Inouye: Tanker bid split still being considered

U.S. Sen. Daniel Inouye, chairman of the Appropriations Committee, said he hasn't ruled out directing the Pentagon to split its purchase of aerial-refueling tankers between Boeing and Northrop Grumman-EADS.

Inouye said he has received industry reports suggesting splitting the contract would achieve "massive" savings of as much as $42 billion when buying at least 360 aircraft over 30 years.

"I just can't ignore these things," said Inouye, D-Hawaii. "I want to make sure the fleet we provide is the finest we can get for the buck."

Inouye's panel is one of two that appropriates defense money. His counterpart in the House, Rep. John Murtha, D-Penn., has said he favors splitting the buy to prevent further delay in the effort to replace a fleet of tankers in use since 1956.

Boeing in February 2008 lost the original $35 billion tanker contract to Northrop and its teammate — Airbus parent European Aeronautic, Defence & Space. Boeing successfully protested, and Defense Secretary Robert Gates in September postponed a rebid until the new administration took office.

Air Force Secretary Michael Donley said last week the service hopes to issue a formal request for proposals by August after Gates approves a strategy for the new bidding.

Gates has opposed splitting the program. "It's bad public policy and bad acquisition policy," he said at a news conference March 18.

Splitting the contract "would require the Air Force to maintain two different logistics facilities, two different logistics trains, two different kinds of training," Gates said. "Everything would have to be duplicated," and "I just think it's a bad deal for taxpayers."

Gates is likely to be pressed on this issue today when he testifies before the panel on the Defense Department's proposed budget for fiscal 2010.