KC-X Fallout

Just when we were tired of fighting about the F-22 program, the USAF decides to create more controversy. On Friday, the contract for the long-delayed and desperately needed KC-X tanker was awarded to the EADS/Northrop Grumman team for their Airbus 330-based entry. The prize starts at $35 billion, and given the shape of the Methuselah KC-135s, that figure will only go up. But the real battle is just beginning, as sore-loser Boeing mustered its congressional allies en masse:

“We are outraged that this decision taps European Airbus and its foreign workers to provide a tanker to our American military,” the Washington State delegation said in a joint statement. Boeing planes are assembled outside of Seattle. “This is a blow to the American aerospace industry, American workers and America’s men and women in uniform,” the statement added.

Wow, that sounds kinda bitter. I hope Boeing didn't prematurely celebrate an anticipated victory...

A Boeing victory was considered so certain that many Wall Street analysts had already factored the contract into their economic forecasts for the company. One senator, Kay Bailey Hutchison, Republican of Texas, sent out a press release prematurely praising Boeing for its victory.

Well, that's embarassing, but can we make it more so? Maybe throw in a blatant congressional conflict of interest?

Representative Norm Dicks, a member of the defense subcommittee of the House Appropriations Committee and a Democrat from Washington State, said he was attending an anticipated victory party at Boeing’s offices in Washington when the mood suddenly darkened.

Mr. Dicks added: “Here we are in the middle of a recession, and we give this to Airbus? That is not going to go down well.”

SERIOUSLY? I can't believe the NYT wrote that with a straight face. A member of the defense subcommittee from Washington state is attending Boeing "mission accomplished" victory parties? And he feels safe enough to disclose that fact right before protesting the decision? The entire Washington State delegation ought to be barred from Appropriations and Armed Services committees. This is inexcusable. Not that EADS doesn't have its own defenders, of course.

Ronald D. Sugar, the chief executive of Northrop Grumman, said in a telephone interview that he expected members of Congress would have a “variety of views” depending on whether their districts would be gaining or losing jobs under the deal.

Mr. Sugar said that 60 percent of the content of the new tanker would come from the United States and that it would create 2,000 jobs in Mobile and 25,000 over all in the United States.

“This is more about the capability that we will give to the kids fighting the wars and the cost to the taxpayer,” Mr. Sugar said.

Backing Mr. Sugar’s view was Senator Richard C. Shelby, an Alabama Republican who hailed the decision as “great news for Alabama.”

At least Northrop Grumman (which last time I checked was an American company) knows how the game was played. And any contract bringing jobs to Katrina country has a certain sentimentality to it. Reuters put together a nice piece on the program's issue of contention, and it noted that the deal would create jobs in 49 states (this blogger hopes Washington was excluded out of spite)

If Boeing wants to maintain a shred of patriotism and ethics, it should meekly accept the Air Force decision and move on. The company has been eating the lunch of EADS subsidiary Airbus with its 787 orders, and Boeing will undoubtedly receive billions more in defense contracts in the future. If Boeing is really worried about American servicemen, it will not appeal the contract award and add 2-3 years to the deployment date of these tankers. As it is, we may not be able to phase out the 1950's era Stratotanker until 2040. We desperately need upgraded airlift capabilities in both fuel and cargo (categories where EADS handily won). Besides, Boeing had a shot at its own deal a few years back, and all it managed to do was land a company exec in prison and cause its CEO to resign in disgrace. If there's such a thing as karma in procurement, then Boeing is being paid back with interest for its previous dishonesty.

P.S. Congratulations to the Air Force for resisting the domestic contractor lobbying machine. Now the real test - can you stand your ground with Congress?