Air Force gives EADS another chance to submit tanker bid

McClatchy NewspapersMarch 31, 2010 

WASHINGTON — A day after President Barack Obama and French President Nicolas Sarkozy discussed it at the White House, the Pentagon said Wednesday it would delay for 60 days the deadline for submitting bids on a $35 billion contract for aerial refueling tankers if a European company promised to compete.

The European Aeronautic Defense and Space Co., which had sought a 90-day extension, was cagey about its plans. Guy Hicks, an EADS spokesman, explained the 90 days would be the minimum need to prepare a "responsible proposal" but said the company would consider a 60-day extension.

Pentagon officials said they expected an EADS bid.

"We wouldn't be having the conversations we have been having unless they were seriously considering a bid," said Geoff Morrell, a Pentagon spokesman.

The Pentagon has given EADS until April 10 to make up its mind, according to Rep. Norm Dicks, D-Wash.

EADS is the parent company of Airbus, the chief rival of American aerospace company Boeing in the commercial airplane market. Boeing has said it will bid on the tanker contract.

Morrell said a 60-day delay would be reasonable and not without precedent in such a large contract. Morrell also denied that local or international politics played a role in the Pentagon's decision to postpone the deadline.

"Politics are not a part of this process, never have been, never will be," Morrell said.

At a joint news conference Tuesday, Sarkozy said he and Obama had discussed the tanker contract. The French president said EADS would bid.

"If you say to me the request will be free, fair and transparent, then we say EADS will bid and we trust you," Sarkozy said.

Obama sought to distance himself from the contract, saying Defense Secretary Robert Gates is in charge of procurement decisions.

"The president does not meddle in these decisions," Obama said.

The White House declined comment Wednesday and referred questions to the Pentagon.

The decision to delay the bid deadline angered Boeing supporters on Capitol Hill.

"This is completely unacceptable," Sen. Patty Murray, D-Wash., said in a statement. "The extension means that we are once again bending the rules for a company that has refused to play by them. It is time to stop being held hostage by Airbus' 11th-hour demands."

About 9,000 Boeing jobs are at stake in Washington state and roughly 1,000 in Kansas.

Rep. Todd Tiahrt, R-Kan., said the administration was "pandering" to foreign interests.

"It is outrageous that the Obama administration has caved to European lobbying one day after meeting with French President Nicolas Sarkozy," Tiahrt said in a statement.

EADS' congressional supporters said the Pentagon had made the right decision in delaying the bid deadline.

"It is my hope that EADS will be able to offer a competitive bid, despite the fact the RFP (request for proposals) has been skewed toward Boeing from the beginning," said Sen. Richard Shelby, R-Ala.

EADS, along with such European leaders as Sarkozy and British Prime Minister Gordon Brown, have said the current competition unfairly favors Boeing's mid-size tanker.

Boeing had no immediate comment.

The Pentagon announcement came barely a week after the World Trade Organization, in a final ruling, found Airbus had received an estimated $200 billion in illegal subsidies from the governments of France, Germany, Spain and Britain to launch its family of aircraft, including the one that would be used as the airframe for the European tanker.

The Pentagon has previously said the subsidies wouldn't be a factor in the competition.

Dicks, the new chairman of the House Appropriations Committee's defense subcommittee, which controls the Pentagon budget, said that was unacceptable.

"I might have to do something," Dicks said. "I am thinking about the options."

Dicks said he was disappointed by the Pentagon's announcement, but he added that the Pentagon made clear it wasn't changing any of the criteria for the bids or the basis for evaluating them.

"I told them a week or two delay would be acceptable," Dicks said. "But the big thing is they haven't changed the criteria."

The Pentagon said it still hoped to award the contract in the early fall.

The possible 60-day delay was the latest twist in the nearly nine-year-old effort to replace the nation's fleet of more than 600 Cold War-era refueling tankers. The initial contract is for 179 tankers. The deal eventually could be worth $100 billion.

The tanker competition has been marked by a major Pentagon procurement scandal and heated political infighting on Capitol Hill. The contract was originally awarded to a team of Northrop Grumman and EADS, but that contract award was challenged by Boeing and overturned by government auditors.

Northrop Grumman pulled out of the latest competition. EADS said it would consider offering a bid but needed more time and requested the deadline be extended.

The Boeing tanker would be based on a 767 airframe built at its Everett, Wash., plant and converted for military use at a company facility in Wichita, Kan.

EADS' tanker would be based on an Airbus A330 airframe. Their initial tankers would be assembled at the Airbus factory in Toulouse, France. EADS has announced plans to build a new tanker assembly plant in Mobile, Ala. Work on that facility hasn't begun.

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