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Tuesday, November 23, 2010

Pentagon Commits Blunder on $40-Billion Tanker Project With Alabama Connections

A $40-billion Air Force refueling-tanker project could wind up being built largely in Alabama, and some reports indicate the hotly contested contract has been a driving force behind political prosecutions that have engulfed our state for the past decade or so--including the Don Siegelman fiasco.

Any developments in the battle between Boeing and the European Aeronautic Defence and Space Co. (EADS) is big news here in the Heart of Dixie--even if it involves a colossal screw up by the Pentagon. The latest actions from the geniuses who run our military-industrial complex is so comical that it brings back memories from the '80s of $10,000 screw drivers and $100,000 toilet seats.

The Air Force recently sent out internal bid assessments--but sent them to the wrong parties. Here is how the Mobile Press-Register describes it:

The U.S. Air Force said . . . that it inadvertently sent internal assessments of the bids for its $40 billion refueling tanker contract to the wrong manufacturers, potentially compromising the high-profile competition between Boeing Co. and the European Aeronautic Defence and Space Co.

The Air Force recently sent computer files to the rival bidders but mixed them up -- delivering its technical review of Boeing’s bid to EADS, and vice versa. The information included pricing data that is closely guarded by the companies as a crucial factor in the high-stakes competition.

A winner of the 179-plane contract was expected to be announced by November 12. But that deadline has passed, and it now looks like an announcement will not come until after the first of the year. Air Force officials say the recent gaffe will not disrupt the bidding process. But some observers are not so sure about that. Both sides now could have grounds for protesting the outcome of the process, reports The New York Times:

Industry consultants said the mistake could provide the loser with grounds to protest the contract, delaying a decade-long push to replace refueling planes from the Eisenhower era.

“This seals the deal that this contract award will not be the last word,” said Richard L. Aboulafia, an analyst at the Teal Group in Fairfax, Va.

What is at stake? Here is how the Times sums it up:

The Air Force’s first effort to replace the tankers collapsed after corruption charges involving a leasing proposal with Boeing.

Northrop Grumman and EADS, the parent of Airbus, then won in 2008, only to have the government block the award after Boeing protested. Northrop dropped out earlier this year, leaving EADS to bid alone.

The award of the contract is also highly political, with thousands of jobs at stake in Washington State, where Boeing would assemble its planes, or Alabama, where EADS would build a factory if it won the contract.

How does the competition stack up?

The EADS tanker, which is based on an A330 commercial airplane, is larger than Boeing’s tanker, based on its 767 jets. Most analysts expected the EADS plane to score more highly on fuel and cargo capacity, while Boeing’s jet was likely to be cheaper to house and operate.

As a result, analysts have said that the bidding would come down to a final shootout over which company would offer the lowest price.

When the word "billions" is being throw around, you can rest assured that chicanery might be involved. Andrew Kreig, of the D.C.-based Justice Integrity Project, already has reported on that. In fact, Kreig reports, the Air Force tanker competition played a major role in the political prosecution of former Alabama Governor Don Siegelman during the George W. Bush years:

The prosecution of former Alabama Governor Don Siegelman was driven partly by efforts to secure a massive Air Force tanker contract for a European company, according to a new report at Huffington Post.

According to an article by veteran attorney and journalist Andrew Kreig, Siegelman was prosecuted as part of a broad, Republican-driven campaign to land the $35-billion contract for the European Aeronautic Defense and Space Co. (EADS).

How did Siegelman get caught up in a heated competition that pits EADS against U.S.-based Boeing? If it wins the contract, EADS has pledged to build a large assembly plant near Mobile, Alabama. And Kreig's sources say "pro business" forces in Alabama decided the state would stand a better chance of landing the assembly plant if a Republican was governor instead of Siegelman, a Democrat.

Siegelman himself has discussed the possibilities that his ties to Boeing helped make him a target. Writes Kreig:

The EADS-led plan would replace Boeing Corp., the previous tanker builder. Years ago, EADS used competitive intelligence agents to show that Boeing had bribed an Air Force procurement officer. My article noted that an EADS victory would enable an assembly plant in Alabama, as advocated by four European heads of state, major global financiers and some U.S. politicians.

"The ring of truth in the article," Siegelman wrote me last week after publication and follow-up, "is that Republicans wanted EADS, and I was close to Boeing because I had helped them expand their National Missile Defense Center in Huntsville and had them locate a manufacturing facility for the Delta IV and Delta II Rockets in Decatur, AL."

So an innocent man's life is in tatters and our democratic principles have been trampled . . . but hey, a billion-dollar contract is at stake. Republicans like the smell of that "b" word, and they won't let little matters of right and wrong get in the way.

Thanks to the Air Force, we now have a touch of comedy to add to an otherwise sordid story.

1 comment:

mikkrikk said...

I thought the Kreig report tying the prosecution of Don Siegelman to the tanker project was somewhat dubious. It always seemed to me that some link was missing. This column prompted me to think again about the implications of awarding the tanker project to EADS which would build it in Mobile.

Thinking back to Bob Riley's early days as Governor, we recall the revelation that his handlers had national political hopes for him. Bringing him back from DC to be Alabama's governor was to be an important step in that direction. Perhaps, then, an additional benefit to getting Siegelman out of the way was still largely political. Perhaps, they simply thought there was a 50/50 chance of the tanker being awarded to Alabama instead of Kansas and Washington.

Riley, then, would reap the enormous political benefits as governor of a state that needed economic progress. Recall Riley's repetitive pronouncement at each little industrial victory: "this will fundamentally change the way the nation perceives Alabama."

Those handlers, presumably including Bill Canary, probably did not anticipate the backlash from the Siegelman prosecution and the numerous reports of Mississippi Indian gaming money. Riley is damaged goods now and would have no hope of a political life on the national stage.