Lawmakers Call for Air Force to Reopen Tanker Competition

By Dana Hedgpeth
Washington Post Staff Writer
Friday, June 27, 2008

Congressional and military leaders said yesterday that they are continuing to investigate how the Air Force awarded a $40 billion aerial refueling tanker contract to Northrop Grumman and its European partner, leaving the deal's future on shaky ground.

A group of 50 congressional leaders, led by Rep. Rosa DeLauro (D-Conn.), is calling on the Air Force's acting secretary, Michael B. Donley, to redo the competition, saying in a letter that was expected to be sent today that "anything less than a re-opened competition . . . will only further call into question your service's acquisition process."

Another group of senators and congressional leaders, some of whom represent districts where Boeing has a large presence, introduced legislation yesterday that threatens to withhold funding for the tanker unless the Air Force reverses its decision or restarts the competition.

And Rep. Henry A. Waxman (D-Calif.), who oversees the House oversight committee, called for a July 15 hearing on the procurement.

Boeing, the biggest U.S. airplane manufacturer, filed a protest with the Government Accountability Office in March after losing the lucrative contract to Northrop and its partner, European Aeronautic Defence & Space. Boeing said it had been unfairly treated, and last week the GAO ruled in its favor.

At a Pentagon briefing yesterday, Defense Secretary Robert M. Gates said he was reviewing the findings. The Air Force has 60 days to respond.

"I take the GAO report very seriously," Gates said. "They clearly pointed out some areas where we were deficient. . . . We've clearly had problems with the tanker contract, and this time around is not the first time, obviously. I need to get a better feel for the GAO report and . . . the nature of the criticisms they have made."

Air Force acquisition officials have maintained that the process was fair and transparent. But in a scathing 67-page report, the GAO accused the Air Force of having "significant errors" in the way it ran the competition and said it "conducted misleading and unequal discussions with Boeing."

The troubled deal dates to 2003, when the Air Force agreed to lease tankers from Boeing. The deal was canceled after a top acquisition official said she favored Boeing while she was also negotiating a job with the company. She and a top Boeing official went to prison.

Meanwhile, Alabama Aircraft Industries filed a lawsuit in the U.S. Court of Federal Claims challenging the Air Force's selection of Boeing for a $1.1 billion contract to maintain the existing fleet of KC-135 refueling tankers, which Boeing built nearly 50 years ago.

Staff writer Josh White contributed to this report.

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