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Mon, Mar 23, 2009

Split Contract Proposed To Settle Air Force Tanker Dispute

Idea Draws Strong Opposition From Pentagon, Splits Lawmakers

As a solution to the ongoing controversy about replacing the US' aerial tanker fleet, Rep. John Murtha (D-PA), the chairman of the House defense appropriations subcommittee, has proposed including a provision in a defense bill that would split production of new tankers between top bidders Boeing and Northrop Grumman-EADS, the Kansas City Star reports.

As ANN reported, the Air Force selected Northrop Grumman/EADS for the tanker project last year, but rival bidder Boeing protested the decision. Bidding was reopened after a Government Accountability Office found flaws with the process... but the selection of a contractor remains in limbo.

Hanging in the balance is the economic future of both plane manufacturers. Boeing has proposed modifying its 767 model if awarded the tanker contract. Northrop Grumman-EADS plans to use the Airbus A330 airframe. Boeing stands to lose 10,000 jobs between its Everett, WA and Wichita, KS plants if it loses the contract - which would at the same time represent a major victory in the defense market for Northrop-EADS.

Murtha said additional delays in replacing the current aging fleet of aerial refuelers are unacceptable, and the split contract would get twice as many new tankers in the air within the same time frame. Sen. Daniel Inouye (D-HI) and Rep. Neil Abercrombie, (D-HI) also have expressed support for a split buy.

Rep. Todd Tiahrt (R-KS), said that Murtha was wrong. "I think there is going to be a lot of pressure from labor," Dicks said. "With these tough economic times, we shouldn't be building planes in Toulouse."

At a press conference last week, Defense Secretary Robert Gates said the split contract idea is a mistake that would end up costing taxpayers billions. "I think it's bad public policy and I think it's bad acquisition policy," Gates said.

Retired Air Force Maj. Gen. Burt Moore, former deputy chief of staff for operations and Air Force legislative liaison, said a split contract doesn't make much sense. "Why would you do a split buy, which means you get one plane that you want and another plane which is not exactly what you want?" Moore asked.

Defense analyst Loren Thompson of Arlington, VA's Lexington Institute said that in the short term, a split contract would cost taxpayers more because the Air Force would be buying twice as many planes over the same time period; in the long term, however, it might end up saving money, with the benefit of replacing the old fleet roughly twice as fast. "It's a good idea if you can afford it," Thompson said.

FMI: www.dod.mil, www.boeing.com/ids, www.northropgrumman.com

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