WASHINGTON — Lawmakers from Washington to Alabama are raising serious concerns over a troubled $35 billion tanker competition between rivals Boeing Co. and Northrop Grumman Corp.
In separate letters, Sen. Richard Shelby, R-Ala., and Rep. Norman Dicks, D-Wash., representing competing interests and thousands of jobs in their districts, expressed concerns over the Air Force's draft request for bids to build 179 aerial refueling tankers that was issued last month.
Los Angeles-based Northrop and its partner, Airbus parent European Aeronautic Defence and Space Co. NV, are competing against Chicago-based Boeing for the third time to replace the aging refueling tankers.
Should Northrop and EADS win the lucrative deal, a new plant will be built in Mobile, Ala., while states like Florida and West Virginia could also stand to gain jobs. If Boeing lands the award, Washington, Kansas and other states would benefit from a boost in jobs.
Boeing supporter Dicks is questioning the Air Force's decision to cite a specific fuel offload rate in its bid request — which happens to be the same rate that Northrop has advertised as being able to offer — when the rate hadn't been specified in earlier drafts.
Dicks and other Washington state lawmakers also are concerned that the Air Force won't be required to consider the World Trade Organization's interim ruling last month which found that Airbus received illegal subsidies in the form of EU loans. Dicks thinks that shows a bias for rival Northrop's offering, according to his letter to Shay Assad, director of defense procurement, on Tuesday.
Dicks warned that unless the Pentagon fixed the draft it would risk the "same disastrous outcome that doomed the previous source selection."
The Pentagon has tried and failed twice to award a contract to replace its Eisenhower-era fleet of tankers that refuel military planes in flight. The last attempt in early 2008 was overturned on appeal and led Pentagon leaders to temporarily revoke the Air Force's authority to award a contract. The 2004 award to Boeing was undone by an ethics scandal that resulted in prison terms for a former company executive and a former high-ranking Air Force official.
For his part, Shelby, along with seven other Alabama lawmakers, sent a letter to Defense Secretary Robert Gates on Monday, claiming the Air Force's request was "fundamentally flawed."
Shelby, a Northrop supporter, said the draft omitted risk when evaluating whether either bidder can stay on schedule and keep its promise on price. According to Shelby, the Air Force also now isn't viewing as a priority whether the planes' design includes the capacity to carry extra passengers and the ability to perform medical evacuations. In previous competitions, the bigger size of Northrop's plane was a more highly valued attribute.
Reiterating the Pentagon's position, spokeswoman Cheryl Irwin said, "With this new draft request for proposals, we are very cognizant of the criticisms made and are taking very strong steps to try and correct those criticisms."
Northrop Grumman is expected to hold a news conference today to respond to the Air Force's draft request.
The tanker deal — one of the largest in Pentagon history — is the first of three contracts worth up to $100 billion to replace nearly 600 aircraft over the next 30 years.