is poised to reopen a troubled $35 billion contract competition for mid-flight refueling tankers between Boeing Co. and Northrop Grumman Corp.
"After eight years, we can finally get on with this program," Rep. John Murtha, D- Pa., said Thursday.
Murtha chairs the House Appropriations subcommittee on defense. He was one of several lawmakers briefed by Air Force Secretary Michael Donley and other Pentagon officials on the latest request for bids -- due out Friday -- on the tanker competition.
Washington Democrat Rep. Norm Dicks, a Boeing supporter, said the Air Force is seeking to reduce the number of requirements to replace its aging tankers to 373 from 800, in a bid to make the process more transparent.
The department also changed course on two other issues. It will select a winner based on "best value" and not price, and made the deal a fixed-price contract. The switch from a cost-plus pact means the contractor will be paid a negotiated amount regardless of extra expenses.
Dicks said the service's plan appeared to be "a much fairer approach."
A congressional aide said Pentagon officials were stressing to lawmakers that the latest competition is not a rerun of the last one.
Northrop and partner Airbus parent European Aeronautic Defense and Space Co. N.V., won the deal to replace 179 Eisenhower-era planes in February 2008. Boeing later successfully protested the award after congressional investigators found the Air Force failed to evaluate both proposals on the same merits.
The Pentagon still anticipates awarding a single contract next summer, according to lawmakers.
One area of concern to Dicks and Sen. Patty Murray, D-Wash., was the exclusion of language in the contract that would require the Air Force to consider the World Trade Organization's interim ruling earlier this month that European loans for Airbus were illegal subsidies. A separate ruling on a European Union counter-complaint against the U.S. is expected in about six months.
The tanker deal -- one of the largest in Pentagon history -- is the first of three contracts worth up to $100 billion to replace nearly 600 aircraft over the next 30 years.
Defense Secretary Robert Gates last week restored the Air Force's authority to select a new winner after stripping the service's ability to award a deal in the wake of the congressional investigators' report.