US Senator seeks to bind KC-X decision to illegal subsidies

Washington DC
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Illegal subsidies would have to be factored into the US Air Force selection process for the KC-X tanker contract if Congress passes legislation proposed today by a Washington-based lawmaker.

Senator Patty Murray, a Democrat, introduced the proposal as an amendment to the Senate version of the National Defense Authorization Act of 2011.

If passed, the bill would require the USAF to "consider any unfair competitive advantage" in the KC-X acquisition process.

"There is no bigger advantage than launch aid," Murray says.

The proposal seeks to legally combine an ongoing trade dispute between the US and European Union over commercial aircraft subsidies into the lengthy and politically charged competition for the KC-X contract.

In separate rulings since July, the World Trade Organisation has decided that both Airbus and Boeing have benefited from unfair trade practices, although launch aid was singled out in the case against Airbus.

Meanwhile, the USAF is considering bids based on the Boeing KC-767 and EADS North America KC-45, based on the Airbus A330-200, for the tanker contract.

The USAF plans to select a contractor before 1 January to deliver 179 tankers to replace the Boeing KC-135R over the next 15 years.

Department of Defense and USAF officials have been clear that illegal subsidies are not being factored into the evaluation of both bids.

"We believe that the Department of Defense should be allowed to run the fair and open competition to which it is committed," says EADS NA. "We leave it to the department to comment on the extent to which this or any legislation would impact that objective. We remain committed to competing on the merits of our tanker, and in meeting the needs of the warfighter."