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From Perp To Victim
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Published: July 4, 2008
Four years ago, Boeing was the corporate villain, the powerful Chicago-based company cheated to win a lucrative contract to build tankers for the Air Force. An outraged Congress killed the deal and forced the Air Force to rebid the contract. Boeing was fined $615 million, CEO Phil Condit resigned and a Boeing executive and an Air Force procurement officer went to prison.
Today, however, it looks like Boeing is the aggrieved - and sympathetic - victim of Air Force incompetence (or worse).
Hang on. This story gets a little bumpy.
A few months ago, the Air Force snubbed Boeing and awarded the new tanker contract to the team of Northrop Grumman and the European-based parent of Boeing's archrival, Airbus SAS.
Boeing officials protested, claiming the competition wasn't fair. They appealed the decision. That sounded like sour grapes to a lot of people. Yes, we thought so too.
But flash forward to last month, when the Government Accountability Office announced that it agreed with Boeing. The competition was unfair to the company. It said the Air Force should seek revised bids and pick a new winner.
The GAO concluded that the Air Force made "a number of significant errors" that could have affected the outcome of the competition for the $35 billion contract. The Air Force conducted "misleading and unequal discussions" with Boeing, informing the company that it had "fully satisfied" a key performance measure. It later changed that assessment, but failed to notify the company. The Air Force also erred in its evaluation of the likely costs of operating the tankers over time. Had those errors been corrected, the analysis would have shown Boeing's offer was lower, the GAO reported. And on and on.
Air Force officials were reported to be shocked by the report. Please spare us. Those kinds of errors are so glaring and so systematic that they raise questions about whether the Air Force, burned in the last tanker deal because it steered the contract to Boeing, decided to steer the next iteration of the deal away from Boeing. Just to make everything look fair?
The Air Force has 60 days to respond. Air Force officials were reported to be studying the report. They stopped short of saying they would rebid the contract. Those officials should save their breath and stow their reading glasses. They need to scrap the bid and reopen the process.
After the first scandal, the Air Force said it had learned its lesson. Its top weapons buyer was told to infuse "integrity and transparency" into the acquisition process. That hasn't happened. The overwhelming impression here is of a rigged process, irretrievably tainted.
The next time the Air Force awards this contract - whether it goes to Boeing or not - has to be its last.
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