Pentagon Reopens Bidding For Aerial Tankers And Refines Expectations

Team Infidel

Forum Spin Doctor
New York Times
August 7, 2008
Pg. C4


WASHINGTON (AP) — The Pentagon opened a second round of bidding Wednesday for a $35 billion Air Force tanker contract after an error-plagued first attempt that featured a bitter competition between the Northrop Grumman Corporation and the Boeing Company.
A revised draft request for proposals has been issued to build 179 aerial refueling tankers meant to replace the Air Force’s fleet that dates to the 1950s. The Pentagon plans to release the final request to both companies on Aug. 15. The new bids will be due Oct. 1 and a decision is expected this year.
Northrop won the original contract, in a partnership with the European Aeronautic Defense and Space Company, more widely known as EADS, the parent of Airbus, but Boeing filed a protest. A Government Accountability Office review later found “significant errors” in the Air Force’s decision, and the defense secretary, Robert M. Gates, reopened the bidding.
The new round will be limited to the eight issues where government auditors found problems with the initial bidding. Both companies have indicated their bids will be similar to their original designs.
A major focus will probably be some of the guidelines for the plane’s design. For example, Northrop’s tanker was larger than Boeing’s, and the G.A.O. concluded that the Air Force unfairly gave Northrop additional credit for that even though there were no size requirements.
Also, the government will give additional credit for exceeding the threshold for the amount of fuel that can be used for refilling aircraft.
The Pentagon acquisition chief, John Young, will lead the new contract award process, after Mr. Gates took control from the Air Force.
Jim McAleese, a military industry consultant in Virginia, said Mr. Young had indicated that he would scrutinize issues including how to rank the planes’ performance capabilities and the costs over the life of the plane.
“The good news for Boeing is that it is a genuine opportunity,” Mr. McAleese said.
The struggle between the two military contractors has been particularly acrimonious.
Boeing and its supporters on Capitol Hill, especially those from Washington State, where the company’s major airplane manufacturing base is located, have charged that the Northrop partnership with a European company will siphon jobs from the United States at a time when the economy is swooning. But Northrop executives say they plan to do much of the work at a new plant in Alabama that would provide up to 1,500 jobs.
 
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