Date for Air Force tanker deal more in flux

By Reuters
Posted Sep. 3, 2010 at 5:58 p.m.

The target date for the much-delayed award of a possible $50 billion U.S. Air Force refueling-plane deal just got murkier and potentially more politicized.

No longer is mid-November necessarily the moment of truth in the rematch pitting Chicago-based Boeing Co. against its European rival, Airbus parent EADS.
“The decision will be in the fall,” Lt. Col. Jack Miller, an Air Force spokesman, told Reuters Friday. “What I gave you is the latest, and corrects and clarifies any previous statements.”

“Fall” means potentially as late as Dec. 20, according to the calendar.

Lt. Gen. Mark Shackelford, the Air Force’s top uniformed acquisition officer, had said June 18 that the contract was expected to be awarded in a “mid-November time frame.” The Defense Department has told the bidders to be ready to start work by Nov. 12.

Miller said the winner could be announced before or after Nov. 12, a date he described as a planning construct for rival bids submitted by the July 9 deadline. At stake is an order for an initial 179 aircraft that could be worth $25 billion to $50 billion.

This round marks the third time the Air Force has sought to start replacing its Boeing-built KC-135 tanker aircraft that average about 50 years old. The purchase has long been listed as the Air Force’s top acquisition priority.

An initial effort, a lease-purchase with Boeing, collapsed in 2004 amid a scandal that sent the Air Force’s former second-ranking arms buyer and Boeing’s ex-chief financial officer to prison for conflict-of-interest violations.

The Pentagon in 2008 awarded a 179-plane deal to a team made up of Northrop Grumman Corp. and EADS, only to have it overturned on appeal from Boeing. The U.S. Government Accountability Office found the Air Force had made enough errors in judging the contest to have changed its outcome.

The results of the Nov. 2 U.S. mid-term elections could play into theĀ  latest round, analysts have said. Southern Republicans have rallied to the Airbus A330 derivative EADS has offered. Its final assembly would take place at a plant to be built in Mobile, Ala.

Boeing’s modified 767 on offer would be primarily built in Democratic districts in Washington state and finished in Kansas. It has wide backing from the Democrats who control Congress plus the Kansas delegation.

Republican gains in the voting could change control of the congressional committees and alter the fortunes of the rival bidders.

Richard Aboulafia of the Fairfax, Va.-based Teal Group aerospace consultancy, said the Air Force appeared to be seeking more “leeway” to look at the poll results before announcing the winner.

“Two things I would not bet against,” he said. “The first is a further delay. The other is politicization. These are the two givens that we’ve lived with throughout this program.”

Guy Hicks, a spokesman for EADS’ North American arm, said his company “remained focused on mid-November for an expected award.”

William Barksdale, a Boeing spokesman, said: “We have to be patient. This is their process, and we look forward to answering any more questions they may have about our bid.”

Sen. Patty Murray (D-Wash.), an outspoken Boeing advocate, reacted angrily in June when she thought the Pentagon was delaying the award.

“The truth is that the Pentagon’s plans to bend over backwards for Airbus will mean another delay at the expense of our men and women in uniform, American workers, and our economy,” she said in a June 21 statement sparked by Shackelford’s comments on a mid-November time frame. She could not be reached for further comment Friday.

Bidders may raise or lower their proposed prices in response to government requests for final offers under U.S. federal acquisition regulations.

Read more about the topics in this post: , ,
 

Companies in this article

Boeing

Read more about this company »

2 comments:

  1. Paul Jaeger Sep. 4, 2010 at 6:33 pm

    I do not understand our government, why in the hell they don’t play hard ball with the Europeans.
    Airbus gets all kinds of help from their respective governments and we have Congressmen battering
    Boeing aircraft, how about a little America First!

  2. Joe American Sep. 9, 2010 at 12:38 pm

    I don’t believe you people. We have these so called “AMERICAN” companies sending jobs overseas as quick as they can and now we have a “FOREIGN” company wanted to bring jobs to our shores and we shun them. Quite being brain washed by stupid politicians and start thinking for yourself.