5 Minute Delay Scuttles Chance at $40 Billion Air Force Deal

Aug. 7, 2010— -- Somehow, against all odds, the already-surreal competition to build America's next fleet of tanker planes just got sillier and more venal. A tiny, troubled aerospace firm and its Ukrainian partner have been disqualified from the bidding because they handed in their proposal five minutes too late. The companies, for their part, insist that their messenger had a few minutes to spare.

For at least a decade, the Defense Department has been trying to replace its creaky cadre of Eisenhower-era refueling aircraft — the planes that keep the entire American fleet flying. A combination of corruption, jingoism, political preening, lack of will and sheer incompetence has kept Washington from accomplishing what should have been a relatively straightforward task. (Compared to, say, fighter jets, these tankers are technically simple.)

In 2003, the Air Force gave Boeing a $20 billion deal to lease some tankers. But the contract award process turned out to be beyond-shady; the deal was canceled.

In 2008, EADS and Northrop seemingly beat out Boeing in a fair fight, winning up to $40 billion in business. Then the Government Accountability Office ruled that the competition wasn't so fair, after all.

The ongoing drama has been manna for journalists and publishers, as Nathan Hodge recently pointed out. Not only has the tanker saga included everything from back room deals to dramatic reversals to heated Congressional hearings to military officials going to the pokey.

The two main competitors, Boeing and EADS, also indirectly subsidized with their advertisements and marketing just about every defense industry publication around.

Then, on July 2nd, just when the steel cage match between Boeing and EADS looked like it might be heading for some sort of final resolution, into the octagon stepped a third wrestler.

Tiny California firm U.S. Aerospace said it would enter the tanker throw-down by partnering up with Antonov, a Ukrainian plane-maker. Never mind the SEC report that noted regulators' "substantial doubt about the [U.S. Aerospace's] ability to continue as a going concern." Never mind that the tag team wasn't sure which plane it would modify for tanker duty, even though bids were due just a week hence.