Pentagon delays $35B Air Force tanker decision

Wednesday - 9/10/2008, 12:02pm EDT

The Defense Department will wait until the next administration to award a disputed $35 billion contract to build a new fleet of aerial refueling tankers.

Rep. Norm Dicks, D-Wash., says the Pentagon has canceled the latest round of bidding between Boeing Co. and Northrop Grumman Corp. for the 179 planes, and now plans to hold a new competition next year.

Northrop won the contract earlier this year, but the competition was reopened after the Government Accountability Office found fault with the decision.

According to a Defense Department press release:

Secretary Gates, in consultation with senior Defense and Air Force officials, has determined that the solicitation and award cannot be accomplished by January. Rather than hand the next Administration an incomplete and possibly contested process, Secretary Gates decided that the best course of action is to provide the next Administration with full flexibility regarding the requirements, evaluation criteria and the appropriate allocation of defense budget to this mission.

Secretary Gates stated, "Over the past seven years the process has become enormously complex and emotional - in no small part because of mistakes and missteps along the way by the Department of Defense. It is my judgment that in the time remaining to us, we can no longer complete a competition that would be viewed as fair and objective in this highly charged environment. The resulting "cooling off" period will allow the next Administration to review objectively the military requirements and craft a new acquisition strategy for the KC-X."

In making this decision, it was concluded that the current KC-135 fleet can be adequately maintained to satisfy Air Force missions for the near future. Sufficient funds will be recommended in the FY09 and follow-on budgets to maintain the KC-135 at high-mission capable rates. In addition, the Department will recommend to the Congress the disposition of the pending FY09 funding for the tanker program and plans to continue funding the KC-X program in the FY10 to FY15 budget presently under review.

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DoD - Press Release (FederalNewsRadio doc)

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