There were several threads about this back when the initial decision was first announced, and I was pretty shocked at the disparity of the two aircraft submitted at the time, and now the GAO findings seem to support the boeing view that something screwy was going on furing the whole process.
In terms of historical precident, this is huge. Pretty much since WWI there has been a general understanding that if you dispute a government contract award with the military, 1. you will lose, and 2 you will never get another government contract. Period. The fact that boeing chose to persue it on a relitivly minor contract in terms of their total buisiness volume, and the fact that the GAO found in their favor is unheard of.
teh Article wrote:
Tanker fight a long way from over
Air Force team could be replaced
By JAMES WALLACE
P-I AEROSPACE REPORTER
It could be well into next year, and a new administration, before The Boeing Co. or Northrop Grumman Corp. knows which defense giant will supply air-refueling tankers for the Air Force.
One day after congressional auditors called on the Air Force to rebid a $35 billion tanker deal that was awarded Feb. 29 to Northrop and EADS, the parent company of Airbus, defense experts and industry analysts predicted the tanker saga will continue to play out for as much as a year or more.
The Government Accountability Office found such serious problems with the Air Force tanker selection process that the service not only should start the entire process over, but first replace its existing acquisition team, said Loren Thompson of the Lexington Institute, a public policy research group in Arlington, Va.
Thompson is known for having high-ranking sources within the Air Force. On the day the Air Force announced that Northrop-EADS had won the tanker competition over Boeing, Thompson learned of the decision an hour before others, including the media.
Sue Payton, the Air Force's chief weapons buyer responsible for the tanker award to Northrop, should be replaced, given the damaging GAO report, Thompson said in a phone interview Thursday. Payton has had nothing but praise for how well the acquisition process worked in picking what she and others in the Air Force have said was the best tanker.
But the GAO, the nonpartisan investigative arm of Congress, found the Air Force made a "number of significant errors" that could have affected the outcome, and on Wednesday it upheld Boeing's protest of the Northrop award.
"The scope of the problems identified by the GAO are so extensive that it looks impossible for the Air Force to simply fix this competition. They need to start over," Thompson said.
"Furthermore, because the problems are partly the incompetence of the acquisitions people, the Air Force needs a new cast of characters. Realistically, it will take a long time to reissue a request for proposals and generate new bids and then evaluate those bids."
Sen. John McCain or Sen. Barack Obama will be president long before the next tanker contract is awarded, Thompson predicted.
He is not alone in expecting a long delay before the issue is finally settled.
"This being an election year, we doubt whether any decision will be made rapidly," Rob Stallard, an analyst at Macquarie Research Equity in New York, wrote in a report to clients.
Douglas Harned of Bernstein Research also said in a research report that any rebid of the contract would "effectively move the decision to 2009 under a new administration."
"By the time a new award is given, we will likely have a new secretary of defense and secretary of the Air Force, which could change the way the service looks at this program," Harned wrote.
The delay will allow more time for a political debate about the relative merits of the two tanker offerings, he added.
UBS Research analyst David Strauss also predicted it may be a year or more before the tanker dispute is settled.
Meanwhile, Boeing's stock soared Thursday, while Northrop said it was putting off plans for a groundbreaking party June 28 in Mobile Ala., where its tankers would have been assembled. Executives with Northrop, EADS and Airbus, along with Alabama politicians and officials, were to gather at Brookley Field in Mobile to start development of two plants to be built for the Northrop tankers, based on the Airbus A330 jetliner.
Boeing's 767 tanker would be assembled at its Everett plant.
Shares of Boeing gained $2.30, or about 3 percent, to close at $76.95. Boeing's stock has tumbled in recent months because of a series of costly and embarrassing delays on the company's 787 program.
The GAO decision to sustain the Boeing protest is not binding on the Air Force, but the service is widely expected to follow the GAO recommendation and reopen the bidding. The Air Force has 60 days to respond to the GAO findings.
The tanker debate is playing out while the Air Force itself is under great scrutiny. Defense Secretary Robert Gates this month fired the top two Air Force leaders over issues related to the security of nuclear weapons.
Several members of Congress have called for an investigation of the Air Force's tanker acquisitions process as a result of the GAO report.
The new Air Force secretary would likely decide if Payton and her acquisitions team should be replaced before new tanker bids are issued, assuming the Air Force agrees to redo the competition.
The last tanker competition lasted nearly two years.
It was September 2006 when the Air Force issued a preliminary request for proposals for a new fleet of tankers to replace its Eisenhower-era KC-135s. Boeing and Northrop submitted their final tanker bids in April 2007. Boeing's bid was some 7,000 pages and filled 32 cartons.
Thompson, the defense analyst, said he has talked with a number of defense experts since Wednesday's announcement.
"We were all shocked at the breadth and severity of the problems the GAO identified," Thompson said. "The issues are not matters of technical details, but are fundamental issues of fairness and competence. I don't ever recall the GAO saying that the government misled a bidder and that it applied double standards."
In a brief summary of its 69-page report, which the GAO did not make public yet because it contains sensitive information related to Boeing and Northrop, the congressional agency said the Air Force conducted "misleading and unequal" discussions with Boeing.
"When you use words like that," Thompson said, "you are raising questions about the competency of the people conducting the competition. With a new Air Force leadership and a new administration coming in, this award can wait until the people running acquisitions have been switched."
Air Force team could be replaced
By JAMES WALLACE
P-I AEROSPACE REPORTER
It could be well into next year, and a new administration, before The Boeing Co. or Northrop Grumman Corp. knows which defense giant will supply air-refueling tankers for the Air Force.
One day after congressional auditors called on the Air Force to rebid a $35 billion tanker deal that was awarded Feb. 29 to Northrop and EADS, the parent company of Airbus, defense experts and industry analysts predicted the tanker saga will continue to play out for as much as a year or more.
The Government Accountability Office found such serious problems with the Air Force tanker selection process that the service not only should start the entire process over, but first replace its existing acquisition team, said Loren Thompson of the Lexington Institute, a public policy research group in Arlington, Va.
Thompson is known for having high-ranking sources within the Air Force. On the day the Air Force announced that Northrop-EADS had won the tanker competition over Boeing, Thompson learned of the decision an hour before others, including the media.
Sue Payton, the Air Force's chief weapons buyer responsible for the tanker award to Northrop, should be replaced, given the damaging GAO report, Thompson said in a phone interview Thursday. Payton has had nothing but praise for how well the acquisition process worked in picking what she and others in the Air Force have said was the best tanker.
But the GAO, the nonpartisan investigative arm of Congress, found the Air Force made a "number of significant errors" that could have affected the outcome, and on Wednesday it upheld Boeing's protest of the Northrop award.
"The scope of the problems identified by the GAO are so extensive that it looks impossible for the Air Force to simply fix this competition. They need to start over," Thompson said.
"Furthermore, because the problems are partly the incompetence of the acquisitions people, the Air Force needs a new cast of characters. Realistically, it will take a long time to reissue a request for proposals and generate new bids and then evaluate those bids."
Sen. John McCain or Sen. Barack Obama will be president long before the next tanker contract is awarded, Thompson predicted.
He is not alone in expecting a long delay before the issue is finally settled.
"This being an election year, we doubt whether any decision will be made rapidly," Rob Stallard, an analyst at Macquarie Research Equity in New York, wrote in a report to clients.
Douglas Harned of Bernstein Research also said in a research report that any rebid of the contract would "effectively move the decision to 2009 under a new administration."
"By the time a new award is given, we will likely have a new secretary of defense and secretary of the Air Force, which could change the way the service looks at this program," Harned wrote.
The delay will allow more time for a political debate about the relative merits of the two tanker offerings, he added.
UBS Research analyst David Strauss also predicted it may be a year or more before the tanker dispute is settled.
Meanwhile, Boeing's stock soared Thursday, while Northrop said it was putting off plans for a groundbreaking party June 28 in Mobile Ala., where its tankers would have been assembled. Executives with Northrop, EADS and Airbus, along with Alabama politicians and officials, were to gather at Brookley Field in Mobile to start development of two plants to be built for the Northrop tankers, based on the Airbus A330 jetliner.
Boeing's 767 tanker would be assembled at its Everett plant.
Shares of Boeing gained $2.30, or about 3 percent, to close at $76.95. Boeing's stock has tumbled in recent months because of a series of costly and embarrassing delays on the company's 787 program.
The GAO decision to sustain the Boeing protest is not binding on the Air Force, but the service is widely expected to follow the GAO recommendation and reopen the bidding. The Air Force has 60 days to respond to the GAO findings.
The tanker debate is playing out while the Air Force itself is under great scrutiny. Defense Secretary Robert Gates this month fired the top two Air Force leaders over issues related to the security of nuclear weapons.
Several members of Congress have called for an investigation of the Air Force's tanker acquisitions process as a result of the GAO report.
The new Air Force secretary would likely decide if Payton and her acquisitions team should be replaced before new tanker bids are issued, assuming the Air Force agrees to redo the competition.
The last tanker competition lasted nearly two years.
It was September 2006 when the Air Force issued a preliminary request for proposals for a new fleet of tankers to replace its Eisenhower-era KC-135s. Boeing and Northrop submitted their final tanker bids in April 2007. Boeing's bid was some 7,000 pages and filled 32 cartons.
Thompson, the defense analyst, said he has talked with a number of defense experts since Wednesday's announcement.
"We were all shocked at the breadth and severity of the problems the GAO identified," Thompson said. "The issues are not matters of technical details, but are fundamental issues of fairness and competence. I don't ever recall the GAO saying that the government misled a bidder and that it applied double standards."
In a brief summary of its 69-page report, which the GAO did not make public yet because it contains sensitive information related to Boeing and Northrop, the congressional agency said the Air Force conducted "misleading and unequal" discussions with Boeing.
"When you use words like that," Thompson said, "you are raising questions about the competency of the people conducting the competition. With a new Air Force leadership and a new administration coming in, this award can wait until the people running acquisitions have been switched."