WASHINGTON – The Air Force launched a new competition Wednesday for a $35 billion contract to start replacing the nation’s aged fleet of aerial tankers, but whether Northrop Grumman and its European partner will follow through on a threat not to bid against Boeing was unclear.
Apparently there were few major changes from an earlier version of the “request for proposals” which had drawn sharp criticism from the Northrop Grumman-European Aeronautic Defense and Space Co. team and its supporters on Capitol Hill.
Northrop officials had said unless significant changes were made, it wouldn’t bid. If it doesn’t bid, the Air Force could award a sole source contract to Boeing.
“What today’s release means is they most likely will not bid,” said Loren Thompson, a defense analyst for the Lexington Institute, a national security think tank.
Northrop-EADS officials offered no indication what they were planning.
“Northrop Grumman will analyze the request for proposals and defer further public comment until its review of the document has been completed,” said Randy Belote, a company spokesman.
Pentagon officials said they were “playing it right down the middle” and were satisfied the competition wouldn’t favor either side.
Deputy Defense Secretary William Lynn said the focus was on a competition with multiple bidders.
“Obviously Northrop Grumman and its European partner have a choice to make,” said Lynn. “We think it is in their interest to bid.”
Boeing had little to say, except that it was reviewing the voluminous document.
On Capitol Hill, Boeing supporters were satisfied with the rules for the competition.
“It is fair and balanced,” said Sen. Patty Murray, D-Wash., following a briefing.
Northrop-EADS backers were not hopeful.
“They didn’t calm my concerns,” said Rep. Mike Rogers, R-Ala.
The bids are due in 75 days and the Air Force plans on awarding the contract in mid-September. Either side could challenge the provisions of the request for bids, but Air Force officials said such an appeal wouldn’t delay the competition.
While the initial contract is for 179 new tankers, the deal could eventually be worth $100 billion as the Air Force replaces its fleet of about 600 Cold War-era tankers. It could be one of the largest Pentagon purchases ever.
So far, the competition has been marked by a major Pentagon procurement scandal, political intrigue and fueled by an intense rivalry between two of the world’s major aerospace companies – Boeing and Airbus. EADS is the parent company of Airbus.
Boeing is expected to offer a tanker based on a 767 airframe, which are built at its Everett plant and modified for military use at company facilities in Wichita, Kan. At stake are about 9,000 jobs in Washington state and 1,000 or so in Kansas.
Sen. Maria Cantwell, D-Wash., said she has received assurances from top Boeing officials that the 767s will continue to be built in Everett and not at a new plant planned in Columbia, S.C.
Northrop-EADS will use an Airbus A-330 airframe. Their initial tankers would be built at the Airbus factory in Toulouse, France. They have promised to build a new facility in Mobile, Ala., but several years after announcing it, have yet to begin construction.
At a briefing for reporters, Pentagon and Air Force officials said the request for bids included 372 minimum requirements. Since the draft was released late last year, there have been 230 mostly technical changes.
The major change, which both Boeing and Northrop-EADS requested, will allow inflation to eventually be factored into the fixed-price contract.
Lynn again ruled out the possibility of splitting the tanker buy between Boeing and Northrop-EADS.
“We have evaluated it and think it will cost the taxpayers more,” he said.
Northrop-EADS had complained the earlier version of the request for bids favored the smaller Boeing 767, even though their plane could carry more fuel, cargo and passengers.
Boeing countered their medium-sized tanker was what the Air Force originally requested and the current KC-10 tanker was big enough to handle any additional requirements.
Thompson said while the Northrop-EADS tanker can carry more fuel and fly farther, the Boeing tanker burns less gas and can land more places without requiring extensive construction on runways, hangars and ramp space.
Lawmakers were briefed on the competition and the split between Boeing supporters and Northrop-EADS backers was obvious.
“It seems the draft request for proposals and this one are pretty similar,” Cantwell told reporters.
Rep. Rick Larsen, D-Lake Stevens, whose district includes Boeing’s Everett plant, said he hoped the request for bids would lead to an “equitable and open tanker competition and ensure mistakes of the past are not repeated.”
Gov. Chris Gregoire said she was “confident that Boeing, with its experienced work force and capacity to build the tanker immediately, will compete effectively and ultimately, win the order.”
Alabama lawmakers were disappointed the request for bids hadn’t been changed and still held out hope of a split buy.
“I am not optimistic,” said Sen. Jeff Sessions, R-Ala.
Rogers said he would continue to lobby for a split buy and took a slap at Rep. Norm Dicks, D-Belfair, who is about to be appointed chairman of the House defense appropriations subcommittee.
“I think politics has so polluted this process and with Rep. Dicks taking over the subcommittee it has gotten worse,” Rogers said.
Les Blumenthal: 202-383-0008
lblumenthal@mcclatchydc.com
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