March 4, 2008
By John M. Donnelly, CQ Staff
Angry lawmakers promised Monday to delay or even overturn the Air Force’s award of a multibillion-dollar contract for new tanker aircraft to a U.S.-European consortium.
Members of Congress from Kansas and Washington state, where Boeing Co. had hoped to build its own version of the tanker, have been up in arms since Feb. 29, when the Air Force announced it would award the $35 billion contract to a team led by Northrop Grumman Corp. and EADS North America, an arm of Airbus’ European parent company.
Meanwhile, Alabama’s two Republican senators took to the chamber’s floor to defend the Air Force’s decision, which Northrop Grumman has said will create as many as 25,000 jobs in the United States. Many of those jobs will be in Alabama, where EADS North America has begun building manufacturing sites for the tanker planes.
Boeing’s allies in Congress have only begun to draft their legislative responses, and the scope of the backlash is not yet clear. But on Monday, the aggrieved lawmakers vowed to pass legislation that would halt work on the contract until Congress receives an independent cost estimate of the winning bid.
They said they were considering another measure that would prohibit awarding such contracts to foreign companies that have been accused before the World Trade Organization (WTO) of receiving government subsidies. They plan to seek data from the Air Force about the bidding and are urging hearings on the subject.
House Speaker Nancy Pelosi, a Democrat from California, issued a statement Monday urging rigorous oversight of the deal.
Three Kansas Republicans who are among Boeing’s most outspoken champions in Congress — Sens. Pat Roberts and Sam Brownback and Rep. Todd Tiahrt — made clear they were girding for a fight in interviews Monday after a briefing by Ken Miller, a special assistant to Air Force Secretary Michael Wynne.
“I’m mad; we’re all mad about this,” said Brownback. “We don’t think it’s in the best interest of the country. There are going to be lots of hearings about this.”
“This is like ‘Alice in Wonderland,’ ” said Roberts. “We have a serious difference of opinion on this.”
Pelosi Voices Concern
Pelosi said the award “raises serious questions that Congress must examine thoroughly.” The questions, she said, include: “What are the national security implications of using an aircraft supplied by a foreign firm for this essential mission? Were the risks associated with choosing a conceptual design over a proven capability properly assessed? Was sufficient consideration given to the impact of the contract award on jobs in America and on our technological base?
“Given the ramifications of this decision for the United States, the Air Force must explain to Congress how it meets the long-term needs of our military and the American people,” Pelosi said.
Boeing has built the U.S. military’s air tankers until now, and many industry analysts expected the company to win the Air Force contract.
The Air Force is scheduled to brief Boeing officials on March 12 about why the U.S. aircraft giant lost the competition. Afterward, Boeing is expected to signal whether it will protest the decision to the Government Accountability Office.
Lawmakers representing Kansas and Washington, however, were quick to threaten legislative and other steps to halt or reverse the award.
After Monday’s briefing, Tiahrt, a member of the House Appropriations Subcommittee on Defense, noted that Boeing had to cover health and other costs that the Northrop Grumman-EADS team did not, but the Air Force did not appear to consider the discrepancy when weighing the prices offered by the two companies. Tiahrt also cited government subsidies given to European companies.
The process was “biased toward foreign companies,” he said.
But Alabama’s Republican senators focused on the domestic jobs the Northrop Grumman-EADS contract would create.
“Any assertion that this award outsources jobs to France is simply false,” said Richard C. Shelby.
Added Jeff Sessions: “The truth is, it’s going to be built in the United States, in Mobile.”
Tiahrt and his colleagues planned to seek more data on the competing bids from the Air Force.
Meanwhile, Tiahrt hopes to add a provision to the fiscal 2009 Defense appropriations bill that would require an independent assessment of the two firms’ cost proposals for the project. He said the provision would also bar the tanker contract from going forward until the study is complete.
Reviving a ‘Buy American’ Measure
Tiahrt said he and his allies were also considering legislation that would forbid Pentagon contracts from being awarded to companies accused before the WTO of receiving illegal subsidies.
The U.S. Trade Representative has filed such a complaint against Airbus, and the European Union has a competing one against Boeing.
Three years ago, the House passed a fiscal 2006 defense authorization bill that included such a provision, but it was eliminated in the House-Senate conference on the measure.
On Monday, organized labor weighed in as Richard Michalski, general vice president of the International Association of Machinists and Aerospace Workers, advocated a similar proposal.
“I am calling on Congress to pass legislation that requires the U.S. Trade Representative to certify to the U.S. secretary of Defense that bidders for defense contracts be free of illegal subsidies,” he said.
Source: CQ Today Print Edition
