My apologies if this has been diaried elsewhere on dKos, but I had not seen a comprehensive story on this issue in some time, and especially not since some very good news came down this week. Please recommend this story so that more people become aware of it.
Two days ago, the Government Accountability Office upheld Boeing's protest of a $35 billion Air Force tanker contract awarded to Northrop Grumman Corp. and Airbus parent European Aeronautic Defence and Space Co. ("EADS"), and recommended that the service hold a new competition.
To understand the significance of this, let me take you back almost four months (or, for those of you observing Obama Daylight Time, roughly the end of the 11-state winning streak that put him ahead for good in the Democratic race).
On February 29, 2008, Boeing, one of the world’s largest aerospace manufacturers, lost the huge tanker contract to build 179 air-to-air refueling tankers for the Air Force. Boeing had been supplying refueling tankers to the Air Force for nearly 50 years and was widely expected to win the deal.
Instead, the tanker award went to EADS/Northrop Grumman, otherwise known as Airbus, Boeing’s largest competitor worldwide.
The Air Force decision received scathing reactions from both policy makers and employees of Boeing, all of whom regarded Boeing’s bid to be superior in quality and cost.
Washington State’s congressional delegation, led by Senators Patty Murray and Maria Cantwell along with Representatives Norm Dicks, Rick Larsen, Jay Inslee, Adam Smith, Jim McDermott, and Dave Reichert (yes, even a GOP congressman), issued a rare joint statement blasting the decision and expressing outrage at the decision to tap European Airbus and its foreign workers to provide a tanker to our American military.
The reaction from Boeing employees was incredulous. They never thought they’d see the day that the U.S. Air Force handed over the tanker deal to Northrop Grumman. After hearing the announcement, Boeing workers lined the streets outside the machinist union along Airport Way to protest the decision.
Soon afterwards, Boeing filed a protest with the Government Accountability Office, which had the job of examining the actual facts and determining whether the bid process was fair. The gist of Boeing’s complaint was that the Air Force changed the rules mid-game, having been pressured by Sen. John McCain and others on Capitol Hill to artificially create a competition with Boeing by its European rival:
McCain pressured the Air Force to open the new tanker contest to competition and to disregard concern over European Union subsidies to Airbus, which are at the heart of a U.S. Trade Representative complaint against the EU before the World Trade Organization.
. . . .
In its filing, Boeing said that pressure from Capitol Hill and the Northrop Grumman/EADS team ultimately led the Air Force to pick the larger plane offered by Northrop and EADS even though it had originally asked for a medium-sized tanker.
Not only did McCain help put the pressure on the Air Force to change the rules more favorably to EADS/Northrop Grumman mid-stream, the co-chairman of his presidential campaign and other campaign lobbyists and advisers lobbied for the Europeans to win the tanker deal. McCain himself sent letters urging the Defense Department, in evaluating the tanker bids, not to consider the significance of a separate United States-Airbus trade dispute. In typical McCain fashion, he denied having anything to do with the contract despite these facts.
How did the influence of McCain’s lobbyists play out in the Air Force’s consideration of the bids?
The original Air Force request for proposal, in fact, did not call for a jumbo-sized tanker. As a result, Boeing had proposed a tanker based on its 767 commercial aircraft, when it would have used a larger 777 platform if it had known the Air Force wanted a larger plane. The Air Force changed its requirements to accommodate the bigger tanker that it hadn’t asked for, by assuming the need for maximum runway strength and ignoring estimates on tarmac sizes, for example. This made it appear that more air bases would be able to handle the larger tanker being built by Northrop Grumman.
Even in communications about whether the Air Force’s requirements were satisfied, Boeing appears to have been deliberately misled.
Boeing also said it was unfairly penalized for not providing adequate commercial cost and pricing data for the underlying 767 plane even though the Air Force had told Boeing officials that it was satisfied with the data it had supplied.
On Wednesday, the GAO sided with Boeing, making it almost certain that the request for proposals will be reopened and the Air Force will have to at the very least avoid its errors that skewed the competition toward the Europeans:
The Government Accountability Office said Wednesday that it found "a number of significant errors that could have affected the outcome of what was a close competition between Boeing and Northrop Grumman."
The Chairman of the Joint Chiefs of Staff, Admiral Mike Mullen, agrees.
In response to a question during a Thursday visit to McChord Air Force Base, Mullen said, "clearly the contract has to be renegotiated."
The Boeing Company has been building airplanes in my neck of the woods for decades, and I have friends and former schoolmates who have long been a part of its effort to build the best quality airplanes in the world. Boeing may be huge, but it is home grown and employs tens of thousands of American workers and still hugely influences the local economy of the Puget Sound area.
Whether or not you are a fan of Boeing, this incident should be considered an embarrassment to John McCain, the self-proclaimed "patriot" who, at least this time, chose to rig the game in favor of overseas competition. I hope this story continues to receive the attention it deserves.