Lawmakers Criticize Bid for $35B Tanker Contract

Lawmakers from Washington to Alabama are raising serious concerns over a troubled $35 billion tanker competition between rivals Boeing Co. and Northrop Grumman Corp.

In separate letters, both Sen. Richard Shelby, R-Ala., and Rep. Norman Dicks, D-Wash., representing competing interests and thousands of jobs in their districts, expressed concerns over the Air Force's draft request for bids to build 179 aerial refueling tankers that was issued last month.

Los Angeles-based Northrop and its partner, Airbus parent European Aeronautic Defense and Space Co. NV, are competing against Chicago-based Boeing for the third time to replace the aging refueling tankers.

Should Northrop and EADS win the lucrative deal, a new plant will be built in Mobile, Ala., while states like Florida and West Virginia could also stand to gain jobs. If Boeing lands the award, Washington, Kansas and other states would benefit from a boost in jobs.

Boeing supporter Dicks is questioning the Air Force's decision to cite a specific fuel offload rate in its bid request — which happens to be the same rate that Northrop has advertised as being able to offer — when the rate hadn't been specified in earlier draafts.

Dicks and other Washington state lawmakers also are concerned that the Air Force won't be required to consider the World Trade Organization's interim ruling last month which found that Airbus received illegal subsidies in the form of EU loans. Dicks thinks that shows a bias for rival Northrop's offering, according to his letter to Shay Assad, director of defense procurement, on Tuesday.

Dicks warned that unless the Pentagon fixed the draft it would risk the "same disastrous outcome that doomed the previous source selection."

The Pentagon has tried and failed twice to award a contract to replace its Eisenhower-era fleet of tankers that refuel military planes in flight. The last attempt in early 2008 was overturned on appeal and led Pentagon leaders to temporarily revoke the Air Force's authority to award a contract. The 2004 award to Boeing was undone by an ethics scandal that resulted in prison terms for a former company executive and a former high-ranking Air Force official.