Senators slam Air Force over $35 billion tanker contract

McClatchy NewspapersJanuary 27, 2011 

WASHINGTON — Senators from both parties lambasted the U.S. Air Force Thursday after military officials acknowledged that they'd accidentally disclosed secret data to competing bidders as part of their effort to award a $35 billion contract to build a new fleet of aerial refueling tankers.

At a hearing of the Senate Armed Services Committee, Sen. Claire McCaskill, D-Mo., called the incident "a debacle" and asked what punitive action had been taken. She said those involved in the error should be fired.

Sen. John McCain, R-Ariz., called it "a fiasco" and part of an ongoing "saga of mismanagement."

"Thank goodness it wasn't classified," said Sen. Scott Brown, R-Mass., who also expressed wonder that it has taken the Air Force more than a decade to award the contract. "It's only the federal government that would take 10 years to do a contract. ... It just makes no sense to me."

"This is not the finest moment for the Air Force, and I am part of it," said Sen. Lindsey Graham, R-S.C., a colonel in the Air Force Reserve.

The hearing came only weeks before the Air Force is expected to award the contract to either Chicago-based Boeing or the European Aeronautic Defence and Space Company, commonly known as EADS, the parent of the aircraft maker Airbus.

In November, Air Force officials shared analyses of each side's bid with the other company. Military officials investigated the disclosure and decided that the bidding process could proceed.

"I would come to the conclusion that it wasn't damaged," Maj. Gen. Wendy Masiello told the committee.

In her prepared remarks, she said: "While the department regrets that the incident occurred, department leadership is satisfied that both companies responded to the incident correctly and professionally."

That satisfied two Republicans on the panel — both from states whose congressional delegations have offered strong backing to EADS, which has said it would build its tankers in Mobile, Ala.

Sen. Jeff Sessions, R-Ala., defended the Air Force, saying its reputation shouldn't suffer because of a human error.

"They did everything they could do," he said.

Sessions suggested that backers of the Boeing bid were out to "destabilize the process," adding: "I am not happy about it."

Sen. Roger Wicker, R-Miss., said the Air Force had responded correctly and professionally, noting that both companies were "relatively relaxed" and that neither had filed a formal complaint about the process.

Masiello called the data sharing "an inadvertent disclosure of information" and said that the two employees involved in the incident had been reassigned.

"I would like to know where they are," McCaskill told Masiello, saying she feared they would "resurface" elsewhere. She said the incident was "beyond the pale" and that the Air Force had failed at "a core competency."

Sen. Maria Cantwell, a Democrat of Washington, where officials have backed the Boeing bid because they expect it to mean thousands of new jobs there, requested the hearing to air the disclosure and assess whether it had given either company an unfair advantage.

On Wednesday, Cantwell and Republican Sen. Jerry Moran of Kansas introduced a bill that would require the Pentagon to consider any unfair advantages for either company gained through subsidies before awarding the contract.

Boeing backers allege that EADS has an advantage because it receives government subsidies. Boeing has large manufacturing facilities in Washington state, Kansas, Missouri and another plant slated to open this year in South Carolina.

"American workers, warfighters, and taxpayers deserve a level playing field in the tanker competition," Cantwell said.

Sen. Patty Murray, D-Wash., who cosponsored the bill, said that illegal foreign subsidies "are distorting this competition and stacking the deck against American workers."

A decision on which company will get the contract is expected in February or March.

After the hearing, Cantwell said she'd ask the Defense Department inspector general to investigate the incident.

"Today's hearing did not get at the core of the problem," she said. "The tanker competition is a price competition, and EADS saw Boeing's proprietary data. ... EADS now has an unfair competitive advantage to adjust its bid to undercut Boeing."

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