Tag Archive: Northrop Grummon


PENTAGON IN THE TANKER

By Quin Hillyer on 10.8.09 @ 6:08AM

The Pentagon is playing dirty pool on behalf of the already-dirtiest pool players from Boeing, with regard to the huge (179-plane, about $40 billion) air refueling tanker contract that Northrop Grumman Corp. and EADS won fair and square last year before it was stolen away from them.

As a reminder: The swiping occurred after Boeing launched an unprecedented and underhanded political-hardball campaign after Northrop won the contract with a bigger, more versatile, more efficient plane. Boeing’s bid also was some $3 billion more expensive (or $42 million more expensive per plane) than Northrop’s for just the first 64 planes. And Northrop’s offering would support, it believably claims, some 48,000 American jobs at 230 supplier companies in 49 states, compared to 44,000 new jobs that Boeing claimed it would create. The Northrop plane also could start coming off the production lines sooner than Boeing’s, by all accounts.

(Reminder continued:) Yet after Boeing strong-armed politicians and the Pentagon, the Seattle- and Chicago-based company filed a formal protest, alleging more than 100 irregularities in what already had been the most open, public, analyzed contract award in Pentagon history. (The award actually itself was a re-do; at first the Air Force was to lease planes from Boeing, but Sen. John McCain led an investigation which found such serious shenanigans that several Boeing executives and Air Force personnel were convicted in a sort of kickback scheme. Those convictions led the Air Force to open the competition, which Northrop then won, only to have it snatched away.) Eventually the Government Accounting Office found that only eight of Boeing’s 100-plus complaints — among the least serious of the complaints, at that — were valid; but on that reed-thin basis, combined with the political pressure, Defense Secretary Robert Gates in September of 2008 announced he would re-bid the entire competition yet again, never mind what the delay would do to the readiness of a current tanker fleet containing some planes more than 50 years old. The strange decision was announced only after apparent leaks to Boeing-friendly congressmen but not to Northrop-friendly ones, on the same day that Gates and other Pentagon brass dined at the Boeing table for a major 9-11 memorial dinner.

(Still a reminder:) Gates also has repeatedly and stubbornly ruled out the idea of a split contract — first broached seriously in print right here in these pages more than two years ago — even though more and more observers and experienced, neutral congressmen have concluded that the competition between the two companies could lead to more planes, faster, and at a lesser long-term cost. Gates just so happens to have a house, where he plans to eventually retire, just outside of Seattle, where he also has family ties and where Boeing rules the roost. (How much do you want to bet that Gates ends up as a Boeing “consultant”?)

Which, finally, brings us almost up to date. Here’s what’s new (quoting the Associated Press): Boeing continues to deal with ethics problems. In August, it “agreed to pay $2 million to the Justice Department to settle a whistle-blower’s previously sealed claims that the company over-billed the government for work done at a plant in San Antonio.” The whistleblower “claimed Boeing manipulated records to show others besides him had been maintaining Air Force KC-135 tankers when they had not.”

New Criteria Favor Boeing

Yet, when the Pentagon finally got around, late last month, to producing its new Request For Proposal (RFP) outlining exactly what criteria it will use to make the new contract award, it had tweaked some of the requirements in ways beneficial to Boeing. Most disturbing of those tweaks were ones that actually de-emphasized the importance of a plane’s greater capabilities in the name of focusing only on price. Because it was those greater capabilities of the Northrop plane that made the biggest difference for Northrop last time, this change clearly helps Boeing — at the expense, perhaps, of the safety or capabilities of America’s airmen. (“This is no way to buy airplanes,” wrote the Mobile Press-Register‘s George Talbot, after interviewing numerous defense acquisition experts.)

More astonishingly, the Pentagon gave a huge competitive advantage to Boeing that has nothing to do with technical superiority or efficiency or anything else that involves actually determining which is the best plane for the job. What it did — get this — was to share Northrop’s pricing data, from its last bid, with Boeing. But it did not share Boeing’s pricing data with Northrop. Obviously, this gives Boeing a huge competitive advantage in crafting its bid — but the Pentagon refuses to make amends.

U.S. Sens. Jeff Sessions and Richard Shelby of Alabama — where the Northrop plane would be assembled in Mobile — have vociferously protested, with Sessions even introducing an amendment to block all funding for the tanker program until the Pentagon releases all the pricing data from the last round of competition. “How can we expect the playing field to be level if one company was given sensitive information about the other’s bid?” asked Sessions, a conservative stalwart, as quoted by the Mobile Press-Register. “If that is the case, the best way to rectify the situation is to demand that information be shared in both directions.”

Sessions is absolutely right. The Pentagon’s stance is manifestly unfair.

Not only should the pricing data be shared, but so should the whole contract. That idea has been given heft by, among a number of others, Michael Wynne, former Secretary of the Air Force, who argued more than a year ago that a split contract could benefit the country far into the future.

Now… why should we care about this?

We should care a lot, because this new tanker is one of the most important, desperately needed pieces of equipment — by almost universal acclaim — for the entire armed forces. Air power is the essential element of force projection in a world made ever more dangerous by the spread of nuclear weapons technology to rogue nations such as North Korea and Iran. And, as noted, the current fleet includes some planes more than half a century old, with more and more of them needing to be grounded for more and more repairs.

And, of course, the new technology — a plane hurtling through high altitudes with a “boom” (a long fuel tube) hanging from its belly and precisely maneuverable and insertable into the fuel tank of a jet fighter — is so much more spectacular than the old technology that it’s almost criminal not to give our courageous pilots the advantages of the new stuff.

 

 

Link:  http://spectator.org/archives/2009/10/08/pentagon-in-the-tanker

 

 

This was sent to me today from a reader who thought it may be of interest to those who read my blogs. From Citizens Against Government Waste:  5-2-08  (Found on: http://thefourwindsbar.blogspot.com/2008/05/tell-congress-don’t-blow-tanker-deal-for.html  )

 

 

 

 

Dear Newsmax Reader,

 

 

I urgently need you to tell your U.S. Representative and Senators today to set aside political and parochial interests and instead support the interests of taxpayers and our troops!

Let me explain.

The U.S. Air Force recently announced that it would award the contract for its next generation of aerial refueling tankers to Northrop Grumman Corp. The competitive vetting process used by the Air Force is a vast improvement over the originally proposed tanker lease deal with Boeing Corporation, which was crafted by members of Congress behind closed doors without any competitive review or debate in order to subsidize Boeing’s 767 production line as the company’s profits sagged in the wake of 9/11.

In truth, the tanker lease deal was nothing more than a corporate welfare giveaway to one well-heeled, politically influential company at the expense of American taxpayers. Then-Senator Phil Gramm (R-Texas) called it the worst pork-barrel handout he had seen in his 22 years on Capitol Hill!

The proposed deal also proved to be a prime example of cronyism and corruption. Subsequent federal investigations led to jail terms for Boeing’s Chief Financial Officer and the Air Force procurement official who negotiated the deal, the resignation of other top Boeing executives, and a fine of more than $600 million for the company.

By contrast, the latest tanker decision was based on an open and transparent bidding process. The Air Force ranked each bid on five criteria and Northrop Grumman won over Boeing on four out of the five and tied in one category. According to published reports, both sides praised the fairness of the competition before the award was announced and agreed that this was the most rigorous acquisition process in the Department of Defense’s history. The Government Accountability Office (GAO) is now reviewing the contract award, with a ruling on its propriety expected by June 19.

Yet, Boeing is again marshalling its congressional allies to try to secure through political favoritism what it couldn’t win in a free and fair competition! Help us stop them!

Boeing’s lobbyists and congressional friends are wrapping themselves in the flag and claiming that, in the name of “patriotism,” Congress should overturn the Air Force decision because Northrop’s prime subcontractor, the European Aeronautic Defence and Space Co., is a foreign company. The fact is that in today’s global economy companies like Boeing sell to European and other foreign governments all the time, their companies sell to us, and most U.S. defense systems, including those built by Boeing, contain foreign-made parts.

What’s more, despite Boeing’s propaganda to the contrary, the Northrop tanker will be assembled by American workers and outfitted with sensitive technology right here at home in Mobile, Alabama.

As the Wall Street Journal stated, “What’s really going on is a familiar scrum for federal cash, with politicians…using nationalism as cover for their pork-barreling.”

Among those Boeing allies screaming the loudest about the Air Force decision on Capitol Hill are House Defense Appropriations Subcommittee Chairman John Murtha (D-Pa.), one of the most notorious backroom dealmakers in Congress whom the public voted the “2007 Porker of the Year” in an online poll, and Senator Patty Murray (D-Wash.), whose “bona fides” on defense and national security include earmarking $1.7 million in Defense Budget funds to “improve the shelf life of vegetables.”

While the $35 billion cost to taxpayers of the tanker contract is significant, more is at stake in this battle than dollars and cents. As Under Secretary of Defense for Acquisition, Technology, and Logistics John Young said earlier this month, allowing Congress to preempt the GAO ruling or override the Air Force’s decision “would open up slippery slopes and dangerous precedents,” where members of Congress will simply select their favored pet contractors, regardless of the cost to taxpayers or the impact on our Armed Forces.

Please tell your Representative and Senators today to oppose any congressional intervention that would preempt the GAO review of the tanker contract award or overturn it based on political or parochial motives!

Sincerely,

 

Thomas A. Schatz
President

P.S. American servicemen and women are currently flying in tankers that date back to the early years of the Cold War. All the political maneuvering now underway in Congress just delays the Air Force in reequipping our forces with the newest and best technology. I urge you to tell your Representative and Senators to put the interests of taxpayers and American troops ahead of the “special interests” of one politically influential company.

***

Citizens Against Government Waste is the nation’s largest taxpayer watchdog group with over one million members and supporters nationwide. It is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government. For more information about CAGW, visit our website at www.cagw.org. Help CAGW wage this battle to preserve the integrity of the defense procurement process by making a tax-deductible contribution today.

Help us win this battle for taxpayers and our troops by getting as many Americans as possible to tell Congress: Stop meddling in the defense procurement process! Forward this message to your friends and neighbors.

 

 

 

 

 

 

 

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  1. Uproar over tanker contract continues as lawmakers clash
    By David Hess, CongressDaily

Threatening to derail the Air Force’s selection of a foreign-designed air tanker to refuel military warplanes, a group of lawmakers led a Capitol Hill rally of American aerospace workers Thursday and pledged to shoot down the deal.

As the senators and representatives lined up at a news conference with Boeing Co. union leaders and engineers across the street from the Capitol, Sen. Roger Wicker, R-Miss., took the Senate floor to stoutly defend the Air Force’s choice of a tanker that would be built by a consortium of Northrop Grumman Corp. and EADS, a European consortium whose Airbus airframe would serve as the tanker’s skeleton.

While it remains unclear exactly how the huge contract for the 179 tankers could be repudiated, Rep. Norman Dicks, D-Wash., whose district embraces thousands of Boeing workers, said the upcoming Defense appropriations process could provide the opportunity.

Full story: http://www.govexec.com/story_page.cfm?articleid=39808&dcn=e_gvet

 

 

Uproar over tanker contract continues as lawmakers clash

CongressDaily

 

Threatening to derail the Air Force’s selection of a foreign-designed air tanker to refuel military warplanes, a group of lawmakers led a Capitol Hill rally of American aerospace workers Thursday and pledged to shoot down the deal.

As the senators and representatives lined up at a news conference with Boeing Co. union leaders and engineers across the street from the Capitol, Sen. Roger Wicker, R-Miss., took the Senate floor to stoutly defend the Air Force’s choice of a tanker that would be built by a consortium of Northrop Grumman Corp. and EADS, a European consortium whose Airbus airframe would serve as the tanker’s skeleton.

While it remains unclear exactly how the huge contract for the 179 tankers could be repudiated, Rep. Norman Dicks, D-Wash., whose district embraces thousands of Boeing workers, said the upcoming Defense appropriations process could provide the opportunity.

Sen. Patty Murray, D-Wash., who led the protest, said the bipartisan opposition to the deal is weighing all of the options to short-circuit the Air Force’s decision. One risky approach might be an attempt to abrogate any contracts between the Pentagon and Northrop Grumman-EADS — an option that could send the dispute into U.S. courts and drag out the actual building of the plane by years.

Boeing is now seeking to overturn to contract through the formal protest it filed with GAO, which must issue a ruling by June 19.

At the rally, Murray and Dicks were joined by several other lawmakers whose states and districts could be harmed by Boeing’s loss of the work. Others on hand to rail against the Air Force decision were Sens. Maria Cantwell, D-Wash., and Pat Roberts, R-Kan., and Reps. Todd Tiahrt, R-Kan.; Jay Inslee, D-Wash., and Dave Reichert, R-Wash.

The protestors accused the Air Force of stacking the deck against Boeing and, as Dicks complained, “doing tricky things” to justify the award to Northrop-EADS. “They bent over backward to make sure Boeing didn’t get it,” he fumed.

Opponents of the contract argued that U.S. security is undermined when contracts for American weapons systems and technology are granted to foreign companies, and contended that defense dollars should not be spent abroad. “We need to keep our taxpayers’ dollars here at home to help our country’s economy,” Murray said.

The construction of the planes could cost up to $40 billion over a decade. Boeing workers have said the loss of the contract could end thousands of jobs in Washington, Kansas and other states.

As the protest of the contract continued, Wicker was on the Senate floor extolling its virtues. Northrop Grumman’s proposal, he maintained, represented “a better product and better value for the taxpayer.” He noted that assembly of the plane, from major parts manufactured in Europe, would take place in Alabama and parts for it would be made in 49 U.S. states, including along the Gulf Coast in his home state.

He took issue with Boeing’s estimate of job losses, insisting that the Northrop Grumman tanker deal “will create 48,000 direct and indirect jobs across our country,” and complained that opponents have spread misinformation about the economic impact of the project.