Pentagon delays tanker competition

The Pentagon announced Wednesday it will abandon efforts to restart a competition for aerial refueling tankers this year, effectively kicking the high-stakes battle over new planes for the Air Force into the next administration.

The decision amounts to yet another delay for a program plagued with problems over the last seven years that have stalled procurement of the tanker fleet.

During testimony Wednesday before the House Armed Services Committee, Defense Secretary Robert Gates briefly addressed his decision on the tanker competition, saying the issue had become "enormously complex and emotional." Gates had hoped to wrap up the new competition this year. He said it had become clear the Pentagon could not complete a competition in the next several months "that would be viewed as fair and objective in this highly charged environment."

The best solution, he said, is to "cleanly defer this procurement to the next team."

The tanker program's missteps began with a scandal involving the procurement process by which Boeing won the original contract and then problems with the rebidding process that awarded the job to Northrop Grumman and EADS. That contract was cancelled this summer after the Government Accountability Office found significant errors in the service's selection process.

In July, Gates announced he would reopen competition on the program in the hopes of awarding a contract this year. But that process prompted more concerns from Boeing officials, who have said they needed six months to revise their bid to offer a larger plane because the Pentagon plans to give credit for carrying more fuel than required. The EADS plane, a modified A330, is larger than the 767 offered by Boeing.

In a statement, Boeing officials said they welcomed the decision, which they believe will "assure delivery of the right tanker" to the Air Force. Meanwhile, Rep. Rick Larsen, D-Wash., whose district is home to the Boeing 767 plant, lauded the decision as "a step in the right direction toward fair competition and a level playing field for Boeing." But a spokesman for Northrop Grumman said in a statement the company is "extremely disappointed" by the decision.

"With this delay, it is conceivable that our warfighters will be forced to fly tankers as old as 80 years of age," he added. Meanwhile, Sen. Richard Shelby, R-Ala., called the decision "irresponsible, shortsighted and harmful" and said it "places business interests above the interests of the war fighter." The Northrop/EADS team planned to build its tanker in Mobile, Ala.

With the delay, the Air Force has determined that its aging KC-135 tanker fleet can be adequately maintained to meet its needs for the near future, although additional funds may be requested for fiscal 2009 and following budgets to keep those 1950s-era planes in shape. The Pentagon had requested $893 million for the new fleet of tankers for fiscal 2009.