A Pentagon advisory panel has concluded that the Air Force's aging fleet of refueling tankers is not in need of immediate modernization, dealing a setback to Boeing Co.'s controversial plan to sell and lease the planes to the military.
"There is no compelling material or financial reason to initiate a replacement program" before studying alternatives and how the military will use the planes in the future, according to a summary, provided to some in Congress yesterday, of the Defense Science Board report. The full report has not been released.
The report is considered a critical indicator of the future of a $23.5 billion Boeing proposal to lease and sell the tankers to the Air Force. Its conclusions suggest that Boeing faces not only a delay in a possible sale but also the likelihood of fresh competition for the contract.
Defense Secretary Donald H. Rumsfeld suspended negotiations on the program earlier this year and has said he would rely partly on the report in deciding whether to move forward with the plan.
The suspension came after Boeing admitted that it had improperly recruited a senior Air Force procurement official involved in the negotiations on the contract. The company fired its chief financial officer, Michael M. Sears, and the Air Force-official-turned-executive, Darleen A. Druyun. Chief executive Philip M. Condit resigned shortly afterward. Druyun has since pleaded guilty to conspiracy.
"We look forward to the opportunity to review the actual report," said Boeing spokesman Doug Kennett. "We stand ready to assist the U.S. Air Force with its requirements. We firmly believe that the 767 is the best solution to our nation's urgent tanker needs."
The report challenged the Air Force's contention that it needed the planes quickly because of corrosion on the 40-year-old fleet. But the board found that the Air Force has a "robust" corrosion control program and has reduced maintenance time.
"Consensus view on corrosion was that it is manageable," the report said. At the current rate of use, the airframes are capable of flying until 2040, according to the summary.
Even if the Air Force were to act now, it has several options besides the Boeing lease-and-purchase program, the report summary said. Among those options: installing new engines in some of the existing planes and converting retired commercial aircraft into tankers.
"The report independently confirms that the Air Force and Boeing are crying wolf over the corrosion problems in the fleet to create an emergency that never existed," said Keith Ashdown, vice president of policy for Taxpayers for Common Sense, a longtime critic.
An Air Force spokeswoman said the agency had not seen the report. "The Air Force fully supports Secretary Rumsfeld's approach. We share the same objective -- good stewardship of taxpayer dollars while beginning a tanker recapitalization effort," Maj. Cheryl Law said in a statement.
The Pentagon also has asked for a report from the National Defense University examining the procurement process used to negotiate the contract and for a Pentagon general counsel study of the rules governing senior executives who leave and take jobs at defense contractors. Both were scheduled to be completed this month.