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Airbus, Alabama, Boeing, and McCain and Pratt
17 March 2008The Airbus/Boeing competition has had some interesting turns. The original proposal was for Boeing to lease planes to the Air Force and apparently there was some illegal activity during the bidding process, enough illegal activity that Federal Prison time was served.
McCain prides himself in the role he played blocking an earlier version of the tanker deal that gave the contract to Boeing. As chairman of the Senate Commerce Committee and of an Armed Services subcommittee, McCain led an investigation that eventually helped kill that contract in 2004. A former Air Force official and a top Boeing executive both served time in prison, and the scandal led to the departure of Boeing’s chief executive and several top Air Force officials.
“I intervened in a process that was clearly corrupt,” McCain said Friday. “That’s why people went to jail.”
McCain has insisted on an “open and fair competition”, and thus the stage was set for the Boeing/EADS showdown.
The Air Force having been tainted by the earlier process was and is in no position to do anything but comply with McCain’s requests. If one of the participants were to drop out, there would be simply no competition, it takes two to compete at the most basic level, three competing is better.
And it is in that fact, that two must be present to compete that Boeing may have their best argument why the contact award to EADS should be re-opened.
The initial request for proposal (RFP) specified a set cargo capacity, EADS which was proposing a larger aircraft than the RFP called for would be penalized, advantage Boeing. EADS protested and at the guidance of McCain the Air Force removed the penalty for proposing a larger aircraft. Advantage no one.
Second, the RFP originally had language that required the submitters (Boeing and EADS) to address the issues of governmental subsidies. Advantage Boeing, since EADS has and is heavily subsidized. Again EADS protested and at the guidance of McCain the Air Force removed the offending paragraph. Advantage no one.
It can be argued and I won’t suggest otherwise that with the removal of these two conditions the Air Force did set the stage for a competition based purely on price and performance.
But if the Air Force is forced to buy, maintain and fly, and fuel up a tanker larger than they wanted, they may have just merely gotten the best price on something they can ill afford.
Both Boeing and EADS were proposing variants of their existing airframes, their bids would not be competitive if they had to design a new airframe. It could be argued that the Air Force knew which company had what available for the mission and tailored their RFP to the company they wanted to win. Could be argued, especially in light of the jailing of an Air Force official and a Boeing official.
If EADS is subsidized by the EU, we Americans are essentially rewarding a competitor and it’s master with our tax dollars. Not that we’d do anything like that ever.
While the battle may have been won, the war is looking a bit fuzzier.
I took some heat for my criticisms of our state delegation not being on relevant committees on issues that matter to the workers of our state. To which I replied, sometimes these things are lost or won in the specification phase.
I hope this post clarifies that assertion.
An interesting point, if the EADS award stands, the US will have two companies on American soil capable of building such hardware. Essentially two companies, with voters, with Congress People and with Senators. Not unlike the New London / Virginia Shipyard situation.
Any attempt to shut down one facility and keep the other will be met with great outcry and Congressional scorn. We are creating another entitlement. The right of Mobile, Alabama to be in the business of making and selling large airframes to the US Military.
Once granted an entitlement is very difficult to de-entitle.
The Air Force may get a great price, but oh man, is this ever going to cost us in the long run.
One Response to “Airbus, Alabama, Boeing, and McCain and Pratt”
March 24th, 2008 at 7:41 am
[…] presents Airbus, Alabama, Boeing, and McCain and Pratt posted at CtTaxed.com, saying, “Twists and Turns of the EADs/Boeing USAF […]