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No Protest; EADS Urges Close Boeing Tanker Oversight

UPDATED: Rep. Norm Dicks Comments

Arguing that Boeing may well find it difficult to build and fly its airborne tanker on cost and on schedule, EADS NA made clear the Air Force had run the competition with integrity and fairlness and would not pursue a bid protest on one of the largest Pentagon procurements ever.

EADS made clear that Boeing won the competition with a comfortable margin, underbidding EADS NA by almost 10 percent, $20.6 billion versus $22.6 billion. That bid was so slow that EADS NA Chairman Ralph Crosby said he believed it important that Boeing be watched closely to make sure they can deliver at that price and on schedule.  "If they aren't, then they should be held accountable," he said. CEO Sean O'Keefe said the company's friends on Capitol Hill would be watching Boeing to provide oversight.

Crosby said the company decided not to protest because the Air Force "has been absolutely scrupulous in following the rules."

The breadth of that price difference led Crosby to conclude that Boeing made "extremely low-ball bid to achieve their strategic objectives" of keeping EADS out of the American military market.

"When you are in a fixed price game and the other guy decides he is going to win at any cost there isn't much you can do," Crosby said, making it clear that he thought Boeing made a strategic decision to bid low on the tanker to ensure EADS did not start building cargo or tanker aircraft in the United States. He pointed to the fact that EADS would have been ready to fly its first aircraft in 2013, two years earlier than Boeing plans.

The EADS decision drew a kind word from one of Boeing's staunchest supporters on Capitol Hill. “I am encouraged by the announcement today from the European Aeronautic Defence and Space Company (EADS) that it will not seek to prolong the Air Force’s procurement of Boeing KC-46A tankers by protesting the decision made last week," Rep. Norm Dicks said. "This clears the way for the tanker acquisition process to move forward rapidly so that we can begin the replacement of the Eisenhower-era KC-135 tankers. It is clear that the competition was fair and objective: Boeing won by offering a more fuel-efficient tanker at a more reasonable price."

During today's press conference, Crosby sent one last barb at Boeing, saying his company stands ready to supply some of its tankers should Boeing "falter" in its efforts to build a new airborne tanker.

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