March 24, 2009 / 6:10 PM / in 10 years

Former US Air Force exec backs split tanker buy

WASHINGTON, March 24 (Reuters) - Former Air Force Secretary Michael Wynne on Tuesday threw his support behind a proposal to split $35 billion in orders for new refueling aircraft between Boeing Co (BA.N) and a team made up of Northrop Grumman Corp (NOC.N) and Airbus parent EADS EAD.PA.

“There’s a lot of merit in the congressional argument to have two tankers,” Wynne told Reuters.

Several key lawmakers, led by Representative John Murtha, who heads the House of Representatives’ Appropriations Defense subcommittee, favor dividing the contract between Boeing and Northrop, but Defense Secretary Robert Gates opposes the plan.

Murtha argues that awarding the contract to just one of the two bidders would result in further delays because the losing bidder would likely protest. He is considering

Murtha is considering adding funding to a new Pentagon war spending request for fiscal 2009 to jump-start the program.

Gates says splitting the work between the two competitors would add to Air Force logistics, training and support costs.

But Wynne, a longtime Pentagon acquisition official, said he firmly believed that any contract award to just one would certainly be protested, which could delay the program for another year. He called the competition “a white hot poker.”

Further delays would be bad news for the Air Force, given the high use of tankers to refuel planes used in Afghanistan and Iraq and the hard work needed to keep the existing fleet of 50-year-old refueling planes running, Wynne said.

“This is a tremendous burden on the maintenance people,” said Wynne. Gates fired Wynne and Air Force Chief of Staff last June following nuclear security breaches and tension over the resources needed to fight in Iraq and Afghanistan.

The Air Force’s first effort to replace its aging fleet of KC-135 tankers, rooted in the post-Sept. 11 collapse of the commercial airliner market, fell apart in 2004 after a $23.5 billion Boeing lease-buy deal ended in scandal.

Then the Pentagon canceled a contract awarded to Northrop in February 2008 after government auditors upheld a Boeing challenge. The competition is now due to resume this spring.

Wynne, who presided over the contract award to Northrop, said at the time that both companies submitted “good responses” and the Air Force would be happy to fly either airplane.

On Tuesday he said the need for tankers had grown increasingly urgent since the nonpartisan Government Accountability Office first urged the Air Force to begin replacing its aerial tankers in 1998, more than a decade ago.

Adding two new types of tankers to the fleet instead of one would add some costs, he said, but noted that the Air Force already had to maintain two models of KC-135s and KC-10 tankers.

The new airplanes, by contrast, would be easier to maintain and the cockpit design is similar, he said.

In addition, he said even the development cost for two new refueling airplanes — estimated to be around $1.5 billion each — would be far less than the cost of developing the U.S. military’s new F-35 fighter jet at a cost of $35 billion.

“Congress is saying, ‘Let’s just do it.’ They’d be buying a high reliability in a very crucial area for America’s way of war, which is expeditionary,” Wynne said.

Even doubling the current plan to buy 12 to 15 tankers a year would still amount to about one quarter of the rate at which the original KC-135s were purchased in the 1950s and 1960s, when the military bought 100 planes a year, Wynne said. (Reporting by Andrea Shalal-Esa, editing by Gerald E. McCormick)

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