Congress Threatens To Pull Funding for Air Force Tankers
Thursday, March 6, 2008
Congressional leaders threatened yesterday to withhold funding for one of the U.S. military's biggest aircraft programs because the $40 billion contract went to a group that includes a European manufacturer.
Since Friday, when the Air Force awarded the initial part of a contract to replace 179 Air Force refueling tankers to the team of Northrop Grumman and European Aeronautic Defence and Space, congressional leaders have questioned why that bid was chosen over one by Boeing, the largest U.S. aircraft manufacturer. Critics have said that the Air Force is outsourcing its purchasing in a way that could threaten national security and have accused the service of not taking the creation of American jobs into account.
At a two-hour hearing of the House panel that controls defense spending, committee chairman John P. Murtha (D-Pa.), said: "There is the industrial base you have to consider. The political implications are important. . . . This committee funds this program. All this committee has to do is stop the money, and this program is not going forward."
After the hearing Murtha said, "This is not a done deal."
He called on Air Force officials to brief committee members in a closed-door session on the technical merits of their choice of Northrop and EADS -- the parent company of Airbus, Boeing's chief commercial rival -- after they brief the two competitors. Air Force officials are expected to brief Boeing officials Friday and Northrop officials on Monday.
Boeing, based in Chicago, built the fleet of KC-135 tankers in use for nearly 50 years and had been expected to win the deal. Four years ago, it was awarded a contract to lease tanker aircraft but the award was withdrawn after a procurement scandal involving officials from Boeing and the Air Force.
Murtha and other leaders said the choice of Northrop and EADS takes jobs away from Americans, especially in Wichita and Everett, Wash., where Boeing has major plants that produce the tanker line, at a time of economic uncertainty and a growing trade deficit.
"An American tanker should be built by an American company with American workers," said Rep. Todd Tiahrt (R-Kan.), whose congressional district is home to Boeing facilities.
Boeing has said it is likely to shut down its production line for 767 airliners, on which the company's tanker proposal was based, in the next few years because of declining commercial sales.
EADS, on the other hand, gains a major foothold in the U.S. military market and a leg up on winning future orders to replace the entire 500-plane tanker fleet, a deal that could be worth up to $100 billion over the next few decades.
Northrop, the third-biggest U.S. defense contractor, and EADS say their tanker isn't taking away American jobs. They say that while some large parts of the aircraft will be manufactured by in Europe -- much like other weapons systems or planes -- engines will be built in Ohio and North Carolina. Both companies will build new facilities in Mobile, Ala., where EADS will assemble the planes and Northrop will convert them into military tankers. The project will create roughly 1,500 jobs in Mobile; another 300 in Bridgeport, W.Va.; and up to 500 in Melbourne, Fla.
Sue Payton, assistant secretary of the Air Force for acquisition, said job creation was not a factor in the service's decision to pick the Northrop-EADS team, saying it was not part of federal acquisition regulations. She said her team followed a "carefully structured" procurement process designed to "provide transparency, maintain integrity and ensure fair competition."