Gates punts tanker fight to next administration

Defense Secretary Robert Gates is canceling the Pentagon’s request for bids for the controversial mid-air refueling tanker program that set off a lobbying war between Boeing and Northrop Grumman.

In a news release that cited “mistakes and missteps” by the Defense Department, Gates said he was terminating competition for the $35 billion contract to give the next administration full flexibility to decide how to handle the process.

{mosads}“Over the past seven years the process has become enormously complex and emotional — in no small part because of mistakes and missteps along the way by the Department of Defense,” Gates said. “It is my judgment that in the time remaining to us, we can no longer complete a competition that would be viewed as fair and objective in this highly charged environment.”

The termination this year would allow for a “cooling off” period that would allow the next administration to craft a new acquisition strategy for the tanker, Gates said. He said the current fleet of refueling tankers could be maintained to satisfy Air Force missions for the near future.

Sen. Richard Shelby (R-Ala.), whose state would have benefited from Northop’s plans to build tankers there, immediately blasted the decision as political.

“It is unacceptable that the Department of Defense would abdicate its responsibility to our men and women in uniform,” Shelby said in a release. “This misguided decision clearly places business interests above the interests of the warfighter.”

Shelby said the approach advocated by Gates is “irresponsible, shortsighted and harmful to both the warfighter and the nation.”

The decision follows years of controversy surrounding the competition to win the valuable contract.

Most recently, Boeing threatened to quit the competition if the Pentagon did not offer the company more time to prepare its bid. Boeing argued a draft request for bids issued earlier this summer by the Pentagon favored Northrop Grumman and its partner, EADS North America. EADS is the European parent company of Boeing’s chief rival Airbus.

In February, the Air Force awarded the contract to replace the Air Force’s Eisenhower-era tankers to Northrop Grumman and EADS. That set off a massive lobbying and public relations campaign by Boeing — often critical of the Air Force — that culminated in its successful protest to the Government Accountability Office.

The GAO faulted the Air Force’s decision to award the contract to Northrop and EADS, which led the Pentagon to reopen the contract for bids.

Boeing’s backers argue that awarding the contract to Northrop Grumman and EADS would ship U.S. jobs overseas. Northrop’s supporters countered that their bid would create jobs in the U.S. Southeast, where the companies planned to build the tankers.

This story was updated at 10:07 a.m.