Prospect of congressional interference in tanker contract sparks concern

If Congress overturns a controversial $40 billion tanker refueling contract, the ripple effects for the federal acquisition community could be widespread, procurement specialists say.

Since the Air Force announced in February that it had chosen the Northrop Grumman-EADS team to build a fleet of midair refueling tankers, a growing chorus of legislators have vowed to scuttle the deal and ensure that the contract is awarded to Boeing Co., the losing firm.

House Defense Appropriations Subcommittee Chairman John Murtha, D-Pa., threatened during a hearing in early March to "stop the money" for the contract. Rep. Norman Dicks, a Democrat from Washington whose district would see an influx of jobs if Boeing won the contract, argued that "we're going to start this thing over."

Others have focused their resistance on EADS, the French-based parent company of Airbus. Rep. Todd Tiahrt, R-Kan., said "we should have an American tanker built by an American company with American workers," and Rep. Duncan Hunter, a Republican from California, argued that the decision would hurt "national security interests."

Last week, Boeing protested the decision, asking the Government Accountability Office to review the Air Force's decision, likely heading off any congressional intervention until the watchdog rules on the case.

If GAO upholds the decision, Congress has the power to cancel funding for the project or direct program funds to Boeing through an earmark. But such a move, contracting experts said, would be virtually unprecedented and could spark a wave of unintended consequences.

"This is something that sends a shot across the bow for any contracting officer involved in a high-stakes procurement," said Larry Allen, president of the Coalition for Government Procurement, a contracting trade group that counts Northrop among its members.

If Congress were to reverse the decision, the door for increased legislative interference could swing open, Allen said. He imagines a scenario in which members could then dictate which veteran-owned business has the best crop of former soldiers on their payroll and therefore is best qualified to win a contract.

European governments and other global trade partners could be less willing to buy products from American contractors if they feel discriminated against, Allen said.

"There are rules and regulations and contracting officers should follow them, and Congress should allow them to follow them," Allen said. "Contracting is not glamorous. And, when you don't pay attention day in and day out to contracting until something like this comes across your desk, then you end up with 535 experts."

Congress has been careful not to criticize the Air Force's contracting staff, except for a few specific complaints -- Dicks, for example, said the service changed its criteria during the selection process. Lawmakers accepted that the service was hampered by prohibitive acquisition restrictions. The Federal Acquisition Regulation prohibits the government from considering job growth or a reliance on foreign subsidiaries during their evaluation.

"I look to the legislative branch to write the laws of this country, and I am sworn to enforce the laws," said Sue Payton, the Air Force's assistant secretary for acquisition at the Defense Appropriations Subcommittee hearing.

But, those familiar with the FAR's complex guidelines said Congress would be wise to leave contracting decisions to the experts.

"The government has able and well-skilled people whose goal it is to make the best decisions possible based on best value," said Allan Burman, president of Jefferson Solutions, a Washington consulting firm. "This would add a whole other element to government policy after the fact. There are risks associated with proceeding down this path."

Burman fears that the contracting workforce -- already depleted and juggling a growing number of projects -- could begin to worry about the political repercussions of their decisions.

"In the past, Congress has been loath to get involved in contractor decisions," said Burman, who served as the administrator of federal procurement policy for the Office of Management and Budget during the Clinton administration. "But, this would add a level of uncertainty with how agencies are making these decisions; uncertainty that does not currently exist."

Neither Allen nor Burman could recall Congress ever overturning a contracting decision and awarding the deal to the losing firm.

OMB officials would not comment on the prospect of congressional intervention, stating through a spokeswoman that GAO "is well-suited to examine thoroughly the Air Force's decision."

Not all contracting experts, however, believe the dispute will have such far-reaching implications or that Congress should stay out of the process.

Frank Spampinato, chief acquisition officer for the Energy Department, said most contracting officers are exceedingly professional and recognize that their decisions must be based only on criteria listed in the RFP, without accounting for the type of intangibles Congress is permitted to consider.

"I would, and I hope most others would, see this as an isolated incident," he said. "Normally, I would say Congress should never interfere with a contract award. Where do you think all the rules and regs that are currently on the books have come from anyway? Congress. So to say, 'follow our rules' and then say, 'unless,' is just ridiculous, in most circumstances."

But, Spampinato views the tanker contract as an extraordinary situation in which EADS received an unfair advantage because it receives foreign subsidiaries and tax breaks, not afforded to Boeing. He said Congress should intervene to correct an inequity built into the system.

"I don't believe that this is something that should concern the contracting community; I see it as a godsend in a sense," Spampinato said. "We've all known for a long time now that foreign companies and workers and domestic companies and workers don't compete on a level playing field. And this drove that point home."