Lawmakers object to two-plane approach to tanker needs

Sixty-six members of the House and Senate this week voiced their strong opposition to efforts to select two aircraft to replace the Air Force's aging fleet of aerial refueling tankers, arguing that doing so would drive up costs.

In letters sent Wednesday to Air Force Secretary Michael Wynne, the lawmakers emphasized their support for the service's "winner-take-all" strategy to buying new tankers and said any proposal to award the lucrative contract to two companies is "fundamentally flawed" and "ill-advised."

Boeing Co., the incumbent on the program, and a team led by Northrop Grumman and Airbus are in a heated competition for the $40 billion contract to build 179 tankers. The Air Force, which has said replacing its 50-year-old KC-135 tanker fleet is its top procurement priority, is expected to award a contract to one of the teams in December.

A study in August by former Pentagon acquisition chief Jacques Gansler supported a split-buy approach, arguing that prolonged competition between the companies could ultimately save significant money on the program. The study, funded in part by Northrop Grumman, sparked some interest, but neither the Air Force nor Congress has made any attempts to split the contract between Boeing and Northrop.

Boeing is offering a tanker based on the company's 767 passenger aircraft, while the Northrop-Airbus team has proposed the KC-30 tanker derived from the Airbus 330 airliner.

In their letters, the lawmakers, many of whom represent states with strong Boeing interests, attempted to discredit the split-buy approach.

"A process that guarantees the procurement of two tankers removes all benefits associated with a competitive process by guaranteeing business to potential manufacturers," according to the letter signed by 14 senators.

Selecting two contractors would "eliminate any incentive for these manufacturers to maximize efficiencies in the development of a product that ensures taxpayers and the Air Force the best value," they wrote.

The House letter estimates that selecting two contractors would ultimately cost billions of dollars and aggravate budget pressures within the Air Force.

"With many competing priorities in a resource constrained budget, the Air Force cannot afford the billions in additional, unbudgeted funding that would be necessary to cost-effectively develop and procure two new tankers at the same time," they wrote.

In response to the congressional letters, a Northrop Grumman spokesman stressed that their product is capable and cost-effective.

"We are ... somewhat surprised that Boeing is going to such great lengths to disparage a 'split-buy' acquisition plan because, after all, what are they going to do when they lose?" the spokesman said.