Boeing’s supporters have new worries on tanker

Boeing’s congressional supporters already have concerns with the Pentagon’s new bidding process for a contract to build aerial refueling tankers.

The Pentagon on Wednesday issued its draft request for new bids on the $35 billion, which has fueled a lobbying and public relations war between Boeing and a team of Northrop Grumman and EADS North America, the parent company of Airbus.

{mosads}“While it will take time to analyze this document, there are several issues that already raise red flags,” said Sen. Patty Murray (D-Wash.), a staunch Boeing supporter.

Northrop Grumman initially won the contract in February but Boeing successfully protested it with the Government Accountability Office. That led the Pentagon to take over the competition from the Air Force.

The new draft request amends the Air Force’s initial request for proposals to heed GAO’s concerns. The Pentagon said it had changed the guidelines of the competition to give Boeing and Northrop Grumman “a clear and unambiguous understanding" of how their revised bids would be judged.

Shay Assad, the director of defense procurement and acquisition policy, told reporters on Wednesday that companies would receive “positive consideration” for offering tankers that could provide fuel above the military’s requirements.

That could mean that a larger plane with the capacity to carry more fuel would be viewed favorably, which might hurt Boeing. Northrop Grumman and EADS, the parent company of Airbus, have offered the A330 in their bid, which is bigger than Boeing’s 767.

But the Pentagon also said it would measure the Air Force’s cost of owning and operating the new tankers over 40 years, which is considered the expected service life of the new aircraft. In the previous competition the Air Force only looked at 25 years of service life. This change could favor Boeing, as its plane uses less fuel and could cost the Air Force less over the longer period of time.

Murray took aim at the Pentagon for not specifying how much credit it would give to a plane that can carry more fuel.

“For example, the draft RFP and Pentagon officials have said that the Pentagon is going to give extra credit to fuel offload but has not specified how much,” she said.

She also criticized how the Pentagon would evaluate the cost of operating the planes over their lifetime.

Murray also said condensed timeline the contractors have to submit their new bids “is simply unrealistic.”

The companies are expected to turn in their comments on the draft by Sunday afternoon, an industry source said. Face-to-face meetings between company representatives and Pentagon officials to discuss the draft will start on Tuesday.

The actual request for proposals will be out Oct. 1 and the Pentagon will pick a winner by New Year’s Eve, said Assad.

Boeing officials said they need time to study the draft request and will not offer any details about the company’s next move until they see the final request for proposals.

It’s not clear yet whether Boeing would decide to offer the bigger 777 to satisfy the Pentagon’s criteria.

Once the Pentagon’s formal bidding request is released, Boeing could decide to file a protest with the GAO by arguing the Pentagon did not fully satisfy the concerns of GAO or Boeing during the discussion period. That move could prompt an even more intense political war.

In a statement, Northrop applauded the “speedy revised acquisition process.”  

“We are reviewing the draft RFP with an eye toward ensuring that it addresses the issues raised by the GAO in a way that facilitates a fair and non-political evaluation of the competing bids,” the company said in a statement.