About an hour ago, the Government Accounting Office upheld an objection by Boeing to the Air Force award of their air tanker refueling program to Northrup-Grumman. This ruling is yet the latest round in a battle that has raged in Washington for quite some time now over who will get to built America’s next air refueling platform.

Our in-flight refueling capability is second to none in the world. As America’s bases are more and more in jeopardy from host-country denial of use, the ability to fly around the world and drop bombs on bad guys becomes more important. In the last two conflicts, sorties were flown round-trip from bases deep within the United States. In order to do that, we need a network of tankers with fuel to refuel our birds as they travel from point to point over the world. For the last 50 years, the United States has been using the KC-135 variant for refueling. This plane was developed by Boeing and was visually similar to the 707.

For the past seven or so years, the Air Force has been trying to replace its aging fleet of KC-135’s. In 2002, Boeing was awarded the contract to replace part of this aging tanker fleet - the KC135E. It was to build 100 tankers for the Air Force using the 767-200 (pictured above). The program officially was designated as the KC767A1. This contract, however, came under significant suspicion when the primary procurement officer, Darleen Druyun, plead guilty to favoring Boeing in several of the Air Force’s contracts in hopes of securing employment. One of those contracts was the KC135E replacement program.  Druyun was the number two procurement officer for the Air Force - so her guilty plea was a big deal. I can tell you as a former political, Druyun’s screw up placed significantly more regulation on all of us as politicals, including a rather explicit and lengthy briefing as to how one could obtain post-government employment and the extent to which one was banned in soliciting the government once you left service. I support all of these measures mind you - but I found it ludicrous then and now that somehow Mrs. Druyun thought what she was doing was okay. For her penance - she paid a minor fine and did 9 months in a minimum security prison, followed by home detention.

Okay so back to our story - so Druyun tanks (pun intended) the Boeing contract when she pleads guilty. The Air Force suspends the program and no tankers get built. Then in 2006, the Air Force essentially recompetes the program and the main competitors are Boeing and Northrup Grumman. This time, Boeing loses, and Northrup gets the contract. The plane is called the KC-45A.

Now, here’s the wrinkle. Northrop’s proposal to build the KC-45A is actually based on a partnership with the most evil people on the planet (as far as many Congressmen seemed to be concerned) THE FRENCH! Yes, that’s right you heard me, the French. Northrup partnered with EADS - the European Aerospace Defense and Space Community. This group is a major international competitor of Boeing. The KC-45A is essentially going to be an Airbus design that has been adapted for air refueling missions.

Needless to say - Boeing (and Congress) cried foul.

Congress had a ton of hearings on the “buy America act” and moaned fiercely about how could the Air Force grant the contract to the French and the Germans. They argued that essentially Northrup was a shill for the deal and that the real builders were EADS (probably true in all reality). Even if that were the case, as I pointed out to a friend of mine who was a staffer on the SASC, it doesn’t matter. The “Buy America” act doesn’t exempt our NATO allies in procurement. Eventually when the tanker deal didn’t catch the political whimsy of the American public - Congress dropped the deal.

Boeing didn’t. They filed a grievance and contested the award.

According to today’s GAO ruling, they stated:

Our review of the record led us to conclude that the Air Force had made a number of significant errors that could have affected the outcome of what was a close competition between Boeing and Northrop Grumman. We therefore sustained Boeing’s protest.

The full review was not made public, citing among other things that proprietary information was used in making the review and that revelations of such would compromise the trade secrets of each firm. Thus, it may be awhile before we actually know the full scoop on all of this.

The final recommendation on the deal was… yes, you guessed it - recompete the contract.