Air Force Tanker Woes
April 27, 2008
by: Elizabeth Wright

Government WasteWatch, Spring/Summer 2008

Two corporate monikers cause tempers to flare-up in Washington these days:  Boeing and Northrop Grumman. 

Members of Congress who traditionally line up by party affiliation are now crossing the aisle to help either scuttle or protect the Air Force’s February 29 decision to award Northrop Grumman the $35 billion contract to build the next generation of air refueling tankers.  The tankers are used to transfer fuel to other planes, such as a jet fighter, while flying.  Tankers are vital partners in any air operation because they can lengthen flight ranges for all kinds of aircraft.

The Air Force refueling tanker saga started with a provision added to the fiscal 2002 Defense Appropriations Act directing the Air Force to lease 100 Boeing 767’s that would be converted to fuel tankers.  At the time, former Sen. Phil Gramm (R-Texas) called it the worst pork-barrel handout he had seen in his 22 years on Capitol Hill.  Not only was it one of the worst examples of corporate welfare, this no-bid lease scheme eventually ballooned into a major scandal.  Eventually, the Air Force’s chief negotiator on the tanker contract and Boeing’s number-two corporate officer went to jail and Boeing was fined more than $600 million.

In the aftermath, the Air Force undertook a new, competitive bidding process and two companies, Boeing and Northrop Grumman, submitted proposals.  Just before the announcement of the contract winner in 2008, both sides were reported in the press to be satisfied that the process had been fair and transparent.  Sen. Patty Murray (D-Wash.), who represents a state where Boeing makes its planes, said on October 31, 2007, “I’m proud that the process for selecting a company to supply these tankers has been a truly open one.”  Sen. Pat Roberts (R-Kans.), from another state with a large Boeing presence said, “…I must commend the Air Force for their efforts in conducting an open and fair competition.  To date, I have been nothing but impressed with their obvious desire to provide the best aircraft to the American people.”

The day the Air Force awarded the contract to Northrop Grumman, the political environment abruptly changed in Washington, D.C.  Northrop Grumman’s prime subcontractor is the North American division of the European Aeronautic Defence and Space Company (EADS).  Suddenly, Being corporate spokespersons and the company’s supporters began accusing the Air Force of using unreliable foreign suppliers to build the tanker, expressing angst at how many jobs would be lost to workers overseas and arguing that national security was being compromised.  All of these arguments ignore the fact that Boeing’s planes contain foreign parts, including some manufactured in China and Japan, that the Northrop Grumman plane would be built in Alabama, and that security issues will be handled by the Air Force.
   
Boeing filed a protest with the Government Accountability Office (GAO), which is scheduled to report by June 19 on whether or not the acquisition process was properly handled.  Unfortunately, some members of Congress are trying to stop the contract in its tracks well before the GAO has a chance to fully review the process.  Rep. Norm Dicks (D-Wash.) stated, “We’re going to try to eliminate the funding,” according to The Wall Street Journal, and called the decision “one of the worst … in modern history.”  The Chicago Tribune reported that Rep. Todd Tiahrt (R-Kans.) said, “I don’t think the current contract can go forward.”

At an April 17 Boeing-organized rally on Capitol Hill, a pamphlet from Rep. Tiahrt’s office was distributed which outlined a strategy to use defense spending and authorization bills to overturn the award, probably by adding amendments or earmarks that would either cancel funding for the current contract; have the contract re-bid; or simply turn over the construction of the tanker to Boeing.  Because of Reps. Dicks’ and Tiahrt’s efforts to interfere with the procurement process before GAO issues it review, CAGW named them the April “Porkers of the Month.”

Undersecretary of Defense for Acquisition, Technology and Logistics John Young was quoted in an April 18 Seattle Post-Intelligencer article that actions by some House members to simply override the Air Force’s decision “would open up slippery slopes and dangerous precedents.”  He pointed out that if lawmakers are successful in obstructing funding for the tanker contract for political purposes, it would invite increased congressional meddling in future federal contracts.  He added, “Do we have the California delegation kill a program because the Georgia delegation won?  I don’t know where this stops.”

On April 21, while speaking at the Air War College in Maxwell, Alabama, Defense Secretary Robert Gates said, “All I can say is that I think it would be a real shame if the tankers were to get delayed.  We are long past due in terms of getting on with this program.”  Secretary Gates added, “Based on everything I’ve seen this was a fair process but we’ll wait and see what the GAO report says.”

Congress should follow Secretary Gate’s advice and oppose any amendments to reverse or stop the tanker contract before the GAO issues its report.  Taxpayers deserve nothing less.