Boeing wants to know why it didn
When the Air Force picked a plane to be its new aerial refueling tanker, apparently, size mattered.
But Boeing Co. didn’t think so.
And now the company is making that lack of information the centerpiece of its protest of the $40 billion tanker contract won last month by two of its biggest rivals.
Boeing on Tuesday officially asked government auditors to review the contract and the process that led the Air Force to give it to Northrop Grumman and Airbus parent European Aeronautic Defence and Space Co. (EADS).
It’s a step that will delay work on the tanker, known as the KC-45A, by months, and add fuel to an already roaring debate over awarding such a big military contract to a foreign-owned company.
Protesting is not something Boeing takes lightly, company executives said in a news teleconference Tuesday.
"We think we were not treated fairly," said Mark McGraw, vice president of tanker programs for Boeing’s St. Louis-based defense unit. "There were serious flaws in the process."
Chief among them, McGraw and others said, was a fundamental misunderstanding about what the Air Force wanted in a tanker.
Both planes, Boeing’s 767-based tanker and the larger Northrop/EADS A330 variant, met the Air Force’s stated requirements for fuel, cargo and people-carrying capacity, Boeing said, and there were to be no bonus points awarded for going beyond those requirements. Yet the Air Force has indicated that it picked the KC-30 because it offered "more."
"More passengers, more cargo, more fuel to offload," said Gen. Arthur Lichte, commander of Air Mobility Command, at a news conference last month announcing the decision. "More availability, more flexibility and more dependability."
Boeing was aware of the basic requirements, and said its 767 met them. It considered offering a bigger 777-based tanker, but chose not to because the 767 is more fuel-efficient, and therefore cheaper to fly, and Boeing didn’t think capacity was so important.
"If (the Air Force) wanted a bigger tanker, it would have been nice to be very clear that that was the key requirement," said Beverly Wyse, who oversees Boeing’s commercial 767 program.
The company has other objections, including concerns about late changes to the ways the two planes were measured that it says may have tipped the balance toward Northrop, and about the way the Air Force judged the overall costs of the competing planes payday advance lenders.
Throughout the process, Air Force officials say they’ve tried to run the most open, thorough competition possible, precisely to avoid this situation. And they’ve defended their choice against withering blasts from Boeing supporters in Washington.
On Tuesday, they said again that the Northrop/EADS plane provides the best value, and that weapons buyers kept in close contact with both bidders throughout.
"The Air Force followed a carefully structured process, designed to provide transparency, maintain integrity and promote fair competition," said Lt. Col. Jennifer Cassidy, in a statement.
Now that will be reviewed by the Government Accountability Office, which has 100 days to make a non-binding recommendation about the contract. While protests rarely overturn contract decisions, they do occasionally result in a re-bid. That’s what happened when Sikorsky and Lockheed Martin challenged Boeing’s $15 billion win of a contract to build search-and-rescue helicopters in 2006; that job, which still awaits a new decision, has now been delayed 16 months.
On this contract, Boeing says it would appreciate another shot, but it really hopes for more understanding.
"We’d love to get the decision overturned. But really we just want clarity in the process," McGraw said. "If there was another competition like this we wouldn’t really know how to go forward."
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