February 29, 2008 / 8:25 PM / 12 years ago

TIMELINE: U.S. Air Force tanker award will cap long saga

(Reuters) - The U.S. Air Force was expected to award on Friday a multi-billion-dollar aerial refueling tanker contract following a plan killed by Congress in 2004 in a procurement scandal that sent two former Boeing Co. (BA.N) officials to prison on conflict-of-interest charges.

In the current competition, Boeing offered its 767 and touted its 70-year history building tankers. The rival team of Northrop Grumman (NOC.N) and EADS EAD.PA submitted a bid with a version of the Airbus A330, which it argued could carry more fuel and cargo.

Following is a chronology of events in the Air Force’s effort to begin replacing its aging fleet of KC-135 aerial refueling tankers:

September 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.

October 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 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 about tanker capabilities.

September 2002 - Facing questions from Arizona Republican Sen. 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.

October 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 $250,000-a-year job with Boeing.

January 3, 2003 - Boeing announces Druyun hire. 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.

November 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 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.

October 28, 2004 - Congress passes defense spending bill for fiscal 2005 that terminates Air Force’s authority to lease tanker aircraft.

November 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 - Pentagon chief weapons buyer at the time, Kenneth Krieg, says Air Force can resume procurement of aerial refueling tankers.

December 2006 - 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 - Air Force issues 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 tanker competition. 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 - Air Force’s No. 2 acquisition official, Charles Riechers, found dead at his home in 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 if they win. Boeing would build its plane at plants in Kansas and Washington state if it wins.

February 25, 2008 - Pentagon’s Defense Acquisition Board meets to consider award of the tanker contract.

(Information from U.S. Air Force, the Pentagon inspector general’s office and industry)

Reporting by Andrea Shalal-Esa; Editing by Tim Dobbyn

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