Boeing tanker bid gets big boost

WASHINGTON — Boeing received a major boost from a House of Representatives subcommittee Wednesday, which proposed tight restrictions on the Pentagon as the Defense Department seeks new bids on a $40 billion contract for Air Force aerial-refueling tankers.

The action was the first on Capitol Hill since the Air Force awarded the contract in February to Northrop Grumman and its partner, Airbus parent European Aeronautic Defence & Space (EADS) — a decision Boeing had protested.

The contract, one of the largest in Defense Department history, eventually could be worth $100 billion

After congressional auditors found "significant errors" in the award, the Defense Department decided to reopen the competition.

Pentagon officials had indicated they'd release a draft of a revised request for bids by the end of July. But the action by the House Defense Appropriations subcommittee put a new twist in the Air Force's seven-year effort to replace more than 600 Eisenhower-era tankers.

The defense-spending bill essentially would require the Pentagon to abide by the provisions of the earlier bid proposal, something the Government Accountability Office said it didn't do in the first contest.

The language in the bill would require the Pentagon to seek a medium-sized tanker like the one Boeing offered and it would prohibit extra credit for a larger tanker like the one offered by Northrop-EADS.

It also would require a new tanker be capable of refueling all planes currently flown by the Air Force, a requirement the Northrop-EADS tanker was unable to meet and that the Air Force dismissed in the earlier competition.

Also, language in the bill would require the Pentagon to consider the cost of operating and maintaining the new tankers over a 40-year life cycle, rather than a 25-year cycle.

That could favor the Boeing plane, which according to one analysis would use $35 billion less in fuel over 40 years.

The Pentagon hopes to award the contract by the end of the year.

The measure would provide more than $893.4 million for the tanker program in the coming fiscal year, but the Pentagon would have to get approval from the subcommittee before spending the money.

Not surprisingly, Boeing was pleased.

"We appreciate this strong bipartisan support for following the GAO recommendations and look forward to working with our customer towards delivering the right aircraft into the hands of the war fighter," Boeing said in a statement.

The Defense Department declined to comment and Northrop-EADS had no immediate comment.

The subcommittee's chairman, Rep. John Murtha, D-Pa., inserted the tanker language into the bill after nonstop lobbying by the No. 2 Democrat on the subcommittee, Rep. Norm Dicks, D-Bremerton.

"The bottom line is this is good language," Dicks said. "We went through each of the GAO's recommendations and told them to fix it. I hope this sends a strong message to the Defense Department this needs to be done fairly."

The bill will be considered by the full House Appropriations Committee after Congress' August recess, and it may be one of the few spending measures that are approved this year.

The defense-spending bill is considered a must-pass measure, as it provides money for troops fighting in Iraq and Afghanistan.

The Senate has taken no action on its version of the bill.