Hampton Stephens is the former managing editor of Inside the Air Force. Now a graduate student at the Institute of World Politics in Washington, he's written for the Boston Globe, TechCentralStation.com and Air Force magazine. This is his first post for Defense Tech.
Almost five years after first launching a doomed program to buy much-needed refueling aircraft -- tankers -- the Air Force is finally ready to begin the effort anew, according to a report in Aerospace Daily.
The years of delays were caused by the ignominious collapse of an ill-conceived Air Force scheme, first hatched in late-2001, to lease, rather than buy outright, Boeing "KC-767" tankers. That plan was the brain-child of former Air Force Secretary James Roche, who resigned in January 2005 in the wake of a number of scandals connected to the tanker plan.
Roche's idea was admirably elegant: by leasing tankers from a third-party (backed by private sector investors) rather than buying them outright and directly from Boeing, the Air Force could avoid the huge upfront costs normally incurred in developing and building aircraft. With the savings, the Air Force could then spend its money on buying shiny new planes -- like F-22 fighters -- rather than on mere replacements for its outdated tanker fleet.
The only problem: The leasing plan would not have saved the Air Force any money. It simply would have kicked the costs down the road, and its total cost -- around $21 billion -- would have far exceeded the cost of a traditional procurement program. Accountants at the Congressional Budget Office and elsewhere soon got wise to this -- and unfortunately for Roche and every Air Force official involved, so did Sen. John McCain. Not only did McCain see the deal as a taxpayer ripoff, but the fact that it seemed a sweetheart deal for Boeing exercised McCain's longtime antipathy to corporate welfare, sending him into conniption fits. In numerous Senate hearings on the matter, McCain resembled a rabid bulldog. Even by McCain standards, his hammering of Roche and other Air Force officials was merciless.
To make a long story short, after McCain got his hands on DOD documents outlining the sordid history of the deal's genesis, Roche's wasn't the only head to roll. Former Air Force acquisition official Darlene Druyun, in fact, ended up in federal prision, convicted on conspiracy charges. It seems Ms. Druyun had secretly talked with Boeing officials about a cushy post-government job even as she negotiated the terms of the tanker deal on the government's behalf.
All this, of course, has been to the benefit of Airbus, Boeing's only real competitor in the market for the kind of wide-body aircraft the Air Force is seeking for conversion to tankers. Boeing's misdeeds were egregious enough that Airbus's European ownership no longer precluded it from competing, even for a Congress prone to vigorously defend the U.S. defense industrial base. Airbus's owners, the European Aeronautic Defence and Space Company, promptly set up a North American subsidiary to capitalize on this good luck, and began making plans to build a U.S. manufacturing facility for its own tanker, the KC-330.
According to the Aerospace Daily story, the Air Force plans to issue a "request for proposals" for the tankers by September. So stay tuned. Because of its strange history, and the international stakes involved in the duel between Boeing and EADS, this competition may be much more interesting to watch than your average Defense Department contract fight.
-- Hampton Stephens
