Team Infidel
Forum Spin Doctor
Seattle Post-Intelligencer
March 22, 2008 By Eric Rosenberg, P-I Washington Bureau
WASHINGTON -- The Boeing Co.'s push to overturn a lucrative Air Force contract for aerial tankers awarded to an EADS consortium faces a high hurdle at the Government Accountability Office, the investigative branch of Congress, which is weighing Boeing's appeal.
The agency, which has until mid-June to rule on Boeing's complaint, doesn't overturn federal contracts for minor infractions by the government agency that awarded the contract in the first place.
Rather, the GAO looks for more fundamental mistakes. In the tanker case, that is likely to take the form of whether the Air Force gave European Aeronautic Defense and Space Co. and Northrop Grumman Corp. the contract on the basis of the original requirements it set forth in 2007, when it first solicited bids from aircraft manufacturers to build a new fleet of tankers.
When the GAO has upheld previous contractor protests, "it wasn't about i's that weren't dotted and t's not crossed," said Joshua Schwartz, a law professor and co-director of the Government Procurement Law Program at George Washington University.
The GAO acts only when there are major problems, he said. This places a substantial burden of proof on the losing bidder. On the tanker contract, "the Air Force would have to have screwed up, not on just a technicality but in some way that really had some potential to affect the outcome," Schwartz said in an interview.
Alan Chvotkin, a federal acquisition expert with a trade association that represents government contractors, put it this way: A federal agency "simply being wrong about something is not enough for GAO to recommend taking corrective action."
Instead, said Chvotkin, senior vice president at the Arlington, Va.-based Professional Services Council, the GAO "evaluates the agency's contract decision against the criteria the agency said it would evaluate" in picking the winning bid. The GAO checks "to ensure that the agency followed its own priorities."
Boeing has acknowledged the difficulty it faces in getting the GAO to overturn the contract with the EADS team.
"We know it's an uphill battle, no doubt," Mark McGraw, a Boeing vice president, said this week. "It would be very rare for the GAO or anybody to actually overturn a decision."
GAO statistics underscore the difficulty losing contractors face. The agency says 16 percent of protesters won in 2002, 17 percent in 2003, 21 percent in 2004, 23 percent in 2005 and 29 percent in 2006.
Last year, the number of upheld protests dipped to 27 percent.
Although most losing bidders don't win their appeal, "that's not because GAO is covering the posteriors of the executive branch agency, which did a procurement," said Schwartz. "The GAO is quite independent, quite competent and an honest broker."
One of the protests upheld by GAO shows just how fundamental the alleged infraction must be.
In 2006, the Air Force selected Boeing for another top-priority Air Force program, the $15 billion contract to build the Combat Search and Rescue-X helicopter. The losing bidders -- Sikorsky and Lockheed Martin -- protested the Boeing award and charged that the Air Force failed to apply uniform selection standards to all bidders.
The GAO agreed.
In its contract solicitation, the Air Force had told potential contractors to submit bids that included projected long-term maintenance costs.
But the GAO said the Air Force then erred by failing to take into account the projected lower maintenance costs proposed by Sikorsky and Lockheed Martin helicopters.
The Air Force, the GAO found, "departed from its stated evaluation approach." The GAO has directed the Air Force to re-evaluate the bids; another helicopter contract isn't likely to be awarded until later this year.
The Air Force last month rejected the Boeing bid to build the new midair refueling tankers and instead chose a team of Airbus parent EADS and Los Angeles-based Northrop Grumman. The initial program is valued at around $35 billion but could grow to $100 billion if the Air Force places additional orders.
Boeing's entry, the KC-767, was based on a version of its 767 commercial airliner, while the EADS and Northrop Grumman tanker was based on the larger Airbus A330 commercial airliner.
In its protest, Boeing accuses the Air Force of switching airplane size requirements in the middle of the bidding contest. Initially, the service sought bids for a medium-sized tanker but later selected a much larger aircraft, Boeing maintains.
"Boeing carefully tailored its proposal to match the Air Force's stated requirement and provide the plane the Air Force said it wanted -- an agile, efficient, yet highly capable medium-sized tanker," the company said in a summary of its protest, adding that this was the reason it offered a modified 767 for the tanker role.
"Had Boeing known the Air Force was going to give size and capacity such dispositive weight in the evaluation, it would have proposed its larger 777," the summary said.
Boeing maintains that the Air Force "repeatedly made fundamental but often unstated changes to the bid requirements and evaluation process" in an effort to keep the Airbus consortium in the competition.
The Airbus team maintains that it won fair and square with a superior aircraft and denies Boeing's charge that the Air Force stacked the deck in its favor.
"I'm a little bit shocked at the assertion," said Paul Meyer, Northrop Grumman manager of the tanker program.
The GAO rarely recommends that a federal agency redirect a contract award to another company. Typically, if the GAO upholds a protest by a losing bidder, it directs that the agency correct the mistake, reopen the bidding process and re-evaluate the competing bids.
The GAO, which has some 30 lawyers working on contractor protests, typically assigns one lawyer for each case. In order to reach a decision, the lawyer reviews reams of contract documentation supplied by the federal agency and often conducts hearings.
Technically, the GAO's recommendations on protests are advisory only to the federal agency. But it is rare for the agency to disregard the recommendations.
March 22, 2008 By Eric Rosenberg, P-I Washington Bureau
WASHINGTON -- The Boeing Co.'s push to overturn a lucrative Air Force contract for aerial tankers awarded to an EADS consortium faces a high hurdle at the Government Accountability Office, the investigative branch of Congress, which is weighing Boeing's appeal.
The agency, which has until mid-June to rule on Boeing's complaint, doesn't overturn federal contracts for minor infractions by the government agency that awarded the contract in the first place.
Rather, the GAO looks for more fundamental mistakes. In the tanker case, that is likely to take the form of whether the Air Force gave European Aeronautic Defense and Space Co. and Northrop Grumman Corp. the contract on the basis of the original requirements it set forth in 2007, when it first solicited bids from aircraft manufacturers to build a new fleet of tankers.
When the GAO has upheld previous contractor protests, "it wasn't about i's that weren't dotted and t's not crossed," said Joshua Schwartz, a law professor and co-director of the Government Procurement Law Program at George Washington University.
The GAO acts only when there are major problems, he said. This places a substantial burden of proof on the losing bidder. On the tanker contract, "the Air Force would have to have screwed up, not on just a technicality but in some way that really had some potential to affect the outcome," Schwartz said in an interview.
Alan Chvotkin, a federal acquisition expert with a trade association that represents government contractors, put it this way: A federal agency "simply being wrong about something is not enough for GAO to recommend taking corrective action."
Instead, said Chvotkin, senior vice president at the Arlington, Va.-based Professional Services Council, the GAO "evaluates the agency's contract decision against the criteria the agency said it would evaluate" in picking the winning bid. The GAO checks "to ensure that the agency followed its own priorities."
Boeing has acknowledged the difficulty it faces in getting the GAO to overturn the contract with the EADS team.
"We know it's an uphill battle, no doubt," Mark McGraw, a Boeing vice president, said this week. "It would be very rare for the GAO or anybody to actually overturn a decision."
GAO statistics underscore the difficulty losing contractors face. The agency says 16 percent of protesters won in 2002, 17 percent in 2003, 21 percent in 2004, 23 percent in 2005 and 29 percent in 2006.
Last year, the number of upheld protests dipped to 27 percent.
Although most losing bidders don't win their appeal, "that's not because GAO is covering the posteriors of the executive branch agency, which did a procurement," said Schwartz. "The GAO is quite independent, quite competent and an honest broker."
One of the protests upheld by GAO shows just how fundamental the alleged infraction must be.
In 2006, the Air Force selected Boeing for another top-priority Air Force program, the $15 billion contract to build the Combat Search and Rescue-X helicopter. The losing bidders -- Sikorsky and Lockheed Martin -- protested the Boeing award and charged that the Air Force failed to apply uniform selection standards to all bidders.
The GAO agreed.
In its contract solicitation, the Air Force had told potential contractors to submit bids that included projected long-term maintenance costs.
But the GAO said the Air Force then erred by failing to take into account the projected lower maintenance costs proposed by Sikorsky and Lockheed Martin helicopters.
The Air Force, the GAO found, "departed from its stated evaluation approach." The GAO has directed the Air Force to re-evaluate the bids; another helicopter contract isn't likely to be awarded until later this year.
The Air Force last month rejected the Boeing bid to build the new midair refueling tankers and instead chose a team of Airbus parent EADS and Los Angeles-based Northrop Grumman. The initial program is valued at around $35 billion but could grow to $100 billion if the Air Force places additional orders.
Boeing's entry, the KC-767, was based on a version of its 767 commercial airliner, while the EADS and Northrop Grumman tanker was based on the larger Airbus A330 commercial airliner.
In its protest, Boeing accuses the Air Force of switching airplane size requirements in the middle of the bidding contest. Initially, the service sought bids for a medium-sized tanker but later selected a much larger aircraft, Boeing maintains.
"Boeing carefully tailored its proposal to match the Air Force's stated requirement and provide the plane the Air Force said it wanted -- an agile, efficient, yet highly capable medium-sized tanker," the company said in a summary of its protest, adding that this was the reason it offered a modified 767 for the tanker role.
"Had Boeing known the Air Force was going to give size and capacity such dispositive weight in the evaluation, it would have proposed its larger 777," the summary said.
Boeing maintains that the Air Force "repeatedly made fundamental but often unstated changes to the bid requirements and evaluation process" in an effort to keep the Airbus consortium in the competition.
The Airbus team maintains that it won fair and square with a superior aircraft and denies Boeing's charge that the Air Force stacked the deck in its favor.
"I'm a little bit shocked at the assertion," said Paul Meyer, Northrop Grumman manager of the tanker program.
The GAO rarely recommends that a federal agency redirect a contract award to another company. Typically, if the GAO upholds a protest by a losing bidder, it directs that the agency correct the mistake, reopen the bidding process and re-evaluate the competing bids.
The GAO, which has some 30 lawyers working on contractor protests, typically assigns one lawyer for each case. In order to reach a decision, the lawyer reviews reams of contract documentation supplied by the federal agency and often conducts hearings.
Technically, the GAO's recommendations on protests are advisory only to the federal agency. But it is rare for the agency to disregard the recommendations.
