U.S. News

Gates wants competitive U.S. aerial tanker bids

WASHINGTON (Reuters) - Defense Secretary Robert Gates said he intends to proceed with a competitive process in a $35 billion program to begin replacing the aging fleet of U.S. aerial refueling tankers.

Northrop Grumman Corp and its European partner EADS beat out Boeing Co to win the contract last February, but the Pentagon in September decided to start over after government auditors found problems, and the competition became very politicized.

“I am firmly committed to a competitive process,” Gates told the Senate Armed Services Committee on Tuesday, adding he planned to meet with top Air Force and Pentagon officials to map out next steps in the delayed competition once a new deputy defense secretary and chief arms buyer were confirmed.

Sen. Carl Levin, the Michigan Democrat, who chairs the committee, said at the outset of Tuesday’s hearing that the panel would take quick action on the nomination of William Lynn to become deputy secretary, once the Obama administration answered questions about his work for Raytheon Co.

President Barack Obama has not yet nominated anyone to replace the current chief weapons buyer John Young.

Gates said picking people for high level jobs had become increasingly difficult, given ethics concerns and the small number of individuals with the needed experience.

He said the tanker competition clearly aroused “strong feelings around the country,” but the department needed to ensure that the aircraft were picked in a competitive process.

“It seems to me that the key is a competitive bid, meeting technical requirements, and the best deal for the taxpayer,” he said, adding, “I certainly intend to proceed with a competitive process.”

Republican Sen. Jeff Sessions, a strong supporter of Northrop’s bid, given that it would have led to creation of many jobs in his home state of Alabama, reminded Gates than an earlier Air Force proposal to award a non-competitive contract to Boeing had collapsed after various watchdog groups concluded it would have cost billions of dollars more than necessary.

Reporting by Andrea Shalal-Esa; Editing by Tim Dobbyn