The U.S. Air Force said today that it had taken steps to remedy the accidental release of bidding information to competitors for its aerial refueling tanker contract, and that the mistake should not have an impact on the high-stakes contest.
Maj. Gen. Wendy Masiello, a senior contracting officer who reviewed the Air Force’s internal investigation of the incident, told a panel of U.S. senators Thursday that Pentagon leaders had determined the error was unintentional and did not compromise the selection process.
The Air Force is in the final stages of evaluating bids from Boeing Co. and the European Aeronautic Defence and Space Co. for the potential $40 billion contract. A decision is expected by early March.
The Air Force disclosed Nov. 22 that it had mistakenly sent computer disks containing summary data about Boeing’s bid to EADS, and vice versa.
The gaffe roiled a contest that could ill afford any more controversy. The current competition is the Air Force’s third attempt in a decade to field a replacement for its aging fleet of KC-135 tankers.
Today’s hearing by the Senate Armed Services Committee was intended to examine the Air Force’s response to the Nov. 1 incident, according to U.S. Sen. Carl Levin, D-Mich., the committee chairman. But some supporters of Chicago-based Boeing used the forum to paint EADS as a foreign threat to American jobs.U.S. Sen. Claire McCaskill, D-Mo., whose state is home to Boeing’s defense headquarters, said Boeing “is better equipped” to build the planes than EADS, which is proposing to assemble its tankers at a new plant to be constructed in Mobile.
“We’ve got a farm field in Alabama and a company that is receiving tens upon billions of dollars in subsidies from foreign governments,” McCaskill said.
U.S. Sen. Roger Wicker, R-Miss., said the subsidies issue is in litigation before the World Trade Organization and not relevant to the tanker contest.
“I see what’s going on here,” Wicker said. “There are some people who believe the company they favor may be about to lose again, as they did in 2008, and the foundation is being laid for a protest.”
'Correct response'
Masiello told the committee that both Boeing and EADS responded “correctly and professionally” as soon as they became aware of the mistake. She said the Air Force, in an effort to ensure a level playing field, opted to provide both companies with equal access to the information contained on both disks.
But a leading backer of Boeing said that wasn’t good enough.
“Today’s hearing did not get at the core of the problem,” said U.S. Sen. Maria Cantwell, D-Wash. “The tanker competition is a price competition, and EADS saw Boeing’s proprietary data. EADS now has an unfair competitive advantage to adjust its bid to undercut Boeing.”
Cantwell’s comments conflicted with testimony from Masiello, who said the disks contained no proprietary information and no data on the pricing of either plane.
Cantwell, whose district would gain thousands of jobs with a Boeing win, called on the Pentagon’s inspector general to conduct a formal investigation of the incident.
U.S. Sen. Jeff Sessions, R-Mobile, said he was satisfied with the Air Force’s handling of the incident and that additional investigation was unnecessary.
The release of the information “did not make any difference in the competition, and that is totally supported by the fact that nobody protested it when they had the opportunity to do so,” Sessions said. “If Boeing felt like they were unfairly treated, then they would have filed a complaint.”
Levin said the committee would continue to seek information about the incident but added that the Air Force should proceed with the contest without delay.“I’m not requesting they hold up the source selection,” Levin said. “I don’t think that would be appropriate.”
A Pentagon spokesman said the mistake was “unfortunate” but should not affect the selection process.
“Obviously, it is our hope, it is our expectation that this would not affect either the awarding of the contract — there is no reason for it to — or anyone’s decision in the wake of that award to protest,” said Geoff Morrell, a spokesman for the Department of Defense.
