Boeing, EADS spend millions on tanker dogfight

WASHINGTON — Even by Pentagon standards, it's an eye-popping prize: a $35 billion contract to build nearly 200 giant airborne-refueling tankers. And the decadelong brawl by two defense-industry titans to win it has been just as epic.

In possibly a matter of days, the Pentagon will announce whether Boeing or European Aeronautic Defence and Space (EADS) will build 179 new tankers to replace the Air Force's 1950s-era KC-135 planes. Lawmakers are bracing for a decision on Thursday after the financial markets close, according to congressional officials.

The competition is far more complex than a case of the U.S. against Europe. If Boeing wins, the air tanker would be built in Everett; Wichita, Kan.; and several other states. If EADS wins, the tanker would be assembled in Mobile, Ala., at the former Brookley military base shuttered in the 1960s.

Either way, about 50,000 jobs would be created in the U.S.

And $35 billion could amount to a mere first installment on a $100 billion deal if the Air Force pushes ahead and buys more tankers.

The contract has touched off some of the fiercest and costliest lobbying the nation's capital has ever seen. The companies have spent millions on advertising and hired dozens of lobbyists. Lawmakers are relentlessly pressing Defense Department officials.

Replacing the KC-135 planes is critical for the military. The first aircraft — the equivalent of a flying gas station — entered the fleet in 1956, when Dwight Eisenhower occupied the White House, and the last one was delivered in 1965, when Lyndon B. Johnson was president. Today, the Air Force is struggling to keep them in flying shape.

The tankers are the one aircraft the military cannot go to war without. They allow jet fighters, supply planes and other aircraft to cover long distances, crucial with fewer overseas bases and operations far from the U.S. in places like Iraq and Afghanistan.

With so much at stake, the companies and their backers are pursuing every edge and taking the struggle to places that military contractors don't normally go: radio and subway ads in the nation's capital among them.

"Our warfighters deserve a proven tanker — the KC-45 — that's already flying and refueling today," screams the full-page ad from EADS in one of the dozen inside-the-Beltway publications that cater to the government.

The company has delivered a version of the tanker to Australia and bases its design on the commercial Airbus aircraft.

In the past year, Boeing has spent $5 million on print advertising to promote its version of the tanker and EADS has shelled out $1.7 million to boost its prototype, according to Evan Tracey, president of the Campaign Media Analysis Group, which monitors advertising for political campaigns.

On top of that spending, the two companies have put ads on drive-time radio and the Washington subway system.

"A decision to award this contract to Boeing would strengthen America's manufacturing base and maintain America's competitive advantage globally," freshman Rep. Mike Pompeo, R-Kan., wrote to Defense Secretary Robert Gates.

Said Sen. Patty Murray, D-Wash.: "We need an aerospace support base in this country."

Countering the cries of "buy American," EADS says its contract would be carried out by its North American division and notes the company would create about as many American jobs building the tanker as Boeing would.

"The last time I checked, Alabama was still part of the United States," said EADS spokesman James Darcy.

Sen. Jeff Sessions, R-Ala., argues that the EADS tanker would be a better value for the taxpayer.

"The EADS plane is by 15 years newer. It's larger. It has more capacity," he said. "Every single capability that's measured, they exceed the Boeing aircraft. So it's a better aircraft. No one can dispute that."

Sen. Pat Roberts, R-Kan., counters that the Boeing version, based on the 767, is a smaller target for the enemy, with cheaper fuel costs than the EADS plane.

"I think it fits the mission better," Roberts said.

Among the dozens of lobbyists for the two companies are former lawmakers, one-time senior Defense Department officials and former congressional staffers who labored behind the scenes for the committees that oversaw the military and its budgets.

Boeing spent $17.9 million on lobbying in 2010 and $16.9 million in 2009. EADS spent $3 million in 2010 and $2.98 million in 2009.

While the numbers, compiled by the Center for Responsive Politics, reflect the companies' overall spending on lobbying, the tanker was a top priority.

"The lobbying aspect is just one component of a massive and sustained influence effort by both of these companies," said Dave Levinthal, communications director for the center.

Through the years, the Air Force's efforts to award the contract have been undone by Pentagon bungling and the criminal conviction of a former key Defense Department official.

In 2008, the Government Accountability Office upheld Boeing's protest of the tanker contract to Northrop and EADS, saying it found "a number of significant errors" in the Air Force's decision.

The Air Force reopened the bidding in 2010.