In Europe, governments are crying foul — or, more specifically, protectionism — now that Boeing has emerged as the sole contender for the Pentagon's disputed $35 billion contract for a new generation of flying gas stations.
This outcome isn't passing the smell test in Paris, London, Brussels or Berlin. Two years ago, European Aeronautic Defence and Space Co., with its U.S. partner, Northrop Grumman, won the same aerial-refueling tanker contract, only to see it thrown out on technicalities and the bid request rewritten to favor Boeing's smaller, older, cheaper aircraft.
While the Europeans have good reason to complain about the lack of a level airfield, it is the American taxpayers who should be truly outraged by Boeing's sweetheart deal. After all, they are the ones who are going to have to pay for it.
Northrop said it first, when it withdrew from the latest round of bidding last week, arguing that the Pentagon's revised specifications had robbed it of "any competitive opportunity."
This isn't just an issue for Alabama, where EADS' Airbus division and Northrop were due to build side-by-side facilities in Mobile, employing 1,500 people locally. Indirectly, the joint project was supposed to employ 48,000 people in the United States, where 60 percent of the content was to originate, and thousands in Europe as well.
Of course, Boeing also made big promises: A study it financed said its program would produce employment for 70,000 Americans. But this isn't even just about jobs: The Pentagon is prohibited from considering local employment when making its procurement decisions.
It's about competition — both within the United States, and among U.S. allies. Had the United States allowed Airbus a major foothold in its domestic defense market, it would have set an example for an open and fair competition in an industry that has traditionally favored local contractors.
However, opening markets isn't a top priority in Washington, D.C., these days — not in an environment where U.S. congressmen worry about being seen as supporting foreign companies, even when they create U.S. jobs.
If competition is needed anywhere, it is in major defense procurement programs, which are notorious for producing political scandals and cost overruns, sometimes together. The Pentagon's first $23 billion contract to lease — not buy — refueling tankers led to jail terms for a Boeing official and an Air Force acquisition officer on conflict-of-interest charges.
According to an industry rule of thumb, single-source contracts can result in as much as a 20 percent increase in cost. If Boeing's bid for the refueling tankers remains uncontested, it will become the largest sole-source contract in recent Pentagon history.
It's good to hear Defense Secretary Robert Gates say he's going to keep his pencils sharpened when it comes to negotiating the contract with Boeing.
His boss, President Obama, probably had more than that in mind when, in March 2009, he ordered a dramatic reduction in the use of no-bid government contracts, saying the days of giving defense contractors a blank check were over.
A lot has changed in one year.