Belfast Telegraph

Thursday 17 April 2014

US oversight office backs Boeing protest over $40bn deal

A US government oversight office plunged one of the defence industry's most lucrative and bitterly contested contracts into chaos yesterday when it backed a protest from Boeing against the US Air Force's decision to award a $40bn (£20.4bn) in-flight refuelling aircraft replacement programme to its European rival EADS.

In a 69-page decision published yesterday, the Government Accountability Office found "a number of significant errors" in how the tender process was conducted and called on the Air Force to "reopen discussions with the offerors, obtain revised proposals, re-evaluate the revised proposals, and make a new source selection decision".



The GAO's move will inspire howls in Paris, where EADS had celebrated in February what was seen as a major coup when the Air Force chose it and its American partner Northrop Grumman for the mammoth project.



Boeing protested, arguing that the process was conducted unfairly and that the Air Force's calculations about the relative cost of the proposals were incorrect.



The American aerospace giant mounted a massive campaign to overturn the decision, rallying key congressmen behind a patriotic message to "Buy American".



EADS had proposed to build the tankers – the initial order is for 80 with an option for up to a total of 179 – in Mobile, Alabama.



The Air Force has 60 days to respond to the Government Accountability Office, further delaying a programme already vastly behind schedule.



The Air Force had previously awarded the contract to Boeing, but that deal fell apart amid controversy over the rigging of the auction.