GAO clears Air Force in tanker case

By Marjorie Censer
Capital Business Staff Writer
Thursday, October 7, 2010

The Government Accountability Office on Wednesday settled a controversy in the Air Force's relaunched aerial tanker competition, rejecting claims from a potential competitor that its proposal was wrongly eliminated.

In August, dark-horse competitor U.S. Aerospace, a California-based contractor, filed a protest with the GAO because the Air Force had rejected its submission for being late. The company's proposal called for the components to be built by Antonov, a Ukrainian firm, but assembled in the United States.

U.S. Aerospace alleged in its complaint that the Air Force had deliberately left its delivery person waiting just long enough to miss the proposal deadline.

The GAO rejected the claim that the Air Force had conspired to prevent the firm from submitting its proposal on time in a Sept. 16 ruling, but Wednesday's decision fully denied U.S. Aerospace's claim.

In a statement, Ralph O. White, managing associate general counsel for procurement law at the GAO, said the Air Force acted appropriately in rejecting U.S. Aerospace's proposal.

The GAO found that the proposal was received after the established closing time - as shown by e-mail and telephone records - and noted that the company's messenger did not seek prior approval to enter the base and hadn't gotten directions to the building where proposals were due.

In a statement, U.S. Aerospace said it was disappointed by the outcome but pleased that the GAO found no evidence of Air Force bias against working with international partners.

"Merely submitting our joint bid and participating in the process has created a sea change in how the global aerospace industry views globalization and working together with leading aircraft manufacturers around the world," company director Michael Goldberg said in the statement, adding that U.S. Aerospace will continue to bid on U.S. military projects.

Two companies - Boeing and European Aeronautic Defense & Space - remain in the $35 billion tanker competition, one of the Defense Department's largest acquisition programs.

The Air Force had planned to lease tankers from Boeing in 2003, but the deal ended the next year because of a procurement scandal that sent a Boeing executive and a Pentagon official to jail.

In 2008, the Air Force awarded the contract to Northrop Grumman, which had teamed with EADS's Airbus, but the decision was overturned after the GAO upheld a protest filed by Boeing.

The Pentagon relaunched the program last fall, but Northrop opted not to bid and EADS announced that it would compete on its own.

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