The Tanker Decision Goes to Boeing—and Smears Fly
Perhaps it was inevitable. After ten years of contentious wrangling and with tens of billions of dollars going to the winner of the competition to build the U.S. Air Force's next fleet of tankers, no matter who won there would be recriminations and charges that the fix was in. If the European Aeronautic Defence and Space’s (EADS) bid had won, Boeing’s supporters would have pointed to the fact that the European-based company’s initial low price for its plane, the Airbus 330, was made possible by unfair government subsidies. And because Boeing has won, EADS’s fans are now pointing to Boeing’s lobbying campaign on behalf of its offer based on Boeing’s 767.
But some critics of the Pentagon’s choice of Boeing’s offer have gone further, suggesting that because Boeing’s headquarters are in Chicago and Obama is from the Windy City that somehow “Chicago Politics” determined the outcome. As the Wall Street Journal editors opined: “The fuel tanker debacle has undermined a competitive and open market for defense purchases free of political pressure.” Or as one Washington Times and American Spectator writer penned even more acidly: “Boeing gets the tanker contract. I smell a rat. A crooked rat.” Pretty serious charges, if true. But is there any evidence to support them?
The fact is, the effort to procure a new tanker now going on for a decade has been something of a mess since day one. With a tanker fleet procured during the 1950s and 60s badly in need of replacing, but a bill to do so possibly totaling $100 billion, the Air Force leadership initially hoped to square that circle by leasing 767s from Boeing rather than procuring them outright. The goal was to get planes on line sooner and for less up-front cost. Congress had its doubts about the strategy but those doubts turned to an emphatic “no” when investigators discovered that a senior Air Force official involved in negotiating the terms of the lease was using her position in those talks to, among other things, get a high-paying job at Boeing. Soon after, Congress passed legislation that required the Pentagon to conduct a formal competition to choose a new tanker and to make the procurement a regular purchase instead of a lease-to-buy arrangement.
And in the abstract, the competition made sense. However, there was one big problem: The airplane that best fit the Air Force’s standing requirements was the Boeing 767, an airframe not matched by any other manufacturer. But Boeing and EADS, the two companies that eventually wound up offering bids, did so with airframes that are significantly different. And the proposed EADS tanker would be based on the Airbus 330, a commercial passenger jet it manufactures, which is a good deal larger and flies longer distances than the 767.
The Air Force had a Sisyphean task from the get-go. Keeping two very different planes in the competition forced the service to make the requirements vague enough, promising that any final judgment would be and could be questioned. Nor was it the case that bigger would necessarily be better. Because of the 330’s size, for example, it was judged to be too big for a number of the airfields a tanker would be expected to operate from; yet, keeping that requirement would have eliminated the Airbus from the competition from the start. It would have also angered Congress, which had insisted on the competition without fully understanding what the consequences might be. As the Pentagon began to modify its requirements to keep the EADS-Airbus bid in the game, it inevitably began to give an edge to the larger plane. Hence, when Boeing challenged the Pentagon’s choice of the Airbus in 2008, the company could reasonably claim that the rules had been changed in midstream—a challenge that the General Accounting Office upheld.
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