Boeing wins protest of aerial-tanker award

Boeing Co. deserves another chance to bid on the $35 billion Air Force aerial-tanker contract won by rival Northrop Grumman Corp., a government agency said Wednesday.

“The Air Force had made a number of significant errors that could have affected the outcome of what was a close competition,” the Government Accountability Office said. “We therefore sustained Boeing's protest.”

Boeing appealed to the GAO after Northrop and partner European Aeronautic, Defence & Space Co. won the contract Feb. 29, snaring a program that had been Boeing's for more than half a century. Chicago-based Boeing claimed changes the Air Force made during the competition favored Northrop.

While the GAO ruling isn't binding, “the outcome here now is obvious,” Loren Thompson, an analyst at the Lexington Institute, an Arlington, Va.-based public policy research group, said in an interview.

“The Air Force will have to revisit the competition and start over.”

Boeing beat the odds in winning support from the GAO, the investigative arm of Congress that sustains only one in four protests. Winning the protest also helps Boeing keep its main commercial-aircraft rival, EADS's unit Airbus SAS, from getting a foothold in the U.S. defense industry. Airbus took the No. 1 commercial-plane position away from Boeing in 2003.

While the Air Force isn't required to follow the GAO's recommendation, the service has to explain to Congress if it chooses to ignore the advice. The Air Force must now respond within 60 days with a course of action based on the GAO findings.

The GAO's full 69-page ruling remains under protective order because it contains proprietary information.

In a three-page release explaining the decision, the agency said the Air Force failed to assess relative merits of the bids in accordance with evaluation criteria; improperly credited Northrop for exceeding aerial-refueling parameters; and didn't adequately explain its finding that Northrop's tanker could refuel all current fixed-wing aircraft as required.