02/28/10 — Davis proposes solution to tanker deal debate

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Davis proposes solution to tanker deal debate

By Matthew Whittle
Published in News on February 28, 2010 8:12 AM

Since 2003, the Pentagon has tried, and failed, to replace the Air Force's aging KC-135 air refueling tankers with new models.

Now, with controversy unfolding again and a contract expected to be awarded by September, state Sen. Don Davis, D-Greene, has a proposal that he believes could be a compromise to what has been a long and contentious bid process, and one that could create jobs in Wayne County.

The contract, which is estimated to be worth about $35 billion for 179 tankers -- the first of three phases to replace all 530 airplanes in the Air Force's current 50-year-old KC-135 fleet -- has already been awarded and overturned twice.

Originally awarded to Boeing, it was overturned following an ethics scandal that resulted in prison sentences for a former company official and a former Air Force official. Then, in 2008, it was nixed again after being awarded to Northrop on complaints by Boeing about the bid evaluation process.

That bid awarding also created controversy because Northrop, in partnership with Airbus parent company, Paris-based European Aeronautic Defense and Space Co., beat out the Washington state based Boeing, leading to calls for the government to "buy American."

However, if Northrop were to get the contract, much of the assembly would be done in Alabama, where as many as 5,000 jobs could be created. Locally, a Northrop win is likely to also mean hundreds of jobs as AAR Cargo Systems is expected to be a part of Northrop's construction process, Davis said -- an amount also cited by local officials in 2008.

"We've got to push for jobs everywhere we can, and we're talking high-paying jobs here," David added.

Northrop, however, is now threatening to pull out of the process after the Pentagon unveiled its latest bid proposal Wednesday, saying that little was done to satisfy the company's concerns that the terms were skewed against its larger, more expensive plane.

A Northrop pullout would leave Boeing as the lone


For their part, Pentagon officials are defending the proposal.

"We believe that both offers are in a position to win this competition," Air Force Secretary Michael Donley said.

Added Deputy Defense Secretary Bill Lynn: "We think we've put forward a balanced and fair competition."

Lynn declined to say what the Pentagon would do if it's faced with only one contract bid for the program.

"When we get to that point we'll address that question," he told reporters. "I don't want to go beyond the statement that we have. ... We are hoping that we don't have to."

That, though, is one reason Davis and others are proposing a compromise -- a dual-source procurement process in which the contract is basically split between the two companies.

"There's no need to pick one over the other," Davis said.

Such a process, he explained, would not only create jobs in Wayne County, but also should speed up the timetable for replacing the current tanker fleet, which is used by Seymour Johnston Air Force Base's 916th Air Refueling Wing.

It's an idea that has support among various local, state and national Alabama politicians, and one Davis plans to soon present to members of North Carolina's congressional delegation.

Other groups have also come out in support of splitting the contract -- a new nonprofit, nonpartisan coalition, American Jobs Now, and a Gulf Coast aerospace and aviation business and economic group, The Aerospace Alliance. Both groups are motivated by the possibility the creation of 100,000 jobs stemming from a dual contract to build 36 tankers a year rather than the currently proposed 12.

And while Davis acknowledged there could be issues of cost and efficiency stemming from the fact the planes would be built on two different platforms that would need to be worked out, he said he believes dual-source procurement is an option that should be examined.

"This is something I think is worth looking into," he said. "I think we need to make sure every possibility is being fully considered and weighed, and that we're exploring all our options."

Pentagon officials have not weighed in publicly on the idea of a dual-source procurement process, but in the bid proposal, it does state that the intention is to award only one contract, though it can choose to award multiple or no contracts.

-- The Associated Press contributed to this report.