Air Force urges Senate OK of unfinished tanker lease deal

Air Force Secretary James Roche disclosed Wednesday that the military service has yet to complete negotiations with Boeing on a proposed lease of 100 commercial jets for use as aerial refueling tankers, but he nonetheless urged lawmakers to approve the deal during testimony before the Senate Commerce Committee.

Committee Chairman John McCain, R-Ariz., bristled after Roche testified that the Air Force continues to talk with Boeing to resolve two key issues: the frequency of government audits of the Boeing's per-plane profit cap, and certification that the Air Force is getting a better price than anyone else.

"You haven't even finished the negotiations, but you want the Senate Armed Services Committee to go ahead and approve [the lease], without you having completed two, quote, very important aspects of it?" asked McCain, also a senior member of the Armed Services Committee, which is slated to meet today to consider the lease of the Boeing 767s.

Analysts from the Congresional Budget Office, the General Accounting Office and the Congressional Research Service, who also testified during the hearing, agreed that the Senate Armed Services Committee-the only one of four committees of jurisdiction that has not yet approved the deal-should wait until negotiations are complete.

Roche said at the hearing that the Air Force made progress Wednesday in wrapping up the talks with Boeing.

In addition to the incomplete lease negotiations, McCain criticized Roche for failing to conduct a comprehensive analysis of tanker platform options and for neglecting to initiate a formal study of corrosion problems that plague the service's existing fleet of KC-135 tankers. Several committee members questioned the wisdom of leasing the aircraft at a higher cost rather than purchasing the planes outright.

During his testimony, Roche pressed the service's business case, stating that buying the planes would deliver only one tanker by 2009, while leasing the aircraft would deliver 60 planes by 2009.

But Air Force acquisition chief Marvin Sambur told CongressDaily Wednesday that if the lease proposal fails, the service will pursue a purchase of the 767 tankers.

"The decision is buy or lease the 767," Sambur said in a statement to CongressDaily. "If we cannot lease, we will go back to the normal procurement process."

Although the Commerce Committee has no direct jurisdiction over the deal, several lawmakers urged Roche to consider buying the aircraft up front, and offered possible legislative relief from cumbersome Pentagon acquisition policies.

Sen. Peter Fitzgerald, R-Ill., questioned restrictions in the fiscal 2002 Defense appropriations bill that authorized the Air Force to negotiate a lease with Boeing for the tankers.

"I noticed that the public law that authorized the Air Force to enter into a lease did not authorize you to enter into a purchase-it only gave you one option," Fitzgerald said. "If Congress were to give you the budget authority, and perhaps help you cut some of the red tape with the [Defense Department] procurement process, would you agree it would be preferable to buy these tankers and save the $6 billion for the taxpayers?"

Roche said if he could get the aircraft as quickly through a direct purchase as he would through a lease, then a purchase would be possible.

"If there were a way to do this, possibly, with a purchase-then certainly if I could get the airplanes more quickly, I'd feel I'd be fulfilling my duties to the secretary of Defense," Roche said.

Sen. Frank Lautenberg, D-N.J., noted that buying the planes would save the department nearly $6 billion, and suggested possible legislative relief to allow for purchase of the tankers.

"Are we really saying that if you want to get around the red tape, here's a way to do it?" Lautenberg asked. "Well, maybe we ought to look at the tape. I say figure out a way and some of us here would be happy to carry the burden and get a reauthorization or whatever else you need."

Earlier Wednesday, some members of the Senate Budget Committee indicated at a hearing that they also believed a purchase would be better policy than leasing.

Fitzgerald said that if the need to replace the KC-135s is so urgent, the Air Force should consider requesting emergency funds in an anticipated second fiscal 2003 supplemental appropriations bill.