Boeing [BA] announced recently it will protest the Air Force’s award to a rival Northrop Grumman [NOC]-European Aeronautic Defense and Space Co. (EADS) team for contract worth at least $35 billion to build the service’s air-refueling tankers.
The Chicago-based company will file the protest today, asking the Government Accountability Office (GAO) to review the Feb. 29 decision, it said in a statement.
“Our team has taken a very close look at the tanker decision and found serious flaws in the process that we believe warrant appeal,” said Jim McNerney, Boeing chairman, president and chief executive officer. “This is an extraordinary step rarely taken by our company, and one we take very seriously.”
The GAO will have 100 days to issue a ruling.
Boeing had been debriefed by Air Force acquisition officials last Friday on the contract decision, after which the company said it conducted a “rigorous analysis” of the Air Force evaluation that led Boeing to opt to protest.
“Based upon what we have seen, we continue to believe we submitted the most capable, lowest risk, lowest Most Probable Life Cycle Cost airplane as measured against the Air Force’s Request for Proposal,” McNerney said. “We look forward to the GAO’s review of the decision.”
Boeing will provide additional details of its case in conjunction with the protest filing on Tuesday, the statement said.
Within hours of Boeing’s Friday debriefing, it questioned the service’s rationale, saying the competition was closer than has been reported.
“We have serious concerns over inconsistency in requirements, cost factors and treatment of our commercial data,” Mark McGraw, vice president and program manager for tanker programs at Boeing, said in a statement yesterday afternoon.
Boeing said reports that the Air Force had not received adequate commercial pricing data from the company were not true.
“We provided unprecedented insight into Boeing commercial cost/price data that had been developed over 50 years of building commercial aircraft,” McGraw said. “We believe this data was treated differently than our competitor’s information.”
He also maintained Boeing did not misread Air Force requirements for the tanker.
“Our proposal was based on the stated criteria in the Air Force’s Request for Proposal, with a specific focus on providing operational tanker capability at low risk and the lowest total life cycle cost,” McGraw said.
Northrop Grumman released its own statement yesterday afternoon to correct what it dubbed “erroneous comments” made in Congress and the media about its contract award.
The company said its tanker deal would not transfer any jobs from the United States to France or any other country, and that the size of the proposed aircraft was not dictated by the Air Force.
“The KC-45A competition underwent the most rigorous, fair and transparent acquisition process in Defense Department history,” the Los Angeles-based company said.
Northrop Grumman officials were debriefed on the tanker selection yesterday, Air Force spokeswoman Lt. Col. Jennifer Cassidy said. Sue Payton, assistant secretary of the Air Force for acquisition and, Lt. Gen. John Hudson, commander of the Aeronautical Systems Center at Wright-Patterson AFB in Ohio, attended the meeting, Cassidy said.
Boeing has support from some corners of Congress, particularly among lawmakers from Washington State and Kansas, where the company has manufacturing facilities.
In a speech on the Senate floor yesterday, Sen. Patty Murray (D-Wash.) said that the Air Force has overlooked national security concerns by awarding the contract to a company controlled by foreign governments and the impact its decision will have on the economy. She added many serious questions about the contract remain including Northrop Grumman’s threat last year to pull out of the competition unless changes were made to the final request for proposals.
“Did the Air Force pull a bait and switch with this contract?” Murray said. “Did it unfairly change the process to benefit EADS? ”
Pentagon spokesman Geoff Morrell yesterday stood by the Air Force’s decision.
“We believe this to have been a fair and transparent competition,” Morrell told reporters at the Pentagon. Northrop Grumman “won based upon the merits of their proposal, and I think that the taxpayers are being provided with the best value for their dollar, and the warfighters are getting the best plane possible.”
The tanker contract awarded to Northrop Grumman calls for it to build up to 179 of the newly named KC-45A tankers, which will replace Boeing-built KC-135 Stratotankers that date back to the 1950s.
Payton told reporters Feb. 29 that Northrop Grumman-EADS provided the best value when looking at five deciding factors: mission capability, proposal risk, past performance, cost/price and performance in a simulated war scenario. The number of U.S. jobs generated by the respective bidders did not factor into Air Force’s selection process, she said.