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GAO Upholds Boeing’s Protest of Air Tanker Deal |
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Union members are demanding the U.S. Air Force immediately rebid the contract for a $35 billion air tanker, after the U.S. Government Accountability Office (GAO) today upheld Boeing’s protest of the deal the Air Force awarded to European-based EADS, maker of the Airbus, and Northrop Grumman Corp.
Paul Shearon, secretary-treasurer of the International Federation of Professional and Technical Engineers (IFPTE), and a former Boeing worker, says:
Today’s announcement by GAO confirms what the Boeing workers have suspected for months—that the Air Force failed miserably to practice due diligence to the taxpayers of our country by awarding this important defense contract to EADS. Given these significant flaws, IFPTE demands that the Air Force withdraw the contract award to EADS and undertake a new, transparent and complete competition immediately. Failing such a response by the Air Force, we urge congressional appropriators to reject funding for this misguided EADS contract and force the Air Force to rebid the contract.
“This is a major victory for America,” says Machinists (IAM) Vice President Rich Michalski.
In addition to multimillion dollar accounting errors and foreign government subsidies, the Air Force made changes midway in the competition that further favored the Airbus proposal. The GAO report should be the foundation for reversing this outrageous award without delay.
IAM and IFPTE combined represent 55,000 workers at Boeing.
If Seattle-based Boeing had been awarded the air tanker deal, it would have supported at least 44,000 new and existing jobs in the United States, many of them good union jobs, as well as more than 300 suppliers in 40 states. But under the EADs contract, only a few thousand lower-paying nonunion jobs will be created.
Defense expenditures are required to comply with federal Buy American Law provisions, which stipulate purchasing certain products from U.S. companies when possible. But the Bush administration has granted more waivers of the Buy American provisions than any administration in history.
The non-binding GAO report cites a number of significant errors by the Air Force that could have affected the outcome of what was a close competition between Boeing and EADS.
We recommend that the Air Force reopen discussions with the officers, obtain revised proposals, re-evaluate the revised proposals and make a new source selection decision consistent with our decision.
Read the GAO’s statement here.
Time magazine reported in March that the presumptive Republican presidential nominee, Sen. John McCain, was a “key figure” in the Pentagon’s attempt to complete the tanker deal. According to the news magazine, McCain wrote letters and pushed the Pentagon to change the bidding process so that Airbus’ government subsidies could not be considered when deciding to whom to award the contract.
This placed Boeing, which receives no subsidies, at a clear disadvantage and conflicted with U.S. trade policy. In fact, the United States currently has a complaint before the World Trade Organization (WTO), charging unfair trade practices resulting from Airbus’s illegal subsidies. Click here to read the Time article.
In a statement, Sen. Patty Murray (D-Wash.) says:
The Air Force bought a tanker that doesn’t meet their needs and has been waging a PR campaign ever since. Just last week the Air Force admitted that it had made large scale errors regarding the cost of the Airbus and Boeing proposals. But for the past three months the Pentagon has refused to account for how this competition was decided. Official after official has stonewalled all efforts by Congress to get to the bottom of it. It is time for real answers to hard questions.
Sen. Maria Cantwell (D-Wash.) says the GAO criticisms are a “scathing indictment of the Air Force’s process.”
Congress needs to investigate the way in which our federal agencies award contracts and ensure taxpayer costs and national security issues are paramount in all procurement decisions.
The GAO decision comes about a week after we noted a new report compiled by the IFPTE, which highlights the corrupt bid-awarding process involved and found the EADS fleet will cost taxpayers money and is likely less safe than the Boeing model. IFPTE found the Boeing model could save taxpayers $90 billion over the program’s lifetime.Here are a few of the report’s findings:
- The contract to EADS could cost U.S. taxpayers as much as $30 billion in unneeded costs.
- Known as the KC-30, the aircraft EADS is less capable, can land in fewer bases and is more vulnerable to being downed by enemy fire.
- The KC-30 is being financed with illegal subsidies, according to a near-unanimous consensus of legal experts in the United States and leaders of both political parties.
- The U.S. Defense Department made questionable midstream changes in the procurement criteria that it has not explained to Congress to date.
- EADS won exemptions from key national security laws, including those that restrict the export of sensitive military technologies developed with U.S. funds.
- EADS has very questionable relationships with Iran, Russia and others that should be of concern to policymakers tasked with protecting our national security.
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As a retired AF Logistics Officer, I have followed this selection process from day one, and must admit that, being from Alabama, I was not greatly saddened by the KC-45 selection, but when I read that the selection was partially based upon the larger size of the Air BUs entry, my first thought was, jeepers, if Boeing had been told that a larger airplane was required they could have submitted one of their larger models. As Lewis Carroll had Alice say, “this whole affair is getting couriser and couriser”. Taylor