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Gates reopens competition for aerial refueling tanker contracts

By Megan Scully CongressDaily July 9, 2008

Defense Secretary Robert Gates Wednesday announced he is reopening competition for a fleet of Air Force aerial refueling tankers and placing his chief acquisition official in charge of overseeing the effort.

In his announcement, three weeks after a 100-day Government Accountability Office review uncovered several significant errors in the Air Force's selection process for the $35 billion contract, Gates said the competition would be limited in scope in hopes of awarding a new pact by the end of the year.

The competition will be focused mainly on eight major issues raised by GAO, which responded to losing bidder Boeing Co.'s protest by recommending the contract be recompeted.

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GAO said Air Force mistakes might have swayed the contract toward a team from Northrop Grumman Corp. and the European consortium EADS, maker of Airbus.

"I'm concerned that the contract cannot be awarded at present because of significant issues pointed out" by GAO, Gates said at the Pentagon.

Gates said his decision "does not represent a return to the first step of a process" that has lasted years. He said he hoped the new process would be transparent enough to satisfy the bidders that the process was fair. He emphasized the pressing need to field new refueling tankers and expressed hope the contract award would not trigger another protest.

"There are few procurement programs in the department that are as time-critical," he said. The Pentagon will submit a draft request for proposals in the next four weeks, said Pentagon acquisition chief John Young. He said few adjustments will be made in the new RFP because "we have a valid requirements document."

"This is the best of all options," said Sen. Richard Shelby, R-Ala., who asserted in a statement that "of Boeing's 111 complaints," GAO found only "minor procedural flaws." Shelby, a staunch supporter of the Northrop Grumman/EADS team, which plans to assemble the planes in Alabama, added: "It is vitally important that members of Congress support this expeditious path forward that not only satisfies the recommendations offered by GAO, but also ensures that the Air Force's urgent and compelling need to field a tanker is met as quickly as possible."

House Armed Services Committee ranking member Duncan Hunter, R-Calif., hoped the new competition would allow Boeing to offer its larger 777 aircraft against the jumbo Airbus A330 the Air Force has preferred. "Due to its superior range and fuel carriage capacity, the Boeing 777 should be considered because it would provide increased military capability to our troops," he said.

Gates' decision to make Young the so-called source selection authority underscores his frustrations with the Air Force. Last month, Gates fired the services' top military and civilian leaders over the service's handling of its nuclear arsenal. Gates opted against holding any Air Force acquisition officials accountable for the tanker mess.

Acting Air Force Secretary Michael Donley said woes over the tanker contract are not indicative that the service's acquisition processes are fatally flawed. Putting Young in charge of the competition is "an appropriate and necessary step to ensure congressional and public confidence" in the program.

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COMMENTS

  • GAO found NG's proposal to be non-responsive to a solicitation mandatory requirement, and consequently INELIGIBLE as a basis for award. Boeing could have received one then. Mark Werfel Posted June 27, 2009 10:28 PM
  • I can't wait to see what happens if Northrop wins the second round, as well. There's going to be egg on the face of a lot of people. If Northrop wins, Gates and his band of acquisition folks should be made to pay for all the funds wasted on this goat roping. Finance Guy Posted July 14, 2008 8:06 AM
  • The ball game has changed slightly but more than enough to prevent an award at the end of this year ... but possibly before 2009 ends. There will be proposal revisions and the new submittals should be even better than the previously inputs - both companies now know what the AF has decided it really wants, and they have greater insight into how it will be evaluated. Under the best of circumstances the minimum delay in contract award could have been contained to one year - 60 days for the AF to understand what troubled GAO and to restructure their evaluation team and 90 days to get a revised RFP to the contractors; 120 days for them to submit proposal revisions and another 90 days for the AF selection process. Its tight, everybody involved has been through it, and sure, it doesn’t change all that much but the visibility associated with the selection will almost certainly preclude that happening. For Northrop Grumman it should be a relatively easy with the cost of most tasks merely slipping out at least one year, and an opportunity to rework some areas where they came up short. Their proposal might be more like submitting a BAFO. Boeing would seem to be at a greater disadvantage since industry suspects they will probably propose a model 777 configuration to be more competitive with the A-330 capabilities that the AF liked - cargo capacity? Their 777s are also a mature airframe in commercial production and Boeing will have an extensive data base to project off... and many tasks must be similar similar to their proposal to militarize a 767 aircraft. There is no reason to drag out this competition to allow Boeing to bid a different airframe - they may even have started on a 777 proposal effort when they elected to protest the Northrop Grumman selection. This will be Boeing's third shot at a formal proposal for the KC-135 replacement so there shouldn't be any reason to not put a full court press on both contractors and get the tanker replacement aircraft under contract. A lot of valuable work has been performed by all parties and the military can't let this procurement get tied up in endless appeals - like the A-12 program. The revisions made by the AF should be fully justified to DoD since it appeared the AF was trying to solve its C-17 problems with the Tanker procurement. Not a bad idea, but you gotta let both parties know this. Frank Wood Posted July 10, 2008 5:40 PM
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