The Pentagon's plan to acquire tankers is widely seen as a glorified hand-out to Boeing. But is protecting a national asset such a bad idea?
With apologies to US Secretary of Defense Donald Rumsfeld, it has been a long, hard slog for the Pentagon's plan to acquire 100 air-to-air refuellers for the US Air Force. The situation worsens with news that a key official connected to the lease/buy deal struck with Boeing for 767 tanker intends to plead guilty this week to a conspiracy charge.
While the time to radically repair the programme's image expired long ago, the air force can restore a degree of legitimacy to the 30-month-old effort by finally admitting - and embracing - what the world already knows: the lease plan, in any of its reincarnations, is a glorified hand-out to Boeing. What the air force insists on calling a best-value solution looks more like a cynical ploy to play games with its own acquisition guidelines.
But it does not have to be this way. Portrayed differently, the same plan is not an inherently bad thing, and it may even be reasonable to expect the air force to make a case for it. The service's cause would also be served if it dropped its tiresome charade that the tanker deal follows the letter and spirit of its own acquisition policies. There is an alternative approach: adopt the position that what is good for Boeing is not necessarily bad for national policymakers.
That is, reshape the debate in the US Congress into a question of industrial policy, and finally eliminate this never-ending referendum - and its devastating consequences - over whether the deal's questionable terms are scandalising the air force's acquisition system.
The question being asked now is whether the government's buyers should stretch and perhaps break the rules to favour a well-connected contractor. But the debate should be about whether the air force should knowingly prop up a critical supplier in need. After all, it is an acceptable and widely practised national policy - in limited cases - to protect and sustain strategically valuable industrial assets, as long as contract pricing and terms are made reasonably fair. It is time to reconsider the tanker deal in this light, but it is up to the air force to make the point.
The air force has the right to argue that coming to Boeing's aid, in singular cases, makes good industrial strategy. A tanker deal rescues the 767 line, insulates Boeing from a commercial market crisis, saves hundreds of jobs and retains valuable skills inside national borders.
Yes, it may not offer US taxpayers the best deal in a competitive market, nor ensure the military customer buys the best solution. Yes, there are drawbacks to the plan, but these arguments should be the centre of the debate, not a sideline to the air force's ongoing sideshow. The idea is not new to the rest of the world, or to even the US government, despite an otherwise admirable preference for free markets.
In 1977, for example, the air force awarded a $28 million contract to McDonnell Douglas at a time when commercial orders for the DC-10 were becoming scarce. The money launched the development of a tanker variant of the DC-10-30CF, which was renamed the KC-10. Production orders for 60 aircraft followed, sustaining DC-10 production until the development of the MD-11 derivative in 1986.
As it stands, the air force would have to think creatively to make a bigger mess of the current situation. If the original objective of the tanker deal was to fast-track a replacement for an ageing Boeing KC-135 fleet, it has been undermined by the delays. There is little chance now that a deal can be completed before 2005, the year the air force was expected to launch a competitive KC-135 replacement programme called KC-X. If the goal, rather, was to give Boeing's commercial sales a boost, the damage caused to the company's reputation and the turmoil created by the ousting of chief executive Phil Condit and chief financial officer Mike Sears have drained the value of any future profits.
Even more, the air force's actions have attracted a powerful enemy in Senator John McCain, who has single-handedly derailed the tanker plan and appears set to mount a similar challenge to the air force's prized Lockheed Martin/Boeing F/A-22 stealth fighter.
For a growing faction of lawmakers, it is possible that the mistrust and anger generated by the air force's flawed approach to the tanker scheme risks skewing the focus of a potentially useful debate on the F/A-22. Lawmakers should consider the significance of the F/A-22 to the industrial base, including potential alternatives modelled on the US Army's post-Comanche plan, and the USA's long-term defence capabilities, and not get sidetracked by the cloud of suspicion of air force machinations created by the tanker ordeal.
Source: Flight International
