Posted on 12/21/2010 8:01:29 PM PST by sukhoi-30mki
Bill complicates Air Force contract
By JEN DIMASCIO | 12/21/10 6:38 PM EST
The House on Tuesday approved an 11th-hour measure that supporters of the European Aeronautic Defence and Space Co. complained could delay the already long-running competition to make $35 billion in new aerial refueling tankers for the Air Force.
Rep. Jeff Miller, R-Fla., who’s backing the EADS bid, said he and other supporters were caught off guard by the vote in the waning hours of this lame-duck session of Congress.
“Boeing wants to have a leg up in the tanker negotiations, and they have been trying the entire Congress to have this piece of legislation passed,” Miller said, dismissing the measure as the “Boeing Preservation Act.” “Unfortunately, the Democrats chose to use the waning hours of the 111th Congress to pass it.”
It’s unclear, though, whether the House bill will be considered by the Senate.
The Defense Level Playing Field Act introduced by Washington Democratic Reps. Jay Inslee and Rick Larsen requires the Defense Department to “take into account” any potential unfair advantage borne by either contractor in the competition.
“Passage of this tanker legislation continues to put pressure on the Pentagon to do the right thing and give our American workers a fair shot at competing for the KC-X aerial refueling tanker,” said outgoing Rep. Todd Tiahrt (R-Kan.). “Congress is sending an important message to the administration and the Air Force that we will not tolerate turning a blind eye to illegal foreign subsidies and giving foreign workers a competitive advantage over American workers.”
The bill passed by the House Tuesday had been in its version of the defense authorization bill but was one of many provisions stripped from it to speed passage by year’s end. The bill is a less aggressive version than one proposed earlier this year; it doesn’t require the Pentagon to take any action, rather mandating that Congress receive a report on “any unfair advantage any competitor may possess.”
But should Boeing lose the competition, the act would provide the company’s supporters with documentation about how the Pentagon did, or didn’t, consider the affect of subsidies ruled illegal by the World Trade Organization.
Miller worries that if the bill becomes law, it would further slow the contract award.
“To move the goal post again when we are just about to come to the end of the process is really like changing the location of the Super Bowl the week before the game,” he said.
Last week, Sen. Patty Murray (D-Wash.), along with Sens. Maria Cantwell (D-Wash.), Pat Roberts (R-Kan.) and Sam Brownback (R-Kan.) appealed to the Senate Armed Services Committee to include the same provision in the defense authorization bill, which is stalled in the Senate.
But that’s not likely to happen, according to committee spokeswoman Tara Andringa.
“The defense bill can’t be altered in the Senate because then it would need to be passed again in the House,” Andringa said, “and we are running out of time.”
EADS won it fair and square.
While the subsidies argument is not without logic, Boeing could find itself in a soup if the WTO were to rule against subsidies it has received. All EADS needs to do is keep the KC-X competition in limbo.
http://articles.latimes.com/2010/sep/15/business/la-fi-boeing-wto-20100915
“EADS won it fair and square.”
I am uncertain about the fairness of the competition and the Air Force’s judgment. The Air Force reopened competition after the EADS partner failed to submit a bid. The bidding process should have been closed after the time period expired. The bid was not submitted because the EADS partner felt that it could not win. After the bidding period was extended, EADS submitted a bid without a North American partner. Now leaked documents indicate that the Air Force favors the EADS submission. Something strange has happened in the extending the bidding period and evaluation of the proposals.
I think that the Air Force should split the bid. Both airplanes have distinct advantages. I am not sure why the Air Force seems to favor the EADS plane. Splitting the bid would provide the advantages of both planes.
Boeing can’t even get the Dreamliner ready for sells. How many decades would it be before we would see one of their tankers in the air if they were to get the contract?
Probably because John McCain hates Boeing.
Maybe the USAF’s choice has to do with the fact that the only KC-767 contracts were for countries (Japan and Italy) with extensive industrial invovlement in the programme. Both contracts have faced significant delays and the aircraft on offer is not even close to the variant proposed to the USAF.
The Airbus has won at least four contracts (UK, Australia,Saudi Arabia and UAE) since it’s been offered for export, with the possibility of a fifth one (Brazil)
It would also mean training mechanics on two different airplanes, and maintaining two sets of spare parts in the logistics system. It also means that we'd get fewer economies of scale, since we'd be buying fewer of each airplane. For each airplane, we wouldn't get as far down the learning curve as we would if we bought only one. All this has to be weighed against the advantages of having two types of airplanes.
Unfortunately, when politics enters the picture, such things tend to get ignored.
You make a good point. I am not sure about the numbers so a single plane may be necessary. From the analysis that I have read, it seems that the Air Force has discounted the strengths of the Boeing plane.
I think Boeing can get an exisitng airplane out the doors of an existing factory with existing workers, faster than EADs can get one out of a factory that doesn’t exist with a workforce yet to be hired and trained.
You must not be taking the Boeing unions into consideration. Them and their strikes throw monkey wrenches into all their plans.
The unions are very much interested in keeping the 767 line open.
What do you think about EADs unions?
Let me know when they go on strike.
So it is OK for foreign govenrmetns to illegally subsidize (according to the WTO) a company and they can use that to undercut US companies driving some out of business (MD/Lockheed). Then use those same subsidized products to get military contracts.
That's alright as long as it punishes unions.
(and before you bring up the WTO decision against Boeing, they found EADS had received $20B in illegal subsidies and Boeing $2B) Of course I am sure you would be a strong advocate for Boeing to go to the government and ask for the same kind of “repayable” launch aid that Airbus gets.
You can add up the subsidies any way you want. This is all political drivel. So, if the French pay a lower salary are you going to say that is unfair? In other words, we shouldn’t be purchasing anything from other countries because they don’t have the same standard of living as we do. Right?
YES YOU ARE EXACTLY RIGHT.
If anybody else can do it cheaper than Americans, we should buy all of our products from them. There is no reason to ever buy a product from an American company.
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