What's the Air Force's move? Yesterday, the Government Accountability Office (GAO) just upheld Boeing's protest of the Air Force's refueling tanker contract award to a partnership between Los Angeles-based Northrop Grummand and the European Aeronautic Defence and Space Company (EADS; includes Boeing's number one commercial rival, Airbus).
First, the Air Force was recently decapitated: Secretary Michael Wynne and Chief of Staff Buzz Moseley were canned several weeks ago by Defense Secretary Bob Gates. An experienced team with particular sensitivities to the tanker issue is on route to replace them, but they're jumping into a political firestorm.
Second, the GAO's recommendations are not binding. The Air Force does not have to do anything. But it will. Why? Because Boeing's congressional allies will cruxify the already heavily-bashed military service if it thumbs its nose at the GAO's findings which conclude that the acquisition process was riddled with errors that misled Boeing. Also, the House Armed Services Committee has included a provision in its version of the defense authorization bill that would mandate consideration of the industrial base when choosing the winner of competitions -- clearly this was written with the Air Force's tanker decision in mind. Whether or not this makes it into the final version of the bill sent to the President is uncertain. Without a doubt it is an attempt to exercise pressure on Defense Department leaders to go with Boeing. Boeing public relations and lobbyists are on overdrive and will utilize the GAO's ruling to the max. The Air Force can't wiggle out of this without some sort of response.
So what will the Air Force do? My bet is that the Air Force will try - and may not succeed - in narrowing the scope of a "recompetition" as much as possible. That would involve trying to simply "clarify" the parts of the evaluation of which the GAO found problems. The Air Force may even try to keep the bidders from modifying their bid proposals; more likely they'll try to minimize the modification allowed to just the parts of the offerers' bids responsive to the changed draft RFP. If this happens, we'll know for sure by the time the Air Force issues what is called a draft amendment to its request for proposals (RFP). It's likely in Northrop-EADS' best interest to go along with this narrow scope approach if it happens. But Northrop-EADS doesn't want to be seen as too cozy with the Air Force either.
My belief is that Boeing will want to roll the competition back as much as possible. Now they have a better idea of what Northrop-EADS has offered and what the Air Force wants and they want to win. So that means they will probably want to significantly alter their bid -- maybe even what plane they want to offer. There's no guarantee Boeing will stick with the 767 platform -- they could go with a 777 or 747 even.
Narrow or wide--those are the Air Force's options. The Air Force wants these planes sooner not later, so rolling the competition back to an earlier stage means a longer process. But if it chooses the narrow road of modifications to the RFP, then it risks further protests, a prolonged fight with Congress or who knows -- all of those unknowns can delay the program as well.
-- Nick Schwellenbach
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