Gates: Pick cheapest tanker bid that meets regs

[September 24, 2008]  WASHINGTON (AP) -- Defense Secretary Robert Gates offered some advice Tuesday on how the next administration should settle the bitter bidding war for the $35 billion tanker contract: Set basic requirements, then choose the cheapest.

He said that since both bidders met the technical qualifications for the refueling aircraft, he toyed with the idea of changing the competition in the final days and making a decision based on which one offered the best deal.

"Who offered the cheapest, who could come up with the cheapest number for us to go forward," Gates told the Senate Armed Services Committee. He said he ultimately ruled out the idea because it would be unfairly "changing the rules at the end of the game."

The contentious battle for the contract has raged on for seven years, largely between Boeing Co. and Northrop Grumman Corp.

Earlier this year, the team of Northrop and Airbus parent European Aeronautic Defense and Space Co. was awarded the contract, but bidding was reopened after a Government Accountability Office report found serious flaws with the Air Force's decision.

The Pentagon had hoped to make a new contract decision by year's end, but announced the latest delay on Sept. 10.

Gates said he ended this round of bidding, effectively punting the decision to the next Pentagon chief, because it became clear he couldn't get the job done until the last days of his tenure.

"Frankly, I didn't like the smell of approving a potentially hundred billion dollar contract or opportunity in the last day or two of being on the job," he said.

Sen. Jeff Sessions, R-Ala., told Gates he was disappointed that the competition was not completed, and said he had heard from senior Pentagon officials that the Boeing aircraft was 25 percent more expensive.

Gates did not comment on the bid details, but said he would recommend that the next administration move quickly and take a straightforward approach: "Does the plane meet these technical military requirements and ... who will provide the taxpayer with the best deal?"

The Pentagon has tried and failed for seven years to award a contract to replace its aging fleet of current tankers that refuel military planes in flight. Some of the planes are nearly 50 years old, and senior defense officials have said they need to be replaced soon.

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On the Net:

Defense Department: http://www.defenselink.mil/

[Associated Press; By LOLITA C. BALDOR]

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