July 13, 2008 in Opinion

Our View: Tanker deal probably not the only procurement mess

 

The huge news that the Defense Department will reopen the bidding for new midair refueling tankers could turn out to be a boon to the Northwest, because the multibillion-dollar contract could still be awarded to Boeing, which has extensive operations in Washington state. But it bears repeating that the rationale for this do-over is tied to the serious contracting irregularities found by the Government Accountability Office.

Those errors have little to do with the loud complaints voiced by politicians. And yet, there’s this from Gov. Chris Gregoire on Wednesday:

“Last month, the Government Accountability Office all but confirmed what was suspected from day one – that the Air Force made a mistake when it decided to give away thousands of American jobs and sensitive military technology to a foreign country.”

The GAO did not conclude that sending jobs overseas or awarding the contract, in part, to a French company were violations of the contract process. No, the report was a bit more boring and much more difficult to spin for political advantage, but it helped to once again expose a broader issue that politicians are not comfortable discussing.

This nation’s defense contract process is broken, inefficient and sometimes corrupt, and it wastes billions in taxpayer dollars annually. The problems extend to the Navy and Army, too. As GAO official Michael Sullivan told Congress in April, major new systems are, on average, 21 months behind schedule and rack up cost overruns of 40 percent.

This tanker fiasco provides a good example. The first attempt avoided open bidding, as U.S. Sen. John McCain discovered. The Air Force was simply going to lease 100 planes from Boeing, but that deal fell apart when a probe unearthed Boeing’s illegal hiring of a former Air Force procurement officer.

Then, when the contract was subjected to open bidding, it was awarded to a team led by Northrop Grumman and the parent company of France’s Airbus. But the GAO found serious mistakes in the process that might have cost Boeing the deal.

For instance, Northrop Grumman was informed early on that it had to make adjustments to meet a key requirement. Boeing was told that it had met that requirement, when, in fact, it had not. The Air Force kept Boeing in the dark about that shortcoming, which ultimately counted as a major strike against the company.

The GAO found several other major errors in the process, which left U.S. Defense Secretary Robert Gates little choice but to reopen the contract. He has chosen to remove the Air Force from the process and to place it in the hands of Pentagon civilians.

But that doesn’t change the fact that procurement scandals are probably percolating elsewhere. It’s great that the tanker contract is getting heightened scrutiny, but Congress needs to make sure that a wider net is cast.


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