CNBC’s is reporting Defense Secretary Robert Gates has decided the Air Force will rebid the tanker contract between Northrop Grumman/EADS and Boeing.
This isn’t unexpected, but the official announcement is set for 1 p.m. Eastern at the Pentagon. Boeing was trading higher on the news, Northrop slightly lower.
Sen. Patty Murray’s (D-Wash.) office told CNBC the decision is expected
Developing…
Boeing cheerleader and Kansas congressman Todd Tiahrt (Republican) appeared on CNN’s “Lou Dobbs Tonight” this week to further politicize the GAO decision.
Todd Tiahrt and the Boeing Tanker Deal (YouTube)
Highlights:
“No, it doesn’t make any sense,” Tiahrt said. “And this GAO report was scathing. It said that the Air Force violated their own rules. They misled the Boeing Company. They miscalculated the cost and the Boeing Company was actually the lowest. So, it’s really difficult for — to understand why they would bend over backwards to outsource our national security to the French.”
(snip)
DOBBS: And no mention of the fact that Airbus is subsidized, that EADS is in the business of subsidies. But, again, this idea, I want everybody in this country to have a job. I’m sorry, that’s just me.
I’d like the folks down in Alabama to have their jobs in this. I’d like the folks in Kansas and in Washington, all around the country working for Boeing and Northrop Grumman to be working on this project together. Is that a possibility here?
TIAHRT: Well, not under the current ground rules.
DOBBS: Well, let’s fix it! Let’s fix the ground rules. You’re the boss. You’re in congress.
TIAHRT: That’s why I put this RFP together that lays out a level playing field for American workers. It would allow a Northrop Grumman and a Boeing to team together in this situation.
(snip)
It may be a good or bad thing, but the Northrop Grumman guys - Bonner, Sessions and Shelby aren’t being as aggressive as the Boeing folks - Tiahrt, Rep. Norm Dicks (D-Wash.), Sens. Pat Roberts (R-Kansas), Patty Murray(D-Wash.) and Maria Cantwell (D-Wash.) and to a lesser extent, Sen. Sam Brownback (R-Kansas).
Mobile’s hopes for an aircraft assembly plant just took a serious hit. As shown in the latest edition of Lagniappe, Boeing claimed the Air Force made math errors in their evaluation of the proposals. CNBC is reporting the U.S. General Accounting Office has also found that to be the case and called them “significant errors.”
Boeing (NYSE:BA) is trading sharply higher on the news, while Northrop Grumman (NYSE:NOC) has taken a slight hit. Although the Air Force doesn’t have to abide by the GAO’s ruling, the likely outcome is for another round of bidding for the tanker contract experts say.
In February, the Air Force awarded a $35 billion contract for refueling tankers to a partnership of EADS and Northrop Grumman. The GAO is claiming the U.S. Air Force misled Boeing and is recommending the U.S. Air Force re-open discussions and re-evaluate bid proposals.
[Click Here for GAO statement] (h/t Chip Drago at MobileBayTimes.com)
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.
This was first reported by Reuters and just confirmed on CNBC, but the U.S. Air Force admitted it made a significant math error in determining the cost effectiveness of the Northrop Grumman/EADS prototype versus the Boeing prototype.
According to CNBC, Northrop Grumman maintained its bid is still the best and that its merits weren’t based on the advantages given to it by math error.
Here’s another round of criticism directly aimed at Rep. Jo Bonner on earmarks and being selected to the Appropriations Committee. Fox News interviewer Gregg Jarrett presses Bonner on earmarks, reform and the ethics of other members - including former Speaker of the House Dennis Hastert.
Transcript below:
Jarrett: “President Bush challenged Congress on this issue in his last State of the Union address in January. But weeks, later when a GOP seat opened up on the Appropriations Committee, it did not go to Washington’s most tireless anti-earmark crusader Rep. Jeff Flake. Instead, Jo Bonner, a less senior Republican from Alabama, who’s been criticized for earmarking millions himself got the spot.”
Jarrett: “The abuse of earmarks has been a big issue and in fact many have said that may be one of the reasons why Republicans lost control of Congress. Do you agree?”
Bonner: “I do. It can be an addiction and it can be a cancer that can corrupt the process. Now, that said, all earmarks are not bad.”
Jarrett: “You’ve given earmarks – more than a $1 million to clients represented by lobbyists, who have in turn contributed thousands of dollars to your campaign. Do you think it’s right?”
Bonner: “Now, you’re question makes it suggests what I’ve done inappropriate or illegal.”
Jarrett: “I’m asking you. Is it inappropriate?”
Bonner: “It’s not illegal. And I don’t believe it is inappropriate.”
Jarrett: “Is it inappropriate?”
Bonner: “If you look at the balance of the contributions that I’ve received and probably most members of Congress – it’s come from individuals who live in our district and who support the philosophy of the member of Congress or the candidate who’s running for that seat.”
Jarrett: “So what does Congressman Bonner think of the cases we uncovered?”
Jarrett: “Dennis Hastert earmarked $207 million to build a highway out to rural land that Hastert bought up and once the president signed the bill – sold the property, making millions of dollars in profits. Is that wrong?”
Bonner: “Speaker Hastert has denied the facts that you’ve stated are accurate.”
Jarrett: “I looked at the records.”
Bonner: “If that is in fact true, then not only was it wrong, it would be indefensible.”
Jarrett: “Paul Kanjorski, member of Congress – earmarked $10 million over four years to a company that’s run by his family.”
Bonner: “If a member of Congress is personally benefiting or his or her family is personally benefiting then that may involve the Department of Justice in which case I can’t comment on it.”
Jarrett: “Why not you’re a public official. You can comment on anything you want to.”
Bonner: “I’m also on the House Ethics Committee and if the matter were to come before our committee for review, then I am not allowed to discuss that.”
Jarrett: “The Ethics Committee weighed on Congressman Ken Calvert. He set up a transportation center within two miles of seven properties that he owned. Right or wrong?”
Bonner: “Gregg, I’m not going to answer questions about members of Congress and what they have allegedly done.”
Jarrett: “Come on, isn’t this abusive? Isn’t this precisely what Americans hate?”
Bonner: “I understand the way you have phrased the question that would lead many people to say, ‘Absolutely.’ I’m not familiar with the circumstances, but let me just tell you, the 435 members of Congress – 420 of them, probably even more are not doing this for personal enrichment.”
Jarrett: “Bonner says he is calling for more transparency in earmarks and has personally cut his requests in half this year. His party has proposed a one-year moratorium on all earmarks.”
Bonner: “Unfortunately, Speaker Pelosi – her leadership team would not meet us halfway on that.”
It’s a rather bizarre place for local activism, but this morning I got a Facebook invitation to join a group “Support Northrop Grumman.”
The online group, (linked here if you have an account) urges its members to participate in an online survey set up by the House’s Web site.
“As you will notice, the numbers are rather skewed at the moment and if we don’t stand up and shout, we may lose something that is extremely valuable to Mobile, Alabama and the entire Gulf Coast,” the group’s page says.
MySpace has Eliot Spitzer’s call girl. Facebook has Northrop Grumman. How’s that for social networking?
It’s probably not the national spotlight Mobile’s congressman wanted, but Jo Bonner was written about in Bob Novak’s column in The Washington Post on March 11:
“House Republican Leader John Boehner, who, unlike McConnell, does not earmark and criticizes the practice, flinched from making a bold move as this year’s session began. He could have led the House Republican Conference to endorse a yearlong moratorium and name reformer Jeff Flake of Arizona to a vacancy on the Appropriations Committee.
Instead, the Republicans picked Jo Bonner of Alabama, who spent 18 years as a House staffer before his election in 2002. Bonner has voted against Flake in 49 out of 50 attempts to kill earmarks. He has promised his Mobile area constituents that they would get “fair value” for their tax dollar — the justification for bringing home the bacon from Washington. Incredibly, Boehner hailed Bonner’s selection as a step toward earmark reform.”
Novak, whose column is nationally syndicated, doesn’t have a lot of faith in Bonner to be the ultimate fiscal conservative. His criticism is a little unfair. Bonner isn’t likely to be quite as hawkish as Flake, but he won’t line up at the trough like Jack Murtha, the appropriations chair, or even Alabama’s senior senator, Richard Shelby.
Nonetheless, the Novak’s “shout-out” is the latest in national attention Bonner has gotten since getting the assignment on the House Appropriations Committee from conservatives demanding earmark reform.
The mainstream consensus among most in Washington is that Boeing was the victim of some shenanigans by the U.S. Air Force. In fact, it is hard to find anyone beyond the Alabama congressional delegation willing to stand up for the Air Force’s decision.
Speaker of the House Nancy Pelosi (D-Calif.) even used the tanker award as political ammo against probable Republican nominee Sen. John McCain - who forced the Air Force to bid this enormous contract, instead of the convoluted plan which Boeing would lease the aircraft to the air force, resulting in criminal convictions of a Boeing executive and an Air Force procurement officer.
But for all his faults, Sen. Richard Shelby has been the one on the PR crusade, defending the air force and explaining why this is not a loss for the United States. There seems to be a void in the media of EADS/Northrop Grumman defenders and Shelby has stepped up to the plate.
After making several cable news TV appearances, Shelby had an op/ed published in today’s Financial Times:
“As members of Congress, we are concerned about US jobs. But any assertion that this award “outsources” jobs to France is simply false. With a new assembly site in Mobile, Alabama, this contract will bring tens of thousands of jobs into the US. According to the job-forecasting tool from the department of commerce, Northrop Grumman will employ about the same number of US workers on the tanker contract as Boeing would have. The Northrop Grumman tanker team will employ about 25,000 US workers at more than 230 supplier companies in 49 states,” Shelby wrote.
The Financial Times, a European-based financial publication, has been very friendly to EADS. Although that probably won’t many critics over who have questioned the award to a foreign contractor when the United States has been deemed to be heading toward economic turmoil, it’s a start.
We know Charles Barkley has thought about running for governor of Alabama in 2014, but what about the upcoming election? Since Rep. Jo Bonner landed an assignment on the House Appropriations Committee, some in GOP circles are speculating this will set him up for a run for governor in 2010.
“Look, I love my job,” Bonner said. “I feel like this new committee assignment will give me a chance to – and I don’t mean in terms of bringing more projects back to Alabama – but I think this is a good fit, even though the environment is different and we’re going to have to make some tough decisions.”
With today’s announcement that an air tanker assembly plant will be in Mobile, Bonner could be riding a wave of popularity that would make him a viable candidate. But, Bonner told Lagniappe he wasn’t sure if he wanted to dedicate his focus toward a run at the governor’s mansion in Montgomery.
“I like what I’m doing, and I’m confident we’ve got a good list of qualified men and women that are out there that would be able to focus the time and resources in the tune of $15 million to run for governor.”
Bonner told Lagniappe last month he disliked raising money. He didn’t rule it out completely.
“I’m not going to tell you that I one day won’t consider looking down the road, but right now the road I’m looking down is being the best congressman I can be for southwest Alabama.”
For now, he contended it wasn’t in his plans.
“I don’t see a scenario. I think the person who runs for governor will have an obligation – on our [the Republican] side – to continue build on the foundation that [Gov.] Bob Riley has laid for us and I think there are a lot of people out there that will build on that foundation and keep us moving in the right direction.”
He dismissed speculating on what could happen in 2010 because he is facing a reelection bid for his congressional seat, even though he is heavily favored in the race.
“I just don’t think it just serves any purpose to speculate about an election that’s two years away, when I’ve got one that six month, seven months away.”