GAO Judgment on Tanker Decision Expected by Thursday
The U.S. Government Accountability Office (GAO) is expected to make a judgment on the U.S. Air Force’s decision to award the EADS (EPA:EAD) and Northrop Grumman (NYSE:NOC) CNBC’s Jane Wells is reporting.
Her analysis was that although the Air Force isn’t bound by GAO’s findings, it would be tough for the Air Force to go against it in this current political climate. Boeing (NYSE:BA) is basing its formal protest on the following two major points - 1) The Air Force favored the EADS/NG prototype because it is larger, but Boeing claims it didn’t know that was what the Air Force wanted and 2) Claims the European government is giving EADS subsidies, making it more difficult for Boeing to compete.
If the GAO rules in favor in Boeing, the Air Force is likely to re-open bidding. If they rule in favor of Mobile, it’s another hurdle cleared, but they still face pushback in Congress from the pro-Boeing lobby, including the likes of Reps. Norm Dicks (D-Wash.) and Todd Tiahrt (R-Kan.)
But, I see according to today’s Political Skinny, the good folks back home in Mobile are planning a parade to celebrate, regardless the outcome.
Tags: Boeing, EADS, GAO, northropgrumman
June 16th, 2008 at 12:11 pm
The Air Force will announce the award stands as is.
They don’t like being pushed around by Boeing, to whom they have been
very nice over the years, and the Air Force isn’t afraid of a bunch
of squawking congressmen or lobbyists.
It took the Air Force three years to render the decision, most people
will agree that’s long enough to figure out who offered the best
all around product.
Speaking of subsidies, Boeing has tallied up over 6 BILLION in subsidies
from not only the U.S but from Japan and Italy as well.
June 16th, 2008 at 12:22 pm
Don’t be so sure. This could get really ugly. The Democratic-controlled House could make this an election year issue. Pelosi has threatened to do as much.
If the bureaucrats at the GAO decide against Boeing, there would be enough momentum in Congress to strip the funding.
June 16th, 2008 at 1:23 pm
There won’t be enough Democrats in the House or the
Senate to stop the funding.
It’s really a non-partisan issue,
with Republicans and Democrats on both sides.
In the end it will all come down to a lot of wasted taxpayer
time and money and the Air Force getting exactly what they
wanted and awarded in the beginning.
If Nancy makes a big deal out of it I’ll remind her I knew
her when she and Dianne Feinstein were mere supervisors
in San Francisco but I’m back in Mobile so back down
or I’ll turn-coat and launch an anti-Obama backlash
that will likely cost them the presidency and a few seats
in both chambers.
June 16th, 2008 at 2:38 pm
With all the populist themes in the Obama/Clinton race - like Mark Penn being cut loose for having ties to a Colombian free trade agreement, with rust belt being in play with job losses that have made Lou Dobbs-style protectionist policies popular, there will be a push to see EADS doesn’t get this nationally.
Boeing blame game is played on Sen. McCain
By Roxana Tiron
Posted: 03/06/08 07:40 PM [ET]
http://thehill.com/leading-the-news/boeing-blame-game-is-played-2008-03-06.html
[snip]
Several high-ranking House Democrats have charged that McCain is partly to blame for the Air Force’s surprise decision last week to award a contract worth as much as $40 billion to a team that includes Northrop Grumman and EADS, the parent company of Airbus.
They argue that McCain should not have pushed for a new bidding process five years ago that opened Boeing up to competition from Airbus after a deal in which Boeing would have leased tankers to the Air Force fell apart amid corruption charges. The unraveling of that deal led to the competition won by the U.S.-European partnership last week.
“He could have reformed the contract that Boeing got rather than reopening it and sending the jobs to France,” said a critical Rep. Rahm Emanuel (Ill.), the chairman of the House Democratic Caucus.
[snip]
That hasn’t stopped Democrats from trying to capitalize on an opportunity to attack McCain and play tough on his signature issue of national security. They argue that by awarding the contract to a consortium that includes Airbus, the Air Force is endangering the U.S. defense industrial base.
“We will not have the industrial and technological base necessary to ensure our national security because it will fade, it will diminish, it is not strengthened,” House Speaker Nancy Pelosi (D-Calif.) told reporters this week.
While Pelosi refrained from blaming McCain, she said that because McCain intervened in the Air Force’s dealings, “we have a situation … where this work may be outsourced.”
June 16th, 2008 at 3:11 pm
I don’t see Pelosi crying when I call AOL or a lot of
other tech companies and I find out yes, the weather is
beautiful today here in India. Could I interest you in a pair
of Levi jeans?
I’ll send her a list of
the major companies who not only outsource from America
but also have the guts to move chunks of their operations
overseas and still enjoy many of the benefits offered American
companies.
As for McCain and the previous deals, there is the Sherman
Anti-Trust Act we have to abide by here and having one source
for the tankers with no bidding is not only in violation
of that act, it’s a disservice to the American public to not
be given the opportunity to have the best product available.
Even a kindergarten class can point to the pictures and say,
“Look, that tanker is much bigger. That means it holds more
fuel!”
The best thing they can do is accept the decision once it’s rendered
and get on with other issues of which there are plenty. I don’t see them
eating up a lot of time over this.
June 17th, 2008 at 8:02 am
To buy a critical element of the US Armed Forces from the French is unsupportable idiocy!! When the Shah of Iran bought huge piles of military hardware including fighter airplanes, then was deposed, the US then refused to ship to Iran. Those bought and paid for airplanes sat unused for many years until eventually sold by the US to more friendly users. What convinces the USAF that similarly France would not refuse to deliver, to support, the USAF in the future in some possible squabble? The US set a precedent that now could very easily thwart our policies. And what would be the French position if their then-Prime Minister was one bearing the name of “Abdul Mohammed Al-Hakim” or some similar Arab Islamist name, and a fervent Jihadist Muslim?
June 17th, 2008 at 9:17 am
There are fifty worlds of difference between France and Iran.
There are various bad-case scenarios in any contract awarded.
What if Boeing got mad at GAO or the Air-Force in a payment or other
dispute and refused to continue work on the tankers. Or refused to
deliver the finished goods?
Besides this case is markedly different from the American government
refusing to ship to Iran after the Shah was deposed. All parties
involved in manufacturing and delivery of the tanker are privately
held companies. The Air Force is the recipient.
June 17th, 2008 at 1:46 pm
There are fifty-thousand worlds of difference between a private company in France and a deposed Shah of Iran. And I wouldn’t lose sleep worrying about France going all-out jihad any time soon.
But who knows?
What if the USAF receives nothing but a giant sack of Freedom Fries on delivery day? What then?
June 17th, 2008 at 1:57 pm
I’ve always thought France would make a nice territory of
the United States.
June 17th, 2008 at 4:33 pm
I wonder if we can drill for oil off the coast of the French Riviera?
June 17th, 2008 at 5:32 pm
I’ll piggyback it onto a bill to dredge and drill the Potomac
and see if we can come to a compromise.