WASHINGTON — Boeing received a major boost from a House of Representatives subcommittee Wednesday when it imposed tight restrictions on the Pentagon as the Defense Department seeks new bids on a $35 billion contract for Air Force aerial-refueling tankers.
The action was the first on Capitol Hill since the Air Force awarded the contract to a European aerospace company and its U.S. partner earlier this year. Boeing had protested the decision to award the contract to Northrop Grumman and the European Aeronautic Defense and Space Co.
After congressional auditors found "significant errors" in the award, the Air Force decided to reopen the competition.
Pentagon officials had indicated that they'd release a draft of a revised request for bids by the end of July. But the action by the House Defense Appropriations subcommittee put a new twist in the Air Force's seven-year effort to replace its fleet of more than 600 Eisenhower-era tankers. The contract, one of the largest in Defense Department history, eventually could be worth $100 billion.
The defense spending bill essentially requires the Pentagon to abide by the provisions of the earlier bid proposal, something that the Government Accountability Office said it didn't do in the original competition.
The language in the bill requires the Pentagon to seek a medium-sized tanker like the one Boeing offered and prohibits extra credit for a larger tanker like the one offered by Northrop-EADS. It also requires that a new tanker be capable of refueling all planes currently flown by the Air Force, a requirement that the Northrop-EADS tanker was unable to meet and that the Air Force dismissed in the earlier competition.
In addition, language in the defense bill would require the Pentagon to consider the cost of operating and maintaining the new tankers over a 40-year life cycle, rather than a 25-year cycle. That could favor the Boeing plane, which according to one analysis would use $35 billion less in fuel over 40 years.
The measure provides more than $893.4 million for the tanker program in the coming fiscal year, but the Pentagon has to get approval from the subcommittee before spending the money.
Not surprisingly, Boeing was pleased with the outcome.
"We appreciate this strong bipartisan support for following the GAO recommendations and look forward to working with our customer towards delivering the right aircraft into the hands of the war fighter," Boeing said in a statement.
The Defense Department declined to comment and Northrop-EADS had no immediate comment.
Details of a defense appropriations bill generally aren't released until the bill comes before the full House Appropriations Committee, but McClatchy obtained a copy of the tanker language Wednesday
The subcommittee's chairman, Rep. John Murtha, D-Pa., inserted the language into the defense spending bill after nonstop lobbying by the No. 2 Democrat on the subcommittee, Washington state Rep. Norm Dicks. Rep. Todd Tiahrt, R-Kan., is also a member of the subcommittee. Boeing is a big employer in Washington state and Kansas.
"The bottom line is this is good language," Dicks said. "We went through each of the GAO's recommendations and told them to fix it. I hope this sends a strong message to the Defense Department this needs to be done fairly."
The full House Appropriations Committee will consider the bill after Congress' August recess, and it may be one of the few spending measures that are approved this year. A dispute over offshore oil drilling has stalled virtually all other appropriations bills.
The defense spending bill is considered a must-pass measure, as it provides money for troops fighting in Iraq and Afghanistan.
The Senate has taken no action on its version of the bill.
EADS is the parent company of Airbus, Boeing's chief rival in the commercial airplane market.
The Boeing tanker would be based on a 767 airframe built at the company's plant in Everett, Wash., and modified for military use at the company's facilities in Wichita, Kan. An estimated 9,000 jobs in Washington state and 1,000 or so in Kansas are at stake.
The Northrop-EADS tanker would use an A330 airframe, currently assembled in Toulouse, France, using French, German, English and Spanish parts. The tankers eventually may be assembled in Mobile, Ala., but work on a new plant that's planned there hasn't begun.