By Jen DiMascio

A senior member of the House Appropriations defense subcommittee and other lawmakers are pressing for hearings on the Air Force’s decision to award Northrop Grumman [NOC] a contract to develop the service’s next generation of aerial refueling tanker aircraft.

They are also trying to move up an Air Force debriefing for Boeing [BA], the loser in the competition, anticipated on March 12, according to George Behan, a spokesman for Rep. Norm Dicks (D-Wash.).

According to a statement from his office, Boeing was prepared to offer a large tanker, its 777, for the competition in November 2006, but communications with the Air Force at the time indicated the competition sought a “medium size” tanker.

That issue could be grounds for protest and provide the background for questions in upcoming hearings, the statement said.

House Speaker Nancy Pelosi (D-Calif.) said the Air Force’s decision “raises serious questions that Congress must examine thoroughly,” including the national security implications of using a foreign firm, the risks of using a conceptual design and whether enough consideration was given to jobs.

Labor unions launched an all-out offensive yesterday against the contract decision.

During a press call, several union leaders from across the country said they were calling on Congress to find ways to overturn the decision legislatively and to prompt hearings among the congressional defense committees.

“We intend to not leave any stone unturned,” said Richard Michalski, general vice president of the International Association of Machinists and Aerospace Workers (IAMAW).

By not awarding the contract to Boeing [BA], the heavy favorite, union leaders said the nation’s economy would take a hit. The company has a 50-state presence in terms of suppliers, they said, including $4.6 billion in annual sales to suppliers from Ohio and $1.8 billion in annual sales within Texas.

The service based its decision on mission capability, proposal risk, past performance, cost price and an integrated fleet aerial refueling rating–the economic impact did not factor into the decision, Sue Payton, the Air Force’s chief weapons buyer, said during a press briefing last week.

Michalski blasted that decision to exclude economics and job creation from the selection criteria as “just outrageous.”

But Sen. Richard Shelby (R-Ala.) disputed the notion that the nation would lose jobs as a result of the contract award.

“With this new assembly site in Mobile, Alabama, this contract will bring tens of thousands of jobs into the U.S.” Shelby said in a floor statement. “According to the Department of Commerce, Northrop Grumman will employ approximately the same number of American workers on the tanker contract that Boeing would have employed had they won.”

On the legislative front, Michalski said he is looking for a bill that would require the U.S. Trade Representative to certify that companies bidding for defense work are not involved with “illegal subsidies.”

Rep. Duncan Hunter (R-Calif.), the ranking member of the House Armed Services Committee, has fought in the past for such legislation, but it has not yet been included in a defense authorization act.

At this point, Hunter is gathering information about the Air Force’s rationale for the decision and its implications before it makes a decision about whether to bring up the prior provision or another type of Buy America restriction, according to his spokesman.

The tanker competition kicked off with a dispute about trade subsidies. In 2006, a draft request for proposals (RFP) asked both teams how to ensure that World Trade Organization disputes involving Boeing and Airbus did not prevent both of them from being able to compete fairly (Defense Daily, Sept. 26, 2006). In April, the RFP asked for input relative to the WTO issue in the tanker request for information, the first time it had ever included language of this type in an information request.

By the end of 2006, Sen. John McCain (R-Ariz.), now the likely Republican presidential nominee and the ranking member of the Senate Armed Services Committee, extracted language from a draft RFP that referenced ongoing trade disputes. He appealed to Deputy Defense Secretary Gordon England and also to Robert Gates, who was then nominated to become the next defense secretary (Defense Daily, Dec. 7, 2006).

Michalski said the group met yesterday with Rep. David Obey (D-Wis.), the chairman of the House Appropriations Committee. His committee did not confirm or deny the meeting or reveal details of the discussion.

Despite the focus by labor unions on trade and workforce issues, a defense industry consultant yesterday released an analysis of the service’s rationale for the decision.

Loren Thompson, chief operating officer of the Lexington Institute, said he has been “telling everyone in the western world for two years that Boeing would win.”

But his paper said Northrop Grumman won in four of the five selection criteria and that the outcome “was not close.” Boeing matched Northrop Grumman, Thompson said in the proposal risk category, but only after it stretched the development schedule, a move that added cost, Thompson wrote.

In addition, Boeing fell short in terms of past performance after looking at six Northrop Grumman programs and “poor execution” in three programs by Boeing, Thompson said.

Although he said he did not know what those programs were, Thompson said late delivery of tankers to Italy and Japan, as well as subcontractor work on the C-130 avionics modernization program were likely contenders.