Boeing Likely to Lose Air Force Contract
In a last-ditch effort to prevent a European aircraft maker from winning a lucrative U.S. Air Force contract to furnish a fleet of new refueling tankers, a group of lawmakers successfully passed a measure that would require the Defense Department to take into account any unfair competitive advantage the company may have had.
Airbus and its partner EADS have been battling with U.S. aircraft maker Boeing over the contract for nearly a decade. The acrimonious bidding process is already spilling into its ninth year. Both aircraft manufacturers have bitterly battled over the lucrative $35 billion contract. The process has become a politically sensitive issue plagued by ethics scandals, bribes, investigations and, of course, trade disputes.
Boeing officials expressed doubt earlier this month that their company would emerge as the winner, and lawmakers are fighting back in order to level the playing field in what appears to be the eleventh hour.
Washington Democratic Reps. Jay Inslee and Rick Larsen inserted the Defense Level Playing Field Act last week. The legislation is designed to compel the Pentagon into considering the fact that the World Trade Organization found that Airbus has received illegal subsidies to the tune of $20 billion in the form of so-called “launch aid.”
The ruling, however, has not stopped the Pentagon from leaning toward accepting the European company’s bid over the homegrown aircraft maker.
“The conclusion you come to is that probably Boeing is going to lose this,” Loren Thompson of the Lexington Institute told The Seattle Times.
The bill is an attempt to force the Pentagon into reconsidering the case that has actually already decided to award the contract to Airbus. However, it holds no weight because the Senate failed to address the issue before it broke for holiday recess.
“Passage of this tanker legislation continues to put pressure on the Pentagon to do the right thing and give our American workers a fair shot at competing for the KC-X aerial refueling tanker,” said outgoing Rep. Todd Tiahrt (R-KS), according to Politico. “Congress is sending an important message to the administration and the Air Force that we will not tolerate turning a blind eye to illegal foreign subsidies and giving foreign workers a competitive advantage over American workers.”
A Senate panel will hold hearings on the matter in January. The panel will look into the fact that the Pentagon inadvertently released confidential information about the bids to the rival companies.
At stake are14,000 American jobs in the near-term. Furthermore, the winner of the contract will be provided a built in advantage in future competitions, which is significant because the Air Force will likely replace its entire fleet of tankers again in the near future at an ultimate cost of $100 billion.











