For almost a decade, the Air Force has bungled attempts to replace its fleet of Eisenhower-era KC-135 refueling jets. The procurement process has been grossly mismanaged and tainted by corruption and favoritism. Now Congress seems ready to add to the confusion with legislation intended to ensure that the American contractor, Boeing, beats out its European rival, the aerospace consortium EADS, for the $50 billion contract.
Last month, the House passed an amendment to the Defense authorization bill requiring the Pentagon “to take into consideration” any unfair advantage to a bidder conferred by illegal subsidies. Senator Patty Murray, Democrat of Washington, a staunch supporter of Boeing, has introduced a companion bill.
Boeing and its allies have reasonable concerns that subsidies will give an unfair price advantage to EADS’s Airbus. The World Trade Organization issued a confidential ruling in March that reportedly agreed with American charges that European governments had awarded billions in illegal subsidies to EADS, helping it gain market share from Boeing.
The W.T.O. rules include their own enforcement mechanisms to make offending members end illegal subsidies. Instead of involving the Pentagon in American trade policy, it would be best to let the W.T.O. process run its separate course. Congress’s proposed remedy, meanwhile, would entangle the tanker bidding in years of additional legal complications.
The W.T.O. ruling is likely to be made public before the July 9 deadline for tanker bids. But the Europeans are entitled to appeal the decision. To truly level the playing field, the Pentagon would have to convert that finding into an estimate of the illegal subsidies to each Airbus tanker — a process the Europeans are likely to contest. And the tanker selection would occur before the W.T.O. reached a verdict on the rival complaint brought by Europe over American subsidies to Boeing.
This fraught process would probably bump EADS out of the bidding, leaving the Air Force with only one plane to choose from. That is not the best way to get the best possible jet for taxpayers’ money. And it would almost certainly invite retaliation by European governments, which buy a lot of technology from American defense contractors.
The tanker procurement already has the feel of a sketch from the Keystone Cops. In 2004, Senator John McCain scuttled the Air Force’s plan to lease Boeing jets when he found that a top Air Force procurement official was angling for a job at the defense contractor. The Pentagon then held an open auction, awarding the contract to a consortium made of Northrop Grumman and EADS.
After Boeing protested the result, the Government Accountability Office concluded that the Pentagon unfairly favored Northrop, notably by awarding it points for size even though the specifications didn’t call for a big jet. Northrop took itself out of the bidding in March, when the Air Force’s new specs made clear that there would be no points for size. EADS chose to remain and bid on its own.
Flag-waving for Boeing in Congress would add a further, unnecessary twist to this painful saga. And by shoving out the competition, it would almost ensure that American taxpayers would get less tanker for their money.
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