Boeing’s Tanker Bid Is Rejected

Boeing Co.’s $23-billion bid to lease and sell 100 aerial refueling tankers to the U.S. Air Force was rejected by lawmakers, making it possible the company will have to compete to win the program.

Negotiators in Congress prohibited the Pentagon from moving forward with plans to lease 20 tankers and buy the rest from Boeing, the Senate Armed Services Committee said in a statement. They also authorized “a multiyear procurement for 100 new refueling tankers,” the statement said.

Boeing’s tanker deal was put on hold by Defense Secretary Donald H. Rumsfeld after he learned former Pentagon official Darleen Druyun was offered a job by Boeing while negotiating for the Air Force. Druyun, sentenced a week ago to nine months in prison, in her plea admitted giving Boeing pricing data during the tanker talks and agreeing to a higher per-plane price than appropriate.

The rejection “brings the Air Force’s plan back to square one,” Sen. John McCain (R-Ariz.), who has been the most vocal opponent of the tanker deal since it was proposed, said in an e-mail statement.

“Under the bill, the Air Force may not enter into a sole-source contract with Boeing to lease or buy 767 tankers,” McCain said. “Indeed, the bill makes clear that at the end of the day, the Air Force plan to modernize its tanker fleet must be subject to full and open competition.”

Tanker advocate Rep. Norman D. Dicks (D-Wash.) had a different view. Dicks represents a district that has a number of Boeing workers and is near the Everett, Wash., plant where Boeing builds the basic 767.

“McCain is wrong,” he said. “Nowhere in the bill does say they have to re-compete this.” Still, there’s no question after the Druyun problems and questions raised in Pentagon reports that the agreement must be renegotiated, he said.

Congress had specified the lease or purchase of Boeing 767 tankers since the tanker deal was proposed in October 2001 by the Senate Appropriations Committee. The negotiators Friday specifically said the original legislation no longer applied.

The new plan will require “considering bids from all reliable sources,” said John Ullyot, a spokesman for the Senate Armed Services Committee.

The negotiators also mandated competition for what would have been a multibillion-dollar maintenance contract to Boeing. Congress must approve the negotiators’ proposal.

Boeing shares slumped $1.22 to $50.10 on the New York Stock Exchange.