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New Administration To Decide Tanker

Defense Secretary Robert Gates has canceled the Pentagon’s competition for a new Air Force aerial refueling tanker, punting to the next administration to make the call – Boeing or Northrop Grumman and the European Aeronautic Defence and Space Co.?

“Rather than hand the next administration an incomplete and possibly contested process, Secretary Gates decided that the best course of action is to provide the next administration with full flexibility regarding the requirements, evaluation criteria and the appropriate allocation of defense budget to this mission,” the Pentagon said in a statement Wednesday.

Last February, Northrop Grumman and its partner, the European Aeronautic Defence and Space Co., won a contract worth up to $35 billion to make new tankers, but its rival Boeing protested the decision.

The Government Accountability Office upheld Boeing’s protest, kicking off a new contracting process by the Pentagon, which was eager to award a new contract by the end of the year.

The Pentagon issued draft bid specifications in response to recommendations by the GAO. But Boeing indicated the Pentagon wanted a larger plane than the KC-767 it offered for the first competition.

The Pentagon was expected to release final bid specifications by mid-August. But before they were released, Boeing threatened to withdraw from the competition if the Pentagon did not allow the company six months to respond to the changes in the specifications.

Last week, the Air Force’s Gen. Arthur Lichte, the commander of the tanker fleet, pressed for a quick decision, saying the current fleet of tankers is aging. And Northrop Grumman pointed to those comments in its response to Gates’ decision, saying in a statement: “With this delay, it is conceivable that our warfighters will be forced to fly tankers as old as 80 years of age.”

Boeing, which was poised to pull out of the competition and force the Pentagon into the politically tenuous position of a sole-source award to Northrop and EADS, said it welcomed the decision, “and believes that it will best serve the warfighter in allowing the appropriate time for this important and complex procurement to be conducted in a thorough and open competition.”

But Democratic Sen. Patty Murray of Washington state, where Boeing would make tankers, said that the Pentagon had assured her “the current fleet of KC-135s is capable of doing the job for as long as we’re going to need them.”

The cancelation, she said, was “a reality check on a procurement process that got very complicated and a little muddled.”

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