Contracting lessons from the Air Force tanker saga

Tuesday - 11/9/2010, 4:51pm EST

Shane Harris, senior writer, Washingtonian Magazine.

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The Air Force tanker is essential to U.S. warfighting. But the tankers in use now are 50 years old and the decade-long procurement to replace them has been plagued with scandal.

The tanker saga has cost a CEO his job, sent two officials to jail and wasted millions of dollars, according to an article in Washingtonian Magazine by Shane Harris.

Harris joined the DorobekINSIDER to discuss what went wrong with the tanker procurement and the lessons to be learned.

The move to replace the tankers started in 2001. From the beginning, politics played an "outsized role," Harris said.

Sen. Ted Stevens (R-AK), a supporter of Boeing Company, pushed to allow the company to lease commercial aircrafts modified for the Air Force. Leasing would cost $20 billion, less upfront costs than buying new planes, according to Harris' article.

In 2003, the CEO of Boeing resigned amidst controversy that as Boeing was negotiating a contract with the Air Force, the company was also negotiating with a senior Air Force official to work at Boeing.

Harris said what happened with the Air Force is a "cautionary tale," and other agencies can learn what not to do in the contracting process.

Harris said agencies need to simplify the contracting process. Contracts like the one for the Air Force tanker are "enormously complex" and contain hundreds of individual requirements. The complexity opens the contracts to protests.

Agencies also need to "take the politics out," he said.

"It used to be the case that politics would've stopped at the water's edge when it came to national security ... but that has not been the case with this contract," Harris said.

By late December, the Air Force is planning to award a contract for new tanks worth up to $40 billion, according to the article.

But even if a contract is awarded in the coming months, it will be years before the first couple hundred tankers are built, Harris said.

Harris said it's a good thing that the current tankers have held up as long as they have, but they're "going to have to keep holding up for awhile."