Politics Will Decide The Outcome Of The Tanker Competition

Issue Brief

The first thing to understand about the Air Force plan to buy a new aerial-refueling tanker is that it is just a tanker. A flying gas station. Either of the planes being proposed for the mission — the Boeing 767 or the Airbus A330 — could easily accomplish the mission. So the Air Force’s baroque process for selecting the winner, including a ridiculous 373 “mandatory” requirements, isn’t about finding a solution that works. The process is about politics. That’s how it began, when Senator John McCain blocked the award of a sole-source tanker lease to Boeing early in the decade, and that’s how it will end with a split buy sometime in the next decade.

It is now abundantly obvious that Senator McCain’s ill-fated stab at good government will cost taxpayers a lot more money than sticking with what he viewed as a corrupt process. The cost of keeping old tankers operational until the much-delayed new tanker becomes available, by itself, will probably exceed the price-tag of the proposed lease. But that was then, and this is now: the political landscape has shifted so much since McCain forced a competition that it is now impossible to pick a winner. There will be two winners, or no winner at all. Each team has so much political clout and legal talent at its disposal that it can prevent an award it does not like.

Defense secretary Robert Gates doesn’t understand this. Just as he didn’t understand that starting over on the presidential helicopter would cost much more than sticking with the plan. Just as he didn’t understand that building all three Zumwalt-class destroyers at a shipyard in New England guaranteed there would be a fourth, and a fifth, ship in the supposedly canceled class. Because Gates doesn’t “get” the politics of defense procurement, he thinks he can force the Congress to accept a winner-take-all outcome on tankers. But he can’t. By ignoring politics in a business where the only customer is a political system, Gates has assured that on the day he leaves office, we still won’t be building a new tanker.

Business Week analyst Dean Foust may well be right when he argues that the terms of the new tanker solicitation favor the bigger Northrop Grumman-Airbus plane. Northrop’s team did a masterful job of persuading Air Force evaluators to rethink their assumptions about aerial refueling in the first round of competition. But Boeing’s proposed plane is more than adequate, and political power has been migrating in Boeing’s direction since the tanker debate began. Democrats now control the government, and they listen closely to the unions that would build Boeing’s tanker. The World Trade Organization ruling that European subsidies for the A330 were illegal gives Boeing backers additional leverage.

However, even if Boeing’s offering is deemed superior by the source-selection authority, it’s hard to see how a winner-take-all award could get by the likes of Alabama Senator Richard Shelby. Republicans will probably be strengthened in the mid-term elections, and the inevitable Northrop protest of a Boeing win would delay any metal bending until additional Republicans were seated. So the political logic of the situation argues strongly in favor of Representative Jack Murtha’s proposal to split the buy, with each team getting 12 planes per year, and the better bidder getting an added increment to incentivize performance. That might cost $2 billion more per year than the current plan, but by modernizing sooner it would avoid huge expenditures needed to keep the decrepit fleet of Eisenhower-era tankers flying.