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UPDATE 1-Pentagon unlikely to probe tanker data mix-up-sources
February 17, 2011 / 9:11 PM / 7 years ago

UPDATE 1-Pentagon unlikely to probe tanker data mix-up-sources

WASHINGTON, Feb 17 (Reuters) - The Pentagon’s internal watchdog agency is unlikely to investigate a data mix-up in the $35 billion U.S. aerial tanker competition between Boeing Co (BA.N) and Europe’s EADS EAD.PA, sources familiar with the issue said on Thursday.

A decision to skip an investigation about the Air Force’s inadvertent release of data to the competitors could pave the way for a tanker contract award by the U.S. Air Force sometime in the next two to three weeks, possibly as early as Feb. 25.

Senator Maria Cantwell, a Washington state Democrat, and six other senators who are backing Boeing’s tanker bid, asked the Pentagon’s inspector general last month to investigate whether the “clerical error” would mar the already politically charged competition.

Air Force officials insist the data mix-up last November was unintentional and involved no pricing data that could have comprised the procurement.

The inspector general’s office will soon notify the senators that it will not investigate the issue, according to two sources who were not authorized to speak publicly.

Officials at the Air Force and inspector general’s office declined comment.

The senators’ offices also had no immediate comment.

The high-stakes competition has fanned trans-Atlantic tensions and jockeying among U.S. lawmakers eager to bring jobs to their states.

A bipartisan group of senators backing Boeing’s bid, which is based on its 767 airliner, held a news conference at the Capitol on Thursday to highlight the jobs that would be created in their home states if Boeing won the competition.

Loren Thompson, an analyst with the Lexington Institute, called the data mix-up issue a “tempest in a tea pot.”

“There is no evidence that the inadvertent leaking of competition-sensitive information to the wrong teams was anything other than a clerical error,” he said. “The IG needs some sort of evidence to justify an investigation and that simply doesn’t exist.”

Boeing and EADS submitted final bids on Feb. 11.

Defense consultant Jim McAleese said he estimated that both companies submitted bids that were five to 10 percent lower than the production costs included in the previous competition.

Pentagon Comptroller Robert Hale told reporters this week that the Air Force was requesting nearly $900 million for the tanker program in fiscal 2012, and expected to award a contract in “a month or so.” (Reporting by Andrea Shalal-Esa)

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