Capitol Hill May Face Single Bid From Boeing

It may bring smiles to Boeing supporters, but Northrop Grumman's potential withdrawal from an Air Force refueling tanker contact -- a widely-circulated story these past few weeks -- could force an abrupt halt to the entire process.

This, according to Frank Cevasco, a defense analyst and former Pentagon acquisitions official. Cevasco says a Northrop withdrawal would not necessarily give the deal to Boeing as the default bidder on one of the most lucrative and controversial military contacts in history.

"If Northrop really does decide not to compete, the Air Force could find its program stopped once again," said Cevasco. "There is far too much taxpayer money involved to award a sole-source contract to Boeing. In my view the Air Force is playing a dangerous game that could backfire once more."

With the aura of the Boeing ethics scandal three years ago still surrounding it, Boeing may have more hurdles to overcome. The original contract that Boeing was awarded in 2004 was killed amid revelations that Boeing hired key Air Force acquisitions officials, who later admitted giving the company preferential treatment before leaving the military.

A final call for bids to replace the KC-135 midair refueling tanker is expected shortly from the Air Force. Thus far the contract has only drawn interest from Boeing, and the international team of Northrop and the European Aeronautic Defence and Space Co., majority owner of Airbus.

The initial $40 billion USAF contract is for 179 planes... but that may be just the beginning, as the Air Force eventually wants to replace its entire 530-plane tanker fleet. Whichever company wins the initial bid wouldn't have a lock on more work... but it would have the upper hand, according to the Associated Press.

Boeing would build its 767-based planes (shown above) at its existing Everett, WA plant; the Northrop/EADS team would build a modified version of the Airbus A330 airliner (below) in Mobile, AL.

The Northrop/EADS team is threatening to withdraw, claiming the military's criteria favor Boeing... even as the Air Force completes its bidding requirements. If the specifications don't change to reflect the Northrop plane's additional cargo and fuel capacity, "then we feel we would not be competitive and we would not bid," said Northrop spokesman Randy Belote.

"It's truly a multi-role, multifaceted capability that we're offering, and it's unfortunate that it's not being given an opportunity to compete and to perhaps transform the way tankers are used in the future," Belote said.

Even without the tumultuous history, many lawmakers feel it would be a mistake to give Boeing the contract without competition.

"It would be a huge loss to our defense capability to have only one competitor for this aircraft," Sen. Jeff Sessions, R-AL, whose hometown of Mobile could see 1,000 new jobs if Northrop/EADS gets the project, told the AP. "There should be multiple bids so that the Air Force gets the best price, the taxpayer gets the best value, and the war fighter gets the most capable aircraft."

Senate Armed Services Committee members like Democratic Chairman Carl Levin of Michigan and Sen. John McCain, R-AZ, also insist that the proposal draw a true competition.

On the other hand, Washington Rep. Adam Smith, a member of the House Armed Services Committee, rejected any notion that the contract is tilted toward Boeing.

"If that's what the Air Force says they need, that's what the Air Force needs. This is about as clear and transparent a process as you could ask for," he said.

FMI: www.af.mil, www.northropgrumman.com, www.boeing.com