Gates reopens competition for aerial refueling tanker contracts

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.

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.