Skip to comments.Pentagon to extend bidding deadline for $35B tanker contract
Posted on 03/31/2010 4:26:43 PM PDT by jazusamo
The Pentagon announced on Wednesday that it would extend the bidding deadline for the Air Force's new refueling aircraft by 60 days if EADS North America formally notifies the Defense Department that it wants to compete.
The move, announced by Pentagon press secretary Geoff Morrell, could essentially allow EADS North America to compete for the lucrative contract against Boeing. EADS is a European conglomerate that serves as the parent company of Airbus, which is headquartered in France.
The Pentagon's announcement comes a day after President Barack Obama addressed the tanker competition in a press conference with his French counterpart Nicolas Sarkozy.
Obama pledged that the selection process would be free and fair and Sarkozy said he trusted Obama's assurances. Obama, however, stressed that the decision with regards to Pentagon contracts lies with the secretary of Defense.
European leaders had criticized the U.S. procurement process after Northrop Grumman dropped out of the bidding for the tanker, but Morrell said that politics did not play a part in the Pentagon's decision process.
That could not be further from the truth, he said.
EADS, Boeings rival on the commercial aircraft market, has been mulling a solo bid for the $35 billion contract.
EADS was partnered with Northrop Grumman, but Northrop Grumman officials decided to withdraw from the competition, arguing that the selection process favored Boeing.
Boeing's congressional supporters are likely to be inflamed at the Pentagon's decision that would allow EADS to compete. They have already taken shots at the European conglomerate over government subsidy issues and have argued such subsidies allow EADS to have an unfair advantage on price.
One supporter of Boeing, which has been in a years-long battle with EADS and Northrop Grumman over the contract, quickly charged the administration with caving to the French.
"It is outrageous that the Obama administration has caved to European lobbying one day after meeting with French President Nicolas Sarkozy," said Rep. Todd Tiahrt (R-Kansas), a prominent Boeing supporter.
He said the Pentagon should "reverse course" and stop "placating the Europeans," who he said had provided subsidies to Airbus.
"I will continue to put pressure on the Defense Department to stick to its original timeline," he concluded. "A sixty-day extension is unacceptable and will be met with much opposition in Congress."
Another Boeing supporter, Sen. Maria Cantwell (D-Wash.), also criticized the decision.
"I see no reason why a 60-day extension in the bidding deadline is necessary," Cantwell said in a statement. She said she was even more concerned that the Pentagon's request for proposals on the tanker contract does not account for subsidies European nations provide Airbus.
The U.S. and European Union are involved in a long-running fight at the World Trade Organization over subsidies the two sides allege are provided to Airbus and Boeing.
The Pentagon's announcement was not immediately hailed by EADS.
EADS spokesman Guy Hicks said in a statement the company will assess the Pentagon's 60 day offer. Hicks indicated that 90 additional days were minimum the minimum time necessary for EADS to prepare a "responsible proposal" for the contract.
EADS officials then indicated they were interested in staying in the competition, but said that they could not do so without an extension to the deadline for submitting the bids. EADS asked the Pentagon for a 90-day extension after the initial deadline of May 10. The Pentagon agreed to extend the deadline by 60 days instead of 90.
Morrell called the extension to July 9 a reasonable amount of time. He stressed that the Pentagon is willing to compress the evaluation period to still be able to select a contractor for the much needed tankers.
This program is long overdue, Morrell said at a Pentagon press briefing Wednesday.
Northrop teamed with EADS won the contract for the tankers in February 2008. Boeing successfully protested that award with the Government Accountability Office.
Subsequently, Defense Secretary Robert Gates decided to start a new competition. Northrop withdrew from it at the beginning of March arguing that the selection process favored Boeing.
Really bending over backwards to make sure a non-US company wins this contract, ain’t he?
Obama surely is, his meeting with Sarkozy yesterday and this being announced today is astounding.
I do work in the Defense industry and my Company has interest in this contract.
If it’s not Boeing we’re not going.
I have not taken sides on this even though I live in WA. The entire process has been a fiasco with plenty of blame to go to all involved. The Air Force needs tankers and for EADS to step in now is unbelievable to me.
Maybe if Obama keeps fiddling around long enough, he can just cancel the whole thing. Why do we need refueling tankers when he’s planning to eliminate our bombers and fighters?
From the reports I've been seeing the Air Force has been begging them to bid in a CYOA move...I hate to see this because I retired from the Air Force...Boeing has this contract in the bag already just going through the motion.
No matter what happens the next taker will be a Boeing even if it built in China...
You’re correct, doing away with refueling tankers would go a long way in dismantling our military which looks like he’s determined to do.
I tend to agree with you, I just wish they’d get moving. :)
The Air Force is going to request for bid for a CSAR-X or personnel recovery recapitalization aircraft (Helicopter) within a few months...My money is on Boeing to get this one also...
At breakfast with the CSAF yesterday, the Chief addressed the question of an RFP extension.
He said the Air Force would consider extending the RFP date IF EADS was serious. The point is, if EADS is serious, meaning capable and ready to make a serious bid that meets the RFP section L and M requirements, then the Air Force would be open to receiving the bid. The Chief did not go any deeper than that.
To think extending the deadline is done easily as a CYA, that isn’t accurate, as the Chief made clear, as the AQP staff made clear during discussions later that day.
Here’s the problem. The Air Force really needs EADS to bid to prevent Boeing from putting the screw to the Air Force on price. However, the politics strongly favor Boeing, and EADS does not want to waste $$millions preparing an RFP response just to help the Air Force get a lower bid from Boeing.
And I do believe it's a CYOA move been watching this going on for over three weeks...Seen this same song and dance from the AFMC Commander (4 Stars) to move an entire Test Wing not so far from where he was retiring...And it was determined that there was no conflict of interest...
Not really. DoD can decide to sole source the contract if it deems that sole source if it deems that there are no competent competitors, or that the competitors may pose procurement risks, like being foreign source would.
Why has Lockheed stayed away from this bid?
Here's the catch...Obama ran on a campaign against "No-Bid" or "Sole-Source" Contracts ala Halliburton...Looks like the Pentagon needs a second bid as not to upset the One...Politics has been in play in the KC-X process since day one. I am thinking this is upsetting a few Acquisition wonks because Northrop Grumman-EADS isn't playing along.
I've been watching this process going on for three weeks. This report could of been written three weeks ago and it will still be rehashed over and over again til May 10th, when the contract will be awarded.
Is this a slap to Boeing for announcing a $150M writeoff today due to the Health Care Bill?
I would say doubtful with most presidents we’ve had but with Obama nothing surprises me any longer, he definitely likes to show everyone he won.
Because, perhaps, there wasn't. 4-star retirement means consultant which equals first-class travel at the time and place they want, and that means consultant fees start when they walk out the door. Wing from where to where? What were the differences between the airspace/range requirements/restrictions of the old location vs the new location (which test wing). And a 4-star, a single 4-star has not the juice to move unless it is justified, as any construction expenditures over 200K must be approved by congress.
The Air Force will consider moving the RFP date if EADS is serious and not just playing some silly game.