Recently, in a sweeping indictment of the Air Force’s decision to award an initial $40 billion contract to Northrop Grumman/EADS to build refueling tankers based on the Airbus A330, the General Accountability Office (GAO) upheld Boeing’s protest of the flawed award.
Incredibly, the GAO found that the Air Force failed to prove the Airbus tanker could even refuel all of the Air Force’s fleet, as required by the Request For Proposal (RFP). The disturbing GAO findings show the Air Force did not evaluate the tanker proposals in accordance with the original RFP, which stipulated a midsize refueling tanker to replace the KC-135. Extra credit then went to the mammoth Airbus tanker, even though the Airbus tanker burns 25 percent more fuel and is too large for many airfields. Additionally, the Airbus tanker failed to meet the important support requirement for “depot-level maintenance” within two years of the first tanker delivery. According to the GAO, the KC-767 has lower life-cycle costs than the Airbus tanker, making the Boeing tanker a better value for the taxpayer.
While the GAO’s findings of impropriety by the Air Force repudiate the false claims of the Airbus tanker’s alleged superiority, the GAO investigation was not charged with the responsibility of examining other critical issues directly related to the tanker contract. The GAO report did not evaluate the impact of awarding what will eventually be a $100 billion contract to a foreign competitor on our defense industrial base, or the fallout on our economy from the loss of well-paying jobs associated with the highly unionized domestic aerospace industry. Nor did the GAO take into consideration that European governments gave billions in illegal subsidies to EADS, which put Boeing at a competitive disadvantage and American jobs at risk.
The Air Force has announced it will re-bid the tanker-refueling contract, but it has been vague on the exact terms of the new proposal.
The House Appropriations Subcommittee on Defense has issued guidelines to the Department of Defense, which we believe will ensure a fair competition for the tanker contract. The guidelines require that the GAO recommendations be complied with, including adhering to the original RFP. Perhaps most importantly, the Appropriations Subcommittee on Defense now requires that the impact on the industrial base be included in evaluation of the tanker proposals.
Understanding how the use of our tax dollars can make America strong, both economically and militarily, is a sensible requirement that will help ensure the viability of our industrial base and, in this instance, the high-skill, high-wage jobs associated with the aerospace industry.
We call upon Congress and the administration to follow this essential guidance.