In February, the Air Force awarded a $40 billion contract to a partnership headed by Northrop Grumman Corp. to build a new air refueling tanker, essentially, a flying gas station. The new plane would replace an aging fleet of tankers that are nearly 50 years old.
Boeing Co., which lost the bid to Grumman, protested, saying that the way the Air Force evaluated the bids was unfair and that its conclusions about costs and technical criteria were flawed. The General Accountability Office, which evaluates bid protests, sided with many of Boeing's objections in a decision released Wednesday. It said that the Air Force "made a number of significant errors that could have affected the outcome" of the tight race.
The green eyeshade guys at GAO recommended that the Air Force reopen discussions with the bidders, obtain revised proposals, re-evaluate them and make a fresh decision.
GAO's ruling is not binding on the Air Force, but given its finding of significant errors, the Air Force would be irresponsible to the taxpayer, the service and these two American companies if it declined to follow GAO's recommendations.
About those two American companies. The partnership led by Grumman includes the European Aeronautic Defence & Space Co., the parent of Airbus. Much of the plane that Grumman is trying to sell would actually be built in Europe, not the United States, though it would be assembled in Alabama. This battle, then, pits Boeing and Airbus, the two great international rivals in the construction of passenger airliners. The tankers are modified versions of passenger aircraft.
Of course, the decision has huge implications for American jobs, because the Boeing plane would be built in the United States. That must be weighed against the nation's commitment to global trade with the European Union.
It seems axiomatic that the U.S. defense industry should be based at home, unless the Air Force can demonstrate that Airbus will provide a markedly superior aircraft. But until the Air Force manages to conduct a balanced, fair bidding process, we cannot know the answer to that question.
The Air Force needs to start this flying circus over again.
