Donley: Tanker contract "a missed opportunity"

Acting Air Force Secretary Michael Donley said Monday that the latest failed attempt to award a $35 billion aerial refueling plane contract was "a missed opportunity" that leaves the military with an unclear path on how to replace its aging fleet of tankers.

Speaking at the Air Force Association's annual conference, Donley said a decision by Defense Secretary Robert Gates to postpone the latest round of bidding on the contract means the service "needs a new approach" when it tries again next year to pick a defense contractor to build 179 new planes.

"None of us can yet answer the question, 'Where do we go from here?'" Donley told the audience of mostly Air Force personnel and defense contractors. "This experience has not been a healthy one for the Air Force, or for the (Department of Defense) or for the contractors or for our working relationship with each other or Congress."

Gates last week canceled bidding between Boeing Co. and Northrop Grumman Corp., calling for a "cooling off" period between the bitter rivals. Gates said it would impossible to award the contract by the end of the year as planned.

It was the latest delay in seven years of trying to find a contractor to build the jets that can refuel planes in mid-air. The Air Force says there is a pressing need for the planes since some of the service's current tankers are nearly 50 years old.

The Air Force awarded the contract to a team of Northrop and Airbus parent European Aeronautic Defense and Space Co. earlier this year, but the bidding was reopened after the Government Accountability Office found fault with the Air Force's methodology.

Boeing claimed the latest round still favored the larger plane put forth by the Northrop team, and threatened to back out of the process. Facing the prospect of just one bidder and heavy pressure from Boeing and its backers in Congress, the Pentagon decided to delay a decision until after the next president takes office in January.

Donley said he agreed with Gates that a cooling off was needed in the struggle between Northrop and Boeing, which has been especially rancorous even for the highly competitive defense industry.

But he said the service needs to reconsider its acquisition process in general to make it capable of handling often complex technological programs, and to fend off the growing number of protests filed by the losers of contract awards.

The Air Force is conducting two reviews of its acquisition programs, one internal, the other an independent assessment. Donley said the service is trying to determine what lessons it can learn from the ongoing problems with the tanker contract.

The Air Force, Pentagon and Energy Department also plan to meet this week to discuss problems with the handling of nuclear weapons, he said. Talks would include improving inspections, standards and the tracking of nuclear materials.

President Bush appointed Donley this summer after his predecessor, Michael Wynne, was fired over mistakes involving nuclear weapons, including missiles with nuclear warheads that were mistakenly flown on Air Force planes over the U.S. and the shipping of nuclear technology to Taiwan.

A Pentagon advisory group last week said the Air Force should combine its nuclear weapons under one strategic command unit.