February 24, 2010 / 11:15 PM / 7 years ago

CHRONOLOGY-U.S. Air Force tanker saga continues

7 Min Read

(Adds Pentagon statement on contract award)

Feb 24 (Reuters) - The U.S. Air Force on Wednesday released final rules for its third attempt since 2001 to buy new aerial refueling planes, after two earlier efforts failed amid ethics violations and technical mistakes.

Lawmakers said the revised final rules for a competition valued at $35 billion includes only slight changes from a controversial draft released in September, and said it was unclear whether Northrop Grumman Corp (NOC.N) would remain in the bidding against Boeing Co (BA.N).

Following is a chronology of events in the Air Force's effort to begin replacing its aging fleet of KC-135 aerial refueling tankers, which are now nearly 50 years old on average:

* Sept. 25, 2001 - Darleen Druyun, then the Air Force's No. 2 acquisition official, meets with officials at Boeing to lay out a strategy to lease 100 Boeing 767s.

* Oct. 9, 2001 - Then-Air Force Secretary James Roche says the service could lease Boeing 767s with an option to buy, if Congress passed supporting legislation.

* January 2002 - Congress passes a law appropriating defense funds for fiscal year 2002 that includes language saying the Air Force may lease up to 100 Boeing 767s.

* February 2002 - Air Force requests information from Boeing and Airbus parent EADS EAD.PA about tanker capabilities.

* September 2002 - Facing questions from Arizona Republican Senator John McCain about the urgency to replace tankers, the Air Force begins to cite a significant corrosion problem. However, the comments are contradicted by formal studies that view the corrosion problem as manageable.

* Oct. 17, 2002 - Druyun meets with then-Boeing Chief Financial Officer Michael Sears to discuss a job offer. Sears tells her: "This meeting really didn't take place."

* November 2002 - Druyun recuses herself from further negotiations with Boeing, retires mid-month and then accepts a $250,000-a-year job with Boeing.

* Jan. 3, 2003 - Boeing announces Druyun's hiring. Watchdog group Project on Government Oversight describes it as "one of the most egregious examples in recent memory of the revolving door between the federal government and defense contractors."

* May 23, 2003 - Then-Pentagon chief arms buyer Edward Aldridge approves $23.5 billion Air Force plan to lease, then buy, Boeing 767 tankers, four days before he retires.

* Nov. 24, 2003 - Boeing fires Druyun and Sears for unethical conduct in Druyun's hiring. Boeing Chief Executive Phil Condit resigns a week later.

* March 29, 2004 - Pentagon inspector general says the Air Force used an inappropriate procurement strategy in the tanker deal and recommends a halt until the Pentagon resolves several issues.

* April 21, 2004 - Druyun pleads guilty to a conflict of interest violation for discussing a job with Boeing while still overseeing billions of dollars of its business with the Air Force. She is later sentenced to nine months in prison.

* Oct. 28, 2004 - Congress passes a defense spending bill for fiscal 2005 that terminates the Air Force's authority to lease tanker aircraft.

* Nov. 16, 2004 - Sears pleads guilty to violating federal conflict of interest laws. He is later sentenced to four months in federal prison.

* September 2005 - Northrop Grumman says it will team with EADS to compete for an Air Force tanker contract.

* April 2006 - The Pentagon's chief weapons buyer at the time, Kenneth Krieg, says the Air Force can resume procurement of aerial refueling tankers.

* December 2006 - The Air Force agrees to exempt a World Trade Organization dispute between the European Union and the United States from the tanker competition, a dispute that could have knocked Northrop/EADS out of the contest. Krieg underscores the need for a fair and open competition, saying the program has "a lot of ghosts."

* January 2007 - The Air Force issues a final request for tanker proposals after various modifications. The five key criteria are mission capability, proposal risk, past performance, price, and an integrated fleet assessment.

* April 2007 - Boeing and Northrop submit bids in the tanker competition. The Air Force says more than 150 experts will examine the bids.

* August 2007 - Pentagon rules out splitting the tanker contract between both bidders because it would be too costly.

* October 2007 - The Air Force's No. 2 acquisition official, Charles Riechers, is found dead at his home in an apparent suicide. Riechers was working on the tanker program and was under scrutiny for a temporary job arrangement by the service while he awaited Senate confirmation.

* January 2008 - EADS and Northrop Grumman promise to build tankers at an Alabama plant should they win. Boeing would build its plane at plants in Kansas and Washington state if it won.

* Feb. 29, 2008 - The Air Force awards a projected $35 billion contract for 179 refueling planes to Northrop and EADS, prompting howls of protest from lawmakers backing the Boeing bid.

* March 10, 2008 - Boeing files a protest with the Government Accountability Office (GAO), citing "serious flaws" in the acquisition process.

* June 18, 2008 - The GAO upholds the Boeing protest of the Air Force tanker contract award to Northrop, citing "significant errors" in the acquisition process.

* Sept. 10, 2008 - Defense Secretary Robert Gates cancels the Northrop tanker contract after concluding the process has become too politicized for the Bush administration to resolve before it leaves office. He also removes control over the process from the Air Force.

* Dec. 1, 2008 - President-elect Barack Obama says Gates agrees to stay on as defense secretary.

* Sept. 16, 2009 - Gates returns control over the tanker competition to the Air Force, and continues to reject congressional discussions about buying planes from both companies.

* Sept. 25, 2009 - The Air Force releases a draft request for proposals for the tanker competition which includes 373 mandatory requirements and calls for a fixed-price contract for 25 years. Northrop and its supporters say the proposed terms favor Boeing's smaller 767 tanker.

* Dec. 2, 2009 - Wes Bush, president and chief operating officer of Northrop, tells Pentagon acquisition chief Ashton Carter that the company will not submit a bid unless the Air Force makes significant changes to the draft RFP.

* Feb. 3, 2010 - Gates says he hopes both Northrop and Boeing compete for the tanker contract, but says the Pentagon would move forward even if there were only one bidder.

* Feb. 24, 2009 - The Pentagon and Air Force release a revised final request for proposals, but lawmakers say the changes are slight and might not be sufficient to keep Northrop in the bidding.

* May 2010 - Companies are due to submit bids for the tanker competition, 75 days after release of the final RFP.

* Mid-September 2010 - The Pentagon said it expects to announce a contract award for new refueling planes in mid-September, 120 days after receiving companies' final bids. (Reporting by Andrea Shalal-Esa; editing by Gerald E. McCormick and Andre Grenon)

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