Boeing Gets Another Chance at Tanker Deal

August 06, 2008

By Rebecca Gannon

(WICHITA, Kan.)

The changes are made, the details are in. Boeing gets another chance to win the $35 billion dollar tanker deal.

The Pentagon reopened bidding Wednesday afternoon with a new tanker request -- and new qualifications. It would build 179 new aerial refueling tankers meant to replace the current fleet that date back to the 1950's.

This new request for proposals is different than the last, the one Boeing argued and the Government Accountability Office agreed, unfairly favored Northrop Grumman.

In a news conference Wednesday afternoon, the Pentagon made it clear the Air Force is taking the GAO's eight recommendations seriously. "The changes that we've made have been focused on being responsive to the GAO rulings and findings," said Director of Procurement Shay Assad.

There are 98 pages of amendments and clarifications to the original proposal. The refueling tankers will now be expected to last 40 years instead of 25, and that plays into the rising cost of fuel over 40 years as well.

Assad said the Department of Defense will also give extra credit to bids that exceed requirements. The Pentagon uses the example that it would give more credit for an aircraft's ability to carry more fuel than required.

Kansas Congressman Todd Tiahrt spoke with Eyewitness News hours after the press conference. The Republican's been a strong advocate of Boeing and a supporter of making sure the guidelines were fair to both bidding companies.

"There's still a lot of gray area, a lot to be considered. But we're in a lot better position right now than we were a couple of months ago. We went from a zero chance of winning to at least a 50-50."

The Pentagon is not ruling out the possibility of protests over this new, modified, Request for Proposals. Boeing protested the last contract award. Said Assad, "We always have to be prepared to deal with a protest 16."

Currently, Northrop Grumman, which won the last contract, is on a stop work order. That order will be lifted if Northrop and Airbus win the new bid.

In a statement Boeing said, "Our team is focused on identifying and understanding any changes that may have been made to the original requirements and evaluation criteria."

If it goes to Boeing, it could create 4,000 Kansas jobs, and as many as 500 in Wichita. The road to get here has been rough for Boeing.

In late February, the Air Force announced Northrop Grumman won the tanker deal. In March, Boeing filed a protest with the government accountability office.

From there, the GAO conducted a five day hearing, conducted interviews, and read through volumes of text from the Air Force, Northrop, and Boeing. In June the GAO told the Air Force it made a mistake. The Pentagon then decided to reopen bidding on the contract.

The new bids are due October 1st, and a decision is expected by the first week of January.

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