Boeing to Challenge Tanker Deal

March 11, 2008 01:36 PM
by findingDulcinea Staff
Boeing is appealing the Defense Department’s decision to award the second largest contract in its history to a consortium that includes a European company.

30-Second Summary

The European Aeronautic Defence and Space Company, the parent company of Airbus, partnered with the American company Northrop Grumman Corp. to win the $40 million aerial refueling tanker deal.

Military officials briefed Boeing last Friday on the decision, and Boeing has since reviewed its options. Boeing said it would submit a formal protest on Tuesday.

The Government Accountability Office will have up to 100 days to analyze the contract. In 2006, the GAO accepted Lockheed Martin Corp.’s and United Technologies Corp.’s objections to a $10 billion helicopter contract that was awarded to Boeing, resulting in a rebid, according to The Wall Street Journal.

The deal has sparked debate regarding the loss of domestic jobs, the outsourcing of American industry and the potential threat to national security.

Supporters of the contract point to the superiority of Airbus’ tankers in terms of value and performance. An editorial from The Christian Science Monitor asserts that if the Air Force had gone “with Boeing they could expect 19 less capable tankers” by 2013.

An editorial from the Washington state newspaper Yakima Herald-Republic argues that America should keep “construction of the plane on American soil where it belongs.”

Presidential candidates Hillary Clinton and Barack Obama have expressed concern over the decision to award the contract to a foreign-based company. John McCain, however, said he wanted to explore the matter further before making a judgment, German magazine Der Spiegel notes.

But some have actually blamed McCain for Boeing’s misfortune. McCain sullied Boeing’s integrity in 2003 when his congressional inquiries unearthed a scandal in which an Air Force employee was given a high position at Boeing after providing Boeing with confidential information.

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