Rumsfeld Decides To Study Refurbishment
The Pentagon has
delayed for six months a decision on whether to go ahead with the
scandal-ridden Boeing 767 deal.
Boeing already had Congressional approval on a deal to sell and
lease 100 refueling tankers -- based on the 767 airframe -- to the
Air Force for about $23.5 billion. But the deal was put on hold
after Pentagon officials learned that former USAF chief negotiator
Darleen Druyun accepted a job as Boeing vice president before the
deal was consummated. She later pleaded guilty to criminal charges.
Boeing fired both her and the man who hired her, Chief Financial
Officer Michael Sears. Shortly after that, CEO Phil Condit abruptly
Here's what the military said in a statement to ANN:
Secretary of Defense Donald Rumsfeld has deferred a decision on
the tanker recapitalization program until additional studies now
underway can be completed later this year. The decision was based
in part on recommendations made by the Defense Science Board's
Aerial Refueling Task Force.
The data evaluated by the task force led them to conclude that
the corrosion problem on KC-135s can be managed and the operating
and maintenance cost growth on the tanker fleet may not be as large
as earlier estimates.
The Task Force also
concluded that the Mobility Capability Study being conducted by the
Director of Program Analysis and Evaluation (PA&E) would
provide more clarity on the question of tanker recapitalization. In
addition, the Task Force found that future potential decisions
regarding the matter would benefit from the completion of the Air
Forces's ongoing Analysis of Alternatives, a comprehensive look at
other aerial refueling options.
Based on DSB Task Force Study conclusions, the Secretary of
Defense has directed that both studies -- the Air Force Analysis of
Alternatives and the PA&E Mobility Capability Requirements --
be completed by November 2004.
The decision came after
weekly trips by Boeing CEO Harry Stonecipher to Capitol Hill, where
he talked "with anyone who'll listen" about his company's efforts
to clear up ethical questions. But it appeared Boeing's
congressional allies were ready to sit this one out after the
Pentagon's decision not to decide.
Rumsfeld "has made the appropriate decision to return to square
one and take a new look at the tanker issue from the ground up,"
said Sen. John W. Warner (R-VA), chairman of the Senate Armed
Services Committee, in a prepared statement.
Arizona Republican Senator John McCain, a former Navy pilot and
harsh critic of the deal said Rumsfeld's decision sounded a death
knell for Boeing's 767 tanker sale as it was originally approved by
"So, the secretary's decision appears fatal to at least the
lease component of the proposal," he told the Post.
But Boeing appears to be sticking to its guns. Spokesman Doug
Kinnett told the Washington Post, "We firmly believe that the 767
tanker is the only solution that fulfills all" of the Air Force's
But in the wake of the tanker scandal and news that the
requirements for the deal were rewritten by Boeing to make them fit
the 767, Boeing may indeed face stiff competition from Airbus. The
European consortium has reportedly already won two tanker deals
overseas and is spending about $80 million to meet the USAF
Boeing has said, if the deal falls through, it will take a $300