Thursday, June 19, 2008

GAO Report Out - The Process Was Flawed

Kansas Rep.Todd Tiahrt has claimed all along that the Air Force's decision to award the air refueling tanker contract to EADS/Northrup was a "big mistake from the beginning." He's been very outspoken about the Air Force choosing the EADS/Northrop air refueling tanker over the Boeing tanker. Wednesday's decision by the GAO validates his and others' concerns (mine included) about Air Force decision-making processes.


The GAO's report (read the 3-page summary) is a "non-binding recommendation" and the Air Force now has 60 days to respond. Some believe the Air Force will take back the award to EADS/Northrup and award it to Boeing. However, most believe, given the serious errors in the process (outlined in the link above) that favored EADS and the fact that two top Air Force leaders have been asked to step down recently in light of questionable decision-making related to nuclear weapons, that the Air Force will rebid the contract.

This isn't the first time the Air Refueling Tanker has come up for bid. It was been bid before with Boeing as the recipient in 2004, only to have it overturned and re-bid. McCain (yes, John McCain, the republican nominee) was instrumental in blocking the tanker contract with Boeing in 2004 and pressed the Pentagon in 2006 to change the proposed bidding procedures that were opposed by EADS/Northrop. On hearing Wednesday's GAO ruling, McCain said it was "unfortunate for the taxpayers, but they (Air Force officials) need to go back and redo the contracting process and the rewarding of it and hopefully they will get it right." (rewarding???? ... shouldn't he have said, 're-awarding'?)

In 2006, McCain had urged the Defense Department to make sure the bidding proposals guaranteed competition between Boeing and Airbus. But, behind the scenes, the Loeffler Group, which is owned by former Texas Rep. Tom Loeffler (who, incidentally, served as McCain's national finance chairman until he resigned last month), actively lobbied in favor of EADS/Northrup.

In a campaign year, that involvement makes it ripe for political grandstanding. Almost immediately, the DNC called upon McCain to demand that the bidding be reopened. Karen Finney, DNC Communications Director stated, "After siding with his lobbyist friends in helping steer tens of thousands of manufacturing jobs overseas the last time around, Senator McCain has an opportunity to do the right thing now." And, in a statement released by the Obama campaign, he said, "This competition must be reopened to ensure a fair and transparent process.'' And, a press release on the DNC's site states:

"John McCain has spent months defending himself from charges that he weighed in on behalf of his lobbyist friends to steer a $35 billion Air Force tanker contract toward a European defense contractor. Despite the fact that seven of his top strategists and fundraisers lobbied for the company, Senator McCain insisted that he "had nothing to do with the contract, except to insist in writing, on several occasions, as this process went forward, that it be fair and open and transparent." In reality, Senator McCain intervened at key steps in the process, echoing the arguments of the EADS/Airbus consortium each time."

The GAO's decision brought out other comments as well:

Washington Rep. Norm Dicks: "I believe the Air Force should set aside the agreement it improperly reached with EADS/Northrop Grumman and we should proceed expeditiously to build the best aircraft -- the Boeing KC-767 -- here at home."

Kansas Senator Sam Brownback: "This contract should be overturned and awarded to Boeing. The GAO is not allowed to consider a number of other issues important in this procurement, including foreign subsidies, corruption, and domestic production and employment."

Washington Representative Norm Dicks: "I believe the Air Force should set aside the agreement it improperly reached with EADS/Northrop Grumman and we should proceed expeditiously to build the best aircraft -- the Boeing KC-767 -- here at home."

Analyst Loren Thompson of the Lexington Institute, an Arlington, Virginia-based policy research group: "The ruling also raises questions about procedures at the Air Force. The GAO has identified so many mistakes by the Air Force that it calls into question the credibility of their process for picking weapons systems. and they're basic things, like whether Boeing's cost estimates were correct or not."

It's obvious the Air Force has more problems than making decisions about tanker contracts. On June 5, Defense Secretary Robert Gates fired Michael Moseley, the Air Force Chief of Staff, and Air Force Secretary Michael Wynne for their 'poor performance' in handling nuclear weapons materials. [Bloomberg] As they approach their third re-bid for the tanker contract, the Air Force had better get their poop in a group. Through their own mishandling of business at hand, they're not only handicapping our troups in the field, but our Nation's security as a whole while at the same time they're needlessly wasting taxpayer's monies in the process. Maybe Defense Secretary Gates should consider terminating Sue Payton (Air Force Asst. Secretary for Acquisition) for incompetence as well. Maybe then we can finally hold an uncompromised bidding process and begin constructing replacement air refueling tankers ... on American soil ... with American companies.

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