Wednesday, June 18, 2008

GAO Sustains Boeing Protest: Just one more Stop on a Long Road

The Air Force continues to get knocked around like a ping pong ball over the award of its tanker replacement contract to Northrop Grumman / European Aeronautic Defence and Space Company (NG/EADS). The GAO has sustained the Boeing Company’s protest and has given the Air Force 60 days to respond to the GAO’s recommendations. The GAO’s sustainment of Boeings protest should not be seen as a “reversal” of the tanker deal as the LA Times Headline reported on-line just a few minutes ago. It is, however, a recommendation by the GAO that the Air Force reopen discussions with Boeing and NG/EADS to obtain and evaluate revised proposals and make a new decision concerning the contract award. This should not be confused with the GAO telling the Air Force to award the contract to Boeing. Instead, it is the GAO telling the Air Force to go back and make a fresh decision. Only this time, the GAO wants the Air Force, among other things, to look much closer at the evaluation criteria identified in the solicitation, engage in equal discussions with both Boeing and NG/EADS, determine which competitor best can plan and support the Air Force to achieve initial organic depot-level maintenance within two years of delivery, consider military construction costs, and precisely estimate non-recurring engineering costs.

The GAO decision will add to the momentum generated by defense appropriators on the House Appropriations Committee for Defense (HAC-D) and by Senators Murray and Cantwell of Washington. While supporters of both NG/EADS and Boeing will voice their concern and support respectively, it is unlikely that either side will take action in committee or on the floor until the Air Force has responded in 60 days. It will be at that point we will all see just how long the road ahead will be.

Congress will have to find a way to stop its five year feud over securing new Air Force tankers if the US is ever going to replace its aging fleet of refuelers. After all, Congress has the power of the purse. But unless both sides are satisfied with the final Air Force decision, it is hard to see funding of a tanker replacement contract ever making it out of Congress. That would not bode well for NG/EADS or Boeing. After all, a contract let by the Air Force is nothing more than a pile of paper unless it is given life blood by appropriated federal funds.

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