US Air Force vows rigorous look at tanker bids
WASHINGTON, May 7 (Reuters) - The U.S. Air Force on Monday said it has more than 150 experts scrutinizing rival bids in a $40 billion aerial refueling tanker competition to ensure that every step of the process is done "by the book."
Boeing Co. (BA.N) is competing against a team that includes Northrop Grumman Corp. (NOC.N) and Airbus parent EADS (EAD.PA) to build the first batch of tankers in what the Air Force has billed as its No. 1 acquisition priority.
"The program office is being extra cautious in ensuring that each step of the source selection process is thoroughly documented," said Joe Leising, contracts chief for the 653rd Aeronautical Systems Squadron at Wright-Patterson Air Force Base in Ohio, where the evaluation team is sequestered.
Congress in 2004 killed an earlier Air Force proposal to lease and buy 100 Boeing 767s as refueling tankers after the former No. 2 Air Force acquisition official was convicted of violating federal conflict-of-interest laws.
The official, Darleen Druyun, later admitted steering business deals to Boeing, out of gratitude because the company hired her daughter, son-in-law, and later, Druyun herself.
The scandal, investigated by Arizona Republican Sen. John McCain, led to increased congressional scrutiny of many big defense contracts, and prompted the Pentagon to temporarily assume oversight of the biggest Air Force contracts.
In March, the congressional Government Accountability Office (GAO) criticized the Air Force's lack of analyses on passenger and cargo needs for the new tankers, and said it was at risk of "spending several billion dollars unnecessarily."
In recent months, McCain and other lawmakers have raised questions about another big program, a $15 billion competition for new helicopters, after the GAO in February said the Air Force was inconsistent in how it evaluated the competing bids.
Terry Kasten, director of the 653rd Aeronautical Systems Squadron, said in a statement that his team was keen to avoid any problems with the tanker competition.
"When the dust settles, we'll have spent many tens of thousands of man-hours scrubbing the content of these proposals, conducting a legal review and preparing summary information for both an independent advisory council assessment and ... a source selection authority decision," he said.
Kasten said senior Air Force legal and contracting advisers were standing by to "answer questions, capture lessons from other programs, including the recent experience with the CSAR-X (helicopter) source selection, and ensure we do everything by the book."
Boeing spokesman Bill Barksdale said the competition had been run in a "very open" manner thus far. "I think it's a very healthy process right now, from our perspective," he said.
Northrop declined comment.
Lt. Gen. Jack Hudson, the Air Force Program Executive Officer for Aircraft at Wright-Patterson air base, said senior Pentagon officials had carefully monitored the tanker program.
"Our leadership is very aware of our efforts and they have ensured we proceed in a deliberate and transparent manner, every step of the way, so that at the end of the day we have a program in which we all have high confidence that we can execute successfully," he said.
The Air Force said it expects to pick a winning bidder by the end of the year. Industry officials said a decision could come as soon as October.
