- The Washington Times - Friday, September 25, 2009

The Air Force is poised to reopen the competition between rivals Boeing Co. and Northrop Grumman Corp. for a troubled $35 billion tanker contract.

The Pentagon has tried and failed twice to award a contract to replace its Eisenhower-era fleet of tankers that refuel military planes in flight. The last attempt in early 2008 was overturned on appeal and led Pentagon leaders to temporarily revoke the Air Force’s authority to award a contract. The 2004 award to Boeing was undone by an ethics scandal that resulted in prison terms for a former company executive and a former high-ranking Air Force official.

“After eight years, we can finally get on with this program,” Rep. John P. Murtha, Pennsylvania Democrat, said Thursday.

Mr. Murtha chairs the House Appropriations Committee’s subcommittee on defense. He was one of several lawmakers briefed by Air Force Secretary Michael Donley and other Pentagon officials on the latest request for bids - due out Friday - on the tanker competition.

The Pentagon’s briefing materials said the Air Force is seeking to reduce the number of requirements to replace its aging tankers to 373 from 800, in a bid to make the process more transparent.

“This time we will be crystal clear about what we want and what the bidders need to do to win,” according to the briefing.

The department also changed course on two other issues. The winner will be based on “best value” and not price, and the deal will be a fixed-price contract. The switch from a cost-plus pact means the contractor will be paid a negotiated amount regardless of extra expenses.

“At this point, neither (company) knows enough about the selection process to figure who is better off with the new terms,” said Loren Thompson, a defense consultant for the Lexington Institute.

Richard Aboulafia, aerospace analyst for the Teal Group, said despite a strong start, the Air Force’s efforts won’t be enough to shield the contract from political bickering on Capitol Hill.

“It’s tough to be optimistic of avoiding yet another political firestorm, but this is the best chance they’ve got to start with,” Mr. Aboulafia said.

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