April 14, 2016
auditors’ latest update on the KC-46A might
tempt one to think, “Hey -- here’s a Pentagon procurement that works.”
The Government Accountability Office
reports that for the third consecutive year, Boeing’s “widebody,
multirole tanker” has “reduced its acquisition cost estimate.” The
total-spending projection “has decreased $3.5 billion or about 7 percent --
from $51.7 billion to $48.2 billion -- since the program started in February
2011.” The KC-46A’s managers, at Wright-Patterson
Air Force Base, believe that their contractor “will meet performance
goals.” The GAO’s glowing report card is due, in part, to “stable requirements”
and “fewer than expected engineering changes.”
news. But let’s look at a little history.
December 2001, conservative journalist Robert Novak highlighted remarks Sen.
John McCain (R-AZ) made before a “deserted Senate and an inattentive nation.”
The solon was enraged over an attempt to use “the Department of Defense as an
agency for dispensing corporate welfare.” As described by Novak, the no-bid
plan was to have the Air Force “lease 100 of Boeing’s 767 airliners and return
them 10 years later to the airplane manufacturer, with the U.S. taxpayer paying
for conversion to military tankers and reconversion back to civilian
opposition quickly coalesced, with Citizens Against Government Waste, Public Citizen,
Americans for Tax Reform, the Congressional Accountability Project, the
National Taxpayers Union, the Project on Government Oversight, and Taxpayers
for Common Sense signing a letter that decried “this specific siphoning of
taxpayer money to the Boeing company.”
sweetheart deal -- crafted even before 9/11 decimated Boeing’s 767 sales --
proved tough to kill. One guess as to where the Evergreen State’s
congressional delegation stood. Speaker
of the House Dennis Hastert (R-IL) was a fan. So was Deputy Defense
Secretary Paul Wolfowitz. It took almost two years to reach a buy 80/lease 20
compromise. By then, a senior
Air Force acquisition officer involved with the imbroglio, who had since gone to work for Boeing, was under suspicion. She eventually pleaded guilty to
one count of conspiracy, and received a prison sentence, for negotiating a job
with her soon-to-be-new employer at the same time as Boeing was pursuing its
original lease contract.
Defense Secretary Donald Rumsfeld scrapped the buy some/lease some deal. RFPs
were requested in 2007, with Boeing and a partnership between Northrop Grumman and
Europe-based Airbus submitting bids. In 2008, Boeing lost. Predictably, the
company’s powerful congressional patrons, with the assistance of the International
Association of Machinists and Aerospace Workers, launched a paroxysm of
patriotic poppycock. And Boeing formally protested the DOD’s contract award.
in The Washington Post, far-left columnist
warned that reversing “this contract decision would set a terrible precedent.
It would signal to allies that while their governments are expected to buy our
stuff, we won’t buy theirs. It would mean that Boeing would become the monopoly
supplier of transport planes to the U.S. government, with the power to dictate
prices and terms. And the message it would send to every contracting officer in
every government agency is that if they know what is good for their careers,
they will put political considerations ahead of getting the best value for the
The Wall Street Journal’s editorial page agreed: “The
Pentagon’s job is to defend the country, which means letting contracts that
best serve American soldiers and taxpayers, not certain companies. Defense
Department rules explicitly state that jobs cannot be a factor in procurement
and that companies … must be treated as if they are U.S. firms in contract bids.
Such competition ensures that taxpayers get the best value for their money and
soldiers get the best technology.”
GAO sustained Boeing’s protest, on technical grounds. (Auditors stressed that
their finding “should not be read to reflect a view as to the merits of the
firms’ respective aircraft.”) The Pentagon wasn’t obligated, but it agreed to a
rebid, then delayed the competition until after the 2008 presidential election.
Boeing whined about not having enough time to prepare a fresh proposal. Northrop
Grumman walked away, leaving Airbus on its own.
DOD made the “right” decision. It went with the “American” company.
Airbus declined to protest. Boeing’s had some hiccups along the way, but it is
scheduled to deliver 18 planes by August of next year.
corruption, incompetence, protectionism -- it’s been a decade and a half of
constant embarrassments for the effort to modernize Washington’s geriatric
fleet of aerial refueling tankers. For now, the program seems to be on track.
It’s about time.
D. Dowd Muska (www.dowdmuska.com) writes about government, economics, and technology. Follow him on Twitter @dowdmuska.
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