Tanker Contract Reopened

As was expected, the Department of Defense yesterday announced it would reopen the bidding process on its $40 billion aerial refueling tanker contract. The move was widely expected following last month’s GAO report (see my post here) which found several significant deficiencies in the way the contracts were awarded. This announcement is welcome news for Boeing, which lost the contract to Northrup Grumman in February and immediately filed a complaint with the GAO.

In response to the GAO criticisms of the Air Force’s selection process, Secretary of Defense Robert Gates decided that his procurement director, Undersecretary John Young, will personally oversee the rebidding process. But, in what is certainly welcome news for Air Force brass, the Secretary said he doesn’t think that problems identified by the GAO warrant removing senior Air Force officials from their posts.

This newest round of bidding represents the third time the Air Force has sought a contract to replace its aging fleet of refueling tankers. On the first go around, Boeing received a no-bid contract to provide new tankers. Following widespread criticism and scandal at both Boeing and within the Air Force, the contract was reopened for bidding, which Northrup Grumman won in February. Then Boeing complained, and here we find ourselves. For the sake of American taxpayers, let’s hope the adage “Third time’s a charm” holds true.

Source:Boeing Gets Chance to Wrest Tanker Job From Northrop,” The Wall Street Journal, July 10, 2008.