Boeing questions loss on bid

From Reuters

Boeing Co. demanded immediate answers Tuesday on why it lost a $35-billion contract for refueling tankers to Northrop Grumman Corp. and its European partner EADS, as Boeing backers in Congress threatened to hold up funding for the deal.

Pentagon acquisition chief John Young defended the contract award, saying that the Defense Department followed procedures carefully and that there was no obvious reason for the loser to protest the decision.

But he said that he had urged the Air Force to brief Boeing “as soon as possible,” possibly on Thursday, and that there was no reason for an extended delay.

Young said federal law did not allow for consideration of how many jobs were created by a weapons program and required the military to get the “best value” deal it could.

“I don’t think anybody wants to run the department as a jobs program,” Young said, noting that most lawmakers generally wanted him to reduce the cost of weapons programs.


He also warned that any move by Congress to ban foreign-made weapons would be a “terrible reaction” and could trigger similar retaliation abroad.

A House appropriations subcommittee has ordered senior Air Force officials to explain at a hearing today why they gave the contract -- and several thousand related jobs -- to Northrop and Airbus parent EADS.

In the Senate, Sam Brownback (R-Kan.) vowed to fight funding for the deal to replace the Air Force’s aging KC-135 tankers, which were built by Boeing in the 1960s.

Brownback is a member of the Senate Appropriations Committee, which controls funding for the Pentagon and other federal agencies.

“I think it’s the wrong thing to do. I’m going to fight against this in appropriations,” Brownback said on the Senate floor, where his Kansas Republican colleague, Pat Roberts, as well as Washington state’s two Democratic senators, also railed against the Northrop deal.

If Boeing had won, it planned to build its 767 tanker in Washington state and modify it for military use in Kansas.

Chicago-based Boeing called on the Air Force to explain immediately why it lost the lucrative contract, claiming its bid was more cost-effective and less risky than Northrop’s proposal.

Boeing said the Air Force’s plan to wait until around March 12 to brief Boeing was “unusual” and “inconsistent with well-established procurement practices.”

Losing bidders have 10 days after receiving a formal debriefing to file a protest against the contract award.

Boeing has said it will review its options after the briefing.