The Air Force hasn’t said how much it overestimated the cost of Boeing’s air-refueling tanker or underestimated the cost of its Airbus competitor. But it could turn out to be a $100 billion mistake.
That’s how much the taxpayers could wind up paying if the Pentagon buys the wrong airplane.
Last February, when the Air Force devastated Boeing by awarding its $35 billion tanker contract to Airbus’ parent compnay, there was at least some reason to believe it had made the right call.
An earlier decision to give the contract to Boeing fell apart in 2003 amid a corruption scandal, and people in high places were demanding a squeaky-clean decision this time around.
As before, Boeing’s candidate was an adaptation of its commercial 767 airliner. But February’s winner was a military version of the Airbus A330 developed by the European Aeronautic Defence and Space Co. in partnership with the Northrop Grumman Corp.
The Air Force was making this decision under intense scrutiny. It presumably wanted to get it right and come up with the tanker that would best meet the military’s needs without breaking the bank.
Cost was of the essence. Money spent replacing the nation’s fleet of almost 600 tankers was money that couldn’t be spent on other defense priorities. And the Air Force concluded that the A330 would be a little cheaper in the long run.
Oops. Boeing now says – and Northrop has acknowledged – that the Air Force has conceded flubbing the cost estimates. As it turns out, the Boeing tanker would be cheaper to own and operate. We don’t know how much cheaper, and maybe it’s not a lot. But the mistake casts doubt on the Air Force’s impartiality in weighing the rival proposals.
The original cost ranking baffled some experts. Loren Thompson, an analyst at the Lexington Instsitute, noted that “the Airbus plane is 27 percent heavier than the Boeing plane, and burns over a ton more fuel per flight hour.
“With fuel prices headed for the upper stratosphere, how can both planes cost the same amount to build and operate over their lifetimes?”
Good question, and apparently the Air Force got the answer wrong. We hope the Government Accountability Office, which is about to conclude its review of the contract decision, is paying attention.
Critics have raised other questions – about the A330’s crew protection features and its inability to match the smaller 767’s operational versatility. Those questions must be pressed all the harder now that we know that the Air Force has gotten one fundamental calculation wrong.
The ultimate cost of replacing America’s Eisenhower-era tankers is likely to run around $100 billion. That’s an awful lot of money to blow on a mistake.
