McCain Stirs Bipartisan "Tanker Trouble"

And as much as I’d like to slam that “straight-talking maverick” for this, I really can’t; please allow me to explain.

This tells us that the U.S. Air Force has awarded a $40 billion tanker contract to Northrop Grumman and the European Aeronautic Defence and Space Company (EADS), the parent company of Airbus, over Boeing (with manufacturing facilities based in Washington state and Kansas).

However, the following should also be considered in this story (from here)…

Back in 2004, McCain launched a one-man to crusade to undo the scandal ridden lease for Boeing aerial refueling tankers based on the 767 design. Subsequent congressional investigations showed a systematic failure of the Air Force's procurement process in opting for a lease of the Boeing aircraft that would be more expensive that purchasing the tankers outright. While Air Force officials blamed one Pentagon official about to start a her new career at Boeing as responsible for swinging the deal to hr new employer, Senator McCain was having none of it. As the Washington Post reported in November 2004:

Sen. John McCain (R-Ariz.), who has conducted an equally vigorous campaign against the lease, said in releasing the internal Pentagon communications in a speech on the Senate floor that the missives reflect a "systemic Air Force failure in procurement oversight, willful blindness or rank corruption."

McCain said top Air Force officials have recently been trying to "delude the American people" into believing that a single person is responsible for misconduct in the $30 billion leasing plan -- namely, Darleen A. Druyun, the Air Force contracting official who pleaded guilty two months ago to overpricing the tankers as a "parting gift" to Boeing before she became one of the firm's executives.

"I simply cannot believe that one person, acting alone, can rip off taxpayers out of billions of dollars," said McCain, who said he will keep pursuing internal Defense Department and Bush administration communications until "all the stewards of taxpayers' funds who committed wrongdoing are held accountable."

The story goes on to tell us that Air Force Secretary James G. Roche and Marvin R. Sambur, the Air Force's top acquisitions manager, resigned several days before McCain's speech as part of the fallout from the reversal of Boeing’s lease.

And this story tells us that…

Although the Northrop-EADS tanker will be assembled in Mobile, Ala., the major A330 airframe sections will still be built in Europe and shipped across the Atlantic.

And this has raised political hackles all over the place, particularly in an election year; McClatchy tells us here that House Speaker Nancy Pelosi, no doubt already trying to distance herself from the pending sellout on telco immunity concerning FISA, has called for an investigation, and both Hillary Clinton and Barack Obama have criticized the contract award (Boeing’s corporate HQ is in Chicago, IL).

(And by the way, speaking of the FISA fiasco, it's pathetic that I have to add this link, but I do what I must...also, "what Stoller sez" here).

But if you want to consider how Northrop-EADS won (from the Seattle Times)…

Scott Hamilton, an Issaquah-based analyst who has long considered the Northrop-EADS proposal superior, described that bottom line as "astounding."

Hamilton criticized Boeing's public-relations campaign during the contest for focusing on aspects such as the creation of U.S. jobs and government subsidies to EADS, rather than the merits of the two planes.

"Boeing doesn't seem to have a leg to stand on for a successful protest," said Hamilton. "I think that [local] anger really ought to be directed at Boeing for putting together such a poor proposal."

And…

The Northrop proposal, which put forward the much bigger A330 against the 767, even swung the Air Force around from its original thinking.

"The Air Force started out believing that the larger aircraft was a liability," Thompson said. "Northrop did such a superior job of analysis that they convinced a reluctant Air Force to treat the larger aircraft as an asset."

His memo listed the five key criteria as capability, risk, past performance, cost and "integrated fleet aerial refueling assessment," a score from a computer model that measures performance in various war scenarios.

"Boeing didn't manage to beat Northrop in a single measure of merit," Thompson wrote.

The two proposals were assessed as equal on the perceived risk that the contractor would not perform as required.

By every other measure, Northrop won. On past performance, the big delays to the Japanese and Italian 767 tanker programs weighed heavily against Boeing, Thompson said.

And Thompson, who was considered by EADS to favor Boeing in the competition, added this damning endnote to his memo:

"The reviewers concluded that if they funded the Northrop Grumman proposal they could have 49 superior tankers operating by 2013, whereas if they funded the Boeing proposal, they would have only 19 considerably less capable planes in that year."

Yep, it sounds pretty much like Northrop-EADS “handed Boeing its lunch” here, and no amount of political squawking by anyone is going to change that.

Besides, McCain’s home state of Arizona isn’t affected at all by this deal; take a look at this if you want to get an idea of how aerospace-related industry is booming there.

And I have to say that, while I’m highly sympathetic to anyone in this country losing a job even though they performed to the best of their ability, I live with the reality of my job being affected for cost reasons from an offshore partner all the time (and there are times when I think I should put the word “partner” in quotes permanently, but I won’t go there).

The Northrop-EADS award is nothing but “the miracle of our global economy” at work, everybody. Besides, I didn’t hear any politicians crying while this country’s IT industry was decimated by offshoring under the foul reign of Bushco. Why weren’t Nancy Pelosi or her congressional counterparts prior to November 2006 calling for some kind of a special investigation while all of that was going on?

But oh, this story affects a huge workforce from two states, one of which (Washington) should swing for the Dems unless something goes horribly wrong; Kansas is starting to trend that way also, but I don’t quite think it will be completely “blue” by November (I’d love to be wrong, though). And I suppose that makes all the difference.

And wouldn’t it be ironic if McCain ended up taking his biggest electoral hit for actually performing some astute Congressional oversight for a change?

Update 3/8/08: Nope, I don't see this story going away either (here).

Update 3/11/08: "Astute congressional oversight," huh? Good thing I don't get paid for this (snark - but just keep telling yourself, "this is good news for Republicans").