Taxpayer Advocacy Group: "It's Dead As Disco"
investigation shows the Air Force gave Boeing five months to
examine and, in many cases, rewrite the Request For Proposal on a
fleet of refueling aircraft to replace the aging KC-135s.
Knight-Ridder Newspapers reports Boeing officials eliminated 19 of
the specific capabilities requested by the USAF. There were only 26
That's not all. The newspaper chain reports Air Force
procurement officials then gave Airbus just 12 days to answer the
bid before awarding the contract to Boeing. Even so, Airbus met 20
of the 26 original conditions.
Among those conditions reportedly written out of the
- The 767-200 tankers would have to be able to refuel every
aircraft in the US arsenal.
- They would have to refuel more than one aircraft at a
- They would have be able to carry passengers and wounded service
- The 767-200s would have to be at least as efficient and
reliable as the KC-135 tanker fleet they're supposed to
The Air Force says it's not at fault. "This was not a
competitive bid process," said Undersecretary for Acquisitions
Marvin Sambur. "The Air Force was ordered by Congress to work with
Boeing on the new tanker program."
That sentiment is
echoed on Capitol Hill by Sen. Sam Brownback (R-KS). "Everyone who
knew anything about the tanker proposal has known for a long time
that this was gift-wrapped for Boeing and no one else," he said.
The government "was going to do whatever it took to make sure this
contract went to this company."
The scandal broke when one senior USAF member, Assistant
Undersecretary Darleen Druyun, a member of the Pentagon's
negotiating team working closely with Boeing executives on the
contract, later joined Boeing as a vice president. Boeing's man in
charge of the tanker deal, Bob Gower, wrote in an email during the
five month rewrite, "Meeting today on price was very good. Darleen
(Druyun, then still an Air Force official) spent most of the time
bringing the USAF price up to our number. ... It was a good day.
She may be running her own covert operation on this one, so we
probably don't want to discuss openly."
The Boeing tanker contract is worth an estimated $23.5
Druyun and Boeing CFO Mike Sears were later fired as the tanker
deal came under closes scrutiny by the Pentagon. Boeing CEO Phil
Condit resigned, also under pressure about the tanker bid.
Boeing proposed that
the USAF lease 100 tankers in a deal that even the company admitted
would cost more money than buying the aircraft outright. Boeing and
its advocates in Washington (DC) said that the KC-135 fleet was so
decrepit the lease deal would be the only way to keep American
warplanes in the air -- especially during the Afghanistan and Iraq
But another email indicates even Boeing insiders were a bit
dubious about that plan. Walter Skowronski, the vice president for
finance wrote, "Briefly, the OMB A-94 Business Case Analysis will
most likely pass the test. But this test measures the illogical
conclusion that it is better to lease now than to buy now. This
won't make sense in the newspapers. Further, neither Boeing nor
SSMB (Salomon Smith Barney) would ever put its hand on a Bible and
say that makes economic sense."
The lease deal was later amended to cover 20 planes. The balance
of 80 aircraft would be purchased.
Opponents of the Boeing tanker deal say these are the straws
that break the camel's back.
"It's dead as disco," said Keith Ashdown, policy director for
the Washington group Taxpayers for Common Sense.
"It's too heavily tarred" by scandal, said Richard Aboulafia,
aerospace analyst with the Teal Group, speaking with a reporter
from the Wichita Eagle.
Earlier this month,
however, the Pentagon indicated there are no fatal flaws in the
deal, although it might have to be renegotiated.
Monday, Boeing went on the offensive, saying Knight-Ridder never
contacted its executives about the story. "There's huge errors in
fact in the article," Doug Kennett, a Boeing spokesman, said.
"We were never given the opportunity nor were we interviewed. It
was a story that was written without out assistance, without our
input. And we are in fact, right now, going through point by point
Congressman Todd Tiahrt (R-KS) said Airbus can't meet the
requirements set forth by the USAF -- 20 of which the newspaper
article said Airbus actually met. That would be pretty tough to do,
said Tiahrt, given that Airbus has never built a tanker before.