Northrup drops out of tanker competition

WASHINGTON (AP/WSFA) - Northrop Grumman Corp. says it won't compete against Boeing Co. for a $35 billion contract to build refueling tankers for the Air Force because it doesn't think it can win.

Northrop's chief executive officer and president, Wes Bush, said Monday that the Pentagon guidelines for the program favor Boeing's smaller refueling tanker and does not provide what Bush calls "adequate value recognition" of the added capability of a larger tanker. That, according to Bush, precludes Northrop from any competitive opportunity.

"The Air Force had a chance to deliver the most capable tanker possible to our warfighters and blew it," said Alabama Senator Richard Shelby (R). "This so–called competition was not structured to produce the best outcome for our men and women in uniform; it was structured to produce the best outcome for Boeing. The Air Force's refusal to make substantive changes to level the playing field shows that once again politics trumps the needs of our military."

Alabama's Senator Jeff Sessions (R): "This is truly a dark day for the American warfighter and for the Pentagon. Today's withdrawal by the Northrop Grumman team is concrete proof that the dramatic changes in the way that the Pentagon will evaluate competing proposals had the effect of eliminating the superior aircraft that was the low bidder in the last competition. Tasked by Congress to conduct a fair competition, the Obama Defense Department rewrote the bid rules in such a biased fashion that only one team felt it could win.

Alabama Governor Bob Riley echoed those sentiments saying, "I don't blame Northrop Grumman for refusing to take part in this charade. The Pentagon and White House have made it impossible for any other plane to be competitive.  It's disgraceful.  If this was not a political decision, then why would the Pentagon intentionally rewrite the specifications from what they originally wanted a year ago? When the Air Force is compelled by politics to select the slower, smaller and older plane, no one can say with a straight face that this is what's best for America or America's warfighters.

The governor added, "Since the RFP was issued, I know how hard Northrop, their partner EADS and the State of Alabama have worked in order to find a way to be competitive. The state even gave additional concessions to make sure we were doing everything we possibly could to be competitive.  But ultimately, this decision to select the other aircraft was sealed when the RFP was issued."

"The unjustifiable overhaul of the Request for Proposals—which went far beyond the narrow problems raised by the GAO—completely abandoned the idea of a game-changing tanker in favor of a smaller, less capable plane," Senator Sessions said. "Of the 14 major changes to the solicitation, 12 favored Boeing's smaller, older aircraft. In the end, the process was skewed, and no one can fault a private company for declining to participate in a government competition engineered to guarantee its failure. The outcome is tragic for our men and women in uniform—who are being denied the best aircraft—and for American taxpayers, who could now be on the hook for the most expensive sole-source contract in history. We know from previous experience that sole-source deals result in less capability and higher costs."

The Obama administration had said such sole-source contracts aren't a good deal for the taxpayer. But industry insiders say there's no other company poised to meet the Air Force's guidelines for the program.

"I hope that the Secretary of Defense will personally review the competition in light of this disastrous result for the taxpayer," Sessions added. "There is no way the Defense Department will be able to get the best price without competition."

(Copyright 2010 by The Associated Press. WSFA 12 News contributed to this report. All Rights Reserved.)