By Jen DiMascio
In a surprise decision, the Air Force on Friday picked a Northrop Grumman [NOC]-European Aeronautic Defense and Space Co. (EADS) team over Boeing [BA] to develop and produce the service’s next aerial refueling tankers.
The award launches the development effort that will replace the service’s fleet of KC-135 Stratotankers, in service for half a century.
In the weeks leading up to the announcement, the Air Force tried to head off what was seen as a likely protest by the loser.
Air Force Secretary Michael Wynne went so far as to recently tell reporters the rumor was that both companies had an unofficial agreement not to protest. Both companies denied the rumor (Defense Daily, Feb. 14).
The Air Force strategy was to provide detailed information to both sides about the rationale for the decision, because misunderstanding was a key factor in fueling multiple protests against another top Air Force priority, the Combat Search and Rescue helicopter platform.
One striking aspect of this competition was the aggressiveness with which industry fought for a win.
As is typically the case, both sides divvied up congressional backing. The Washington state delegation rallied behind Boeing, with defense appropriator Rep. Norm Dicks (D- Wash.) out front drubbing Northrop Grumman’s entry. The company also picked up vocal support from lawmakers like Rep. Todd Tiahrt, a Republican from Kansas, where Boeing plans to finish final assembly of the tanker, and elsewhere. Sen. Kent Conrad (D-N.D.) leads the Tanker Caucus said is pulling for Boeing.
Meanwhile, Alabama politicians like Sen. Richard Shelby (R), Sen. Jeff Sessions (R) and Rep. Jo Bonner (R) threw their weight behind Northrop Grumman’s KC-30.
As the Air Force considered the businesses’ final proposals, the companies hedged their bets with outside incentives.
For instance, EADS is offering to make commercial aircraft in Mobile, Ala., alongside the tanker if Northrop Grumman wins the contract.
Asked whether that kind of sweetener makes a difference, Paul Meyer, general manager and vice president of Air Mobility Systems at Northrop Grumman, didn’t discount the possibility.
“Does it have an impact on the outcome? I don’t know. This is Washington, D.C. It could,” Meyer said.
Despite the tough fight, Boeing and the Air Force both made concerted efforts to show that this competition was played above board.
The last tanker competition ended in scandal. Boeing won that contracting battle in 2002 against the EADS for a deal potentially worth $20 billion.
By 2004, the service’s plan to lease tankers from Boeing derailed in the wake of investigations, the resignations of top Air Force officials and prison time for a Boeing executive.
Shelby’s office responded to the news before the Air Force’s formal announcement. “Our state is on a roll economically and the tanker contract adds to the growing momentum. Bringing these jobs to Alabama will solidify our stellar reputation as an industrial leader and send a strong message to the rest of the world: Alabama is open for business.”