Pentagon Reopens Bidding on Tanker Contract

Pentagon Reopens Bidding on Tanker Contract

By John J. Kruzel
American Forces Press Service

WASHINGTON, July 9, 2008 – The Defense Department has reopened the bidding process for a multibillion-dollar midair refueling tanker contract, Defense Secretary Robert M. Gates said today.
The announcement comes after the Government Accountability Office last month found improper practices related to the $35 billion contract awarded in February to the Northrop-Grumman/EADS/Airbus consortium, which prompted a protest from rival bidder Boeing Company.

“Industry, Congress and the American people all must have confidence in the integrity of this acquisition process,” Gates said at a Pentagon news conference. “I believe the revised process will result in the best tanker for the Air Force at the best price for the American taxpayer.”

Replacing the Air Force as the “source selection authority” is John Young, undersecretary of defense for acquisition, technology and logistics. He is tasked with appointing an advisory committee to oversee the selection of a bidder to supply the modified commercial aircraft fleet that will phase out the current KC-135 tankers, which are 47 years old, on average.

The Defense Department has ordered Northrop-Grumman to stop work on its contract, and a modified request for proposal could be issued as early as this month. The tanker request will remain in “open competition” until a new contract is awarded, which Gates said he expects will happen before year’s end.

“It is important to remember that this decision does not represent a return to the first step of a process that has already gone on far too long,” the secretary said, referring to the tanker contract as one of the department’s most “time-critical.”

The Boeing protest filed early this year alleged more than 100 violations of proper contracting practices, eight of which were sustained by the Government Accountability Office, the investigative arm of Congress.

To mitigate the chance of a future protest, the Defense Department will carry out the new process with transparency, open communication, clear expectations and fairness, Gates said.

“My hope would be that when we reach the end of this process we will have a solution, will be able to reward a contract and get moving with the contract,” he said.