Tanker, Influence and Questions

Here's another thought or two about the $40 billion Air Force fuel tanker contract and some related matters.

Please, gentle readers, be patient. Goverment Inc. is feeling a bit slow and doesn't understand everything that's happening. It feels like some people don't want us to understand who is promoting what for whom and how much. Come to think of it, it feels like some Washington-style business is happenng. This may take a little ink.

First we want to lay out a few details related to a longish earlier posting about the fascinating role being played by a non-profit advocacy group called Citizens Against Government Waste. We also want to ask a few questions.

Big Question No. 1 concerns the ties between CAGW, as the group calls itself, and Northrop Grumman and European Aeronautic Defence and Space, the partners who defeated Boeing to win the contract.

Diligent readers will recall a slight discrepancy between what CAGW spokeswoman Leslie Paige told Government Inc. and what Northrop spokesman Randy Belote told us.

Paige said her group was working independently of Northrop. "We are not promoting anyone's interests," she said.

Belote said CAGW had approached Northrop, offering to help spread word of the merits of the contract award in order to protect the "integrity" of the procurement process.

Yesterday a reader forwarded Government Inc. an email sent out by a group called America's New Tanker. In strong language, the email letter implores recipients to speak out on behalf of this urgent issue, to call their lawmakers and prevent anyone from trying to reverse the contract awarded to Northrop.

"The United States Air Force is Under Attack!" the missive is headlined. "Our military men and women need your help!"

Should we be surprised that America's New Tanker is a Northrop group, according to Belote? Or that the links in the document take readers to a CAGW Web page?

But hold on, that would mean that Northrop and CAGW were working together to promote Northrop's interests, right?

Here's another excerpt from the email:

"Our friends at Citizens Against Government Waste have been actively engaged for six years in making sure that this tanker project is awarded through a fair and open competition. They are convinced the process was just that -- open and fair, resulting in the best company winning the contract."

There's more on our mind. Today, the folks at CAGW are planning to hold a meeting. It's the meeting where they're going to discuss forming a coalition of other good government and taxpayer groups to keep the procurement process honest. (In the earlier Government Inc. posting the CAGW said there wasn't really a coalition, even though their own email said there was going to be a coalition, including a Web site etc. etc. )

Anyway, here's today's Big Question 2: Who is Bill Lauderback and who is he working for?

In an earlier email sent out by CAGW announcing the meeting, Lauderback is cited as the person who will "will be in attendance to explain the coalition and answer questions."

Lauderback is a political and lobbying veteran who used to be "executive vice president of the American Conservative Union, a free market oriented grassroots lobbying organization."

That is according to his bio at his current job as senior advisor at Public Strategies, a communications and public relations firm that hires political, government and corporate talent to shape public opinion and "manage the public issues that effect the bottom line."

Yesterday, Lauderback did not return repeated phone calls to answer our question. And CAGW won't say whether he's working for them or whether they're paying his bills. Here's what spokeswoman Paige had to say in response to our query:

"We have a policy here at CAGW, just like lots of other organizations, not to discuss any contractual arrangements except when required to by law. Don't read this response as a denial or a confirmation of any arrangement with Bill Lauderback. That would be a mistake. We simply are not going to change that policy," she said.

"With regard to whom Bill Lauderback works for, you are free to contact him, obviously."

If Lauderback is working for CAGW, I wonder at the cost and the reasons. With all his experience and connections, he must charge a lot to provide his kind of advice. They're a non-profit group, right?

Big Question 3: If CAGW isn't paying Lauderback, who is and why?

This morning, we checked in again with Lauderback's office. He remained unavailable. But his secretary referred us to Randy Belote of Northrop, saying he would answer any questions. Here's what he said in an email:

"It is Northrop Grumman policy that we do not identify consultants that provide services to the corporation nor do we publicly talk about what our consultants do for the corporation."

By Robert O'Harrow |  March 28, 2008; 11:02 AM ET defense
Previous: Contractors, Contractors and More Contractors | Next: This Is No Joke

Comments

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Boeing when they were sole source cheated the taxpayers on a number of occasions. They finally had to compete and didn't have the opportunity to bribe the acquisition officer.

Had Boeing not cheated the taxpayers when they had the sole source on the tanker contract, the military would already have a contract.

The Chinese Company, Boeing has decided once again that the Air Force is stupid and trying to steal from the taxpayers once again.

While Boeing continues to outsource technology and jobs to China. Airbus is bring jobs to the US.

Posted by: John | March 28, 2008 1:28 PM

Boy Your Harsh;
Actually most of the work is being done in Japan
They have outsourced more than 50% of their commercial aircraft business. The only reason the 767 has 85% domestic content is because the line is shutting down due to lack of commercial orders. If Boeing had offered the 777 it would have had less domestic US content than the A330. A large portion of the high tech 787 is manufactured in Japan, including the wings! Exporting this cutting edge program is where the danger is. There is not very much high tech engineering work in building a 20 year old 767 design. Less than 10% of A330 Tanker work is French, the major portion of the foreign content is from the UK one of our best allies. All of the militarization work will be done in Northrop's new facility adjacent to the EADS assembly building. Northrop's engineering work will be done in Melbourne Florida. The CAGW stuff is interesting, but they have always been very critical of Northrop programs in the past, especially high dollar projects like the B-2.

Posted by: Bob | March 28, 2008 3:09 PM

The Boeing plane is the best deal for the taxpayers! By the time we foot the bill for the increased fuel cost for the Airbus plane for a huge amount of training missions, on top of the increased hangars and runways that will require taxpayer dollars the Airbus plane will be much more expensive! Do not tell me that the USAF needs our help. The pilots in the USAF want the Boeing plane. My husband was a tanker pilot in both gulf wars and he would prefer the mid-size plane to the larger plane any day!!!

Posted by: For America | March 28, 2008 5:10 PM

While your husband might have been a tanker pilot, I was one. I just wish we had a new tanker, it's a shame Boeing tried to cheat the taxpayers the first time. We'd have our tanker. Luckily I'm retired and don't have to fly this old buckets anymore.

Posted by: Henry | March 28, 2008 5:20 PM

I disagree that Boeing previously tried to cheat the taxpayers. The lease deal would have allowed for the USAF to have their planes in a timely manner. The problem was that 2 people broke the law, one of them being a member of the USAF and one of them a Boeing employee. Both individuals are to blame for the prior problem.

Posted by: For America | March 28, 2008 5:41 PM

America,

You are sort of correct, it was mmebers of Congress like Sen. Stevens and Sen. Murray who tried to ripoff the taxpayers. Also, why lease a plan when you can buy it?

Posted by: Jeremiah | March 28, 2008 6:25 PM

You can disagree with whether Boeing tried to cheat the taxpayers, but the facts are General Druyun and Micheal Sears of Boeing went to jail because they were cheating the taxpayers.

http://www.govexec.com/pdfs/druyunpostpleaadmission.pdf

http://www.dodig.mil/IGInformation/IGInformationReleases/SearsSent021805.pdf

If it wasn't for Boeing having secret meetings with the Air Force procurement officer, we would have had a new tanker before I retired.

Posted by: Henry | March 28, 2008 6:39 PM

Bob, you're probably right, I am being a little harsh. I'm just getting tired of so called American companies continuing to outsource jobs and still claim to be American. Is a Toyota built in Alabama less American than a Chevy built in Mexico? Boeing has outsourced big time to China, heck they brag about it on their own website.

http://www.boeing.com/companyoffices/aboutus/boechina.html

If Boeing wants to be an American company, why do they outsource our technology to China? I don't know about others, but I sure trust the French a lot more than I trust the Chinese.

If you really want to be an American company, quit outsourcing jobs to foreign countries, especially China.

At least this Tanker deal brings new manufacturing jobs to the United States.

Posted by: John | March 28, 2008 7:55 PM

Nice catch Mr. O'Harrow.
I would love to hear the rest of this story.


A few clarifications, if I may on comments by
our fellow posters John and Henry.....

China, Boeing and Airbus:

It is Airbus that will setup an A320 line in China soon. Boeing has partnered with Japan, not China, for the bulk of their overseas work.

The promise of jobs by Airbus is just that - A promise. Airbus/EADS has made this promise before and there were no jobs in the end.


On Trust:
Airbus makes decent and innovative aeroplanes now, but the company is lacking in the integrity department.
From the execs to the mechs, workers at several US airlines discovered years ago that Airbus has ethics issues.


"I trust the French more than I trust the Chinese"

Considering the position China holds in the world economy, could it also be said that
"I fear the French less than I fear the Chinese? "

Posted by: Leeland | March 29, 2008 5:15 AM

Leeland, read the link to the Boeing China website. It's from Boeing's own website. Boeing has been outsourcing to China much more than Japan. But they do outsource to both countries.

Posted by: John | March 30, 2008 3:28 PM

You know, this whole thing is a farce. Both prime contractors are U.S. corporations. Whether Boeing or Northrop was selected, major portions of both aircraft would have been manufactured overseas.

News Flash! There have been no aircraft wholly manufactured in the U.S. since they shut down the F-14/F-15/F-18 production lines. Even the 'stealth' (and I use that term loosely) aircraft have foreign manufactured components incorporated in their designs.

Wake up people! It was not in our national security interest to have allowed a single U.S. company to have shut out every other U.S. company when it comes to large aircraft manufacture. However, under the republican administrations of Reagen and Bush (G.H.W.) that is precisely what happened.

Where is McDonald Douglas? (Bought out by Boeing after they shut down their contract wins through shady dealings.) Where is Lockheed? (They don't even want contracts to maintain the aircraft that they produced.) Where is Rockwell. (The supersonic bomber program killed them, after they successfully cut out Boeing by ridiculous low-balling.)

Northrop Grumman is the only American manufacturer left with the ability to assemble a team that can compete with Boeing and it does not have the in-house ability to design and build competitive airframes anymore, thanks to Boeing's monopoly.

EADS is the subcontractor, not the lead. EADS will be assembling a highly competitive proven airframe in an American plant providing more American jobs than Boeing would to assemble the competing 767. The bottom line is that the Northrop-EADS deal is better for the Air Force (larger tanker capacity, fewer sorties flown), better for the U.S. taxpayer (more bang for the buck), and better for the U.S. economy (more American jobs generated in more locations) than the Boeing deal.

'Nough said! Let Boeng loose for a change and maybe they will perform better in the future.

Posted by: Olde Sarge | March 31, 2008 8:17 AM

In announcing that Northrop Grumman had won the bid, Air Force Assistant Secretary for Acquisition Sue Payton stated unequivocally that there was constant, open communication between her group and the two competitors. Each side had a chance, through multiple steps, to protest or question anything that they felt was going awry in the process. Boeing accepted the playing field as it was and remained silent. In fact, company officials repeatedly praised the openness of the process. It was only after they lost that they found it to be unfair.

Now Boeing is protesting, thereby delaying even further a long overdue upgrade in the nation's capacity to refuel its warplanes. In a fit of pique, Boeing has decided that petty political infighting takes precedence over the interests of our men and women in uniform.

Posted by: pas | March 31, 2008 9:20 AM

A story was told about President Lincoln who was approached by the Secretary of War who informed the President that the Union needed to build some new railroads to prosecute the war.

The Secretary allegedly told the President that the British made better and cheaper rails and reccommended the purchase of the rails from Britain.

President Lincoln was said to pause a moment to consider the matter and then said to the Secretary, " Mr. Secretary, if we buy the rails from Britain, we will have their rails and they will have our money. If we buy our own rails, we will have our rails and WE will have OUR MONEY.

NUFF SAID. Too bad the idiots in the current administration appear to be unacquainted with this story, which illustrates the truth of the matter, whether historicaly accurate or not.

Posted by: John Doe Voter | March 31, 2008 3:17 PM

The Air Force is charged with getting the best bang for its defense bucks, not propping up U.S. manufacturing. And although keeping jobs in their districts is an understandable concern for lawmakers, it shouldn't factor into the government's contracting process, especially in defense contracts.

Protecting jobs at all costs could result in higher costs for taxpayers, and possibly even lower quality products as manufacturers realize they don't have to compete with overseas companies. Boeing and EAD, parent company of Airbus, are two of the few companies in the world making large aircraft capable of being converted to tankers. Cutting out foreign competition would leave Boeing free to charge what it wanted. That's never a good deal for the taxpayer.

Posted by: Anonymous | April 1, 2008 4:33 PM

ALL THIS AFFAIR JUST DEMOSTRATE HOW CORRUPTED IS THE BUSH ADMINISTRATION IS!!ª BUT NOT ONLY CENTRAL GOV'T, BUT ALSO IT HAS SPREAD THE PLAGUE OR THE PEST TO THE REST OF THE ENTIRE OFFICES, INCLUDING ARMED FORCES!! IT'S A REAL SHAME FOR THE AMERICAN PEOPLE, AN OFFENSE TO THE INSTITUTIONS!!! IT PROVES THAT THIS GOV'T IS A PARADIGMATIC CASE OF THE GREATEST DECEIT OF THE LAST TIMES IN OUR HISTORY!!

Posted by: deximac | April 1, 2008 7:57 PM

Hey deximac...Get real.

The bureaucrats decided this one, not the political people. The bureaucrats stay in office, no matter who is in charge in the White House.

It's Congress that started the corruption and it's Members of Congress that are trying to reverse the result of an open bid procurment process. I guess you prefer the old way, no-bid leases by an earmark in a spending bill -- from the same clown that brought us the Bridge to Nowhere.

Posted by: SusieQ | April 2, 2008 1:43 PM

There should be a law passed in Congress that "if you are using taxpayers money" all jobs are to stay in the United States. How about thinking along those lines, or am I still in the dark about Congress?

Posted by: concerned | April 2, 2008 3:07 PM

QUOTE:
"The bureaucrats decided this one, not the political people. The bureaucrats stay in office, no matter who is in charge in the White House."

SusieQ:

The KC-X contract was awarded by a committee. There were no career Air Force officers in direct control of the award and the selection committee members were mostly all political appointees.

While both political parties are responsible for allowing the outsourcing of American jobs, it was a GOP led Congress that created and passed the FAR rule changes permitting the French to bid on a United States Air Force tanker in the first place.

The idea that multi-billion dollar contract decisions are non-partisan is a naive one.

And not to put too fine a point on it, but the only sizable no-bid contracts are the ones signed for and approved by the current administration and Congress - pre-2006.

Posted by: Jackson Piretto | April 2, 2008 3:52 PM

Boeing's problem is the fairness of the competition. The Request for Proposal(RFP) was for a mid-size tanker that can operate from smaller, less than perfect runways closer a military operation. Pay attention here: The KC-135 is currently the mid-size tanker and the KC-10 is currently the largest tanker in the Air Force inventory. The NG/Airbus plane is BIGGER than the KC-10. What is more, the Air Force didn't inform Boeing of any change in requirements but consistently made concessions to Airbus because they don't even have an airframe of the right size. It is like asking for a red sportscar but picking for the giant SUV when the bidders present their offering. There will be another contract at a later time to replace the KC-10... NG/AirBus should have presented their plane at that bid and it would have been fair.
If people are worried about this delaying a vital plane to our soldiers don't worry... Northrup Grumman doesn't even have the production plant built for the plane yet. They have to build the factory FIRST before they can even begin building the plane.
The first Air Force core value is "Integrity First" but this is the furthest thing from integrity in my opinion.

Posted by: Anonymous | April 2, 2008 6:51 PM

It was time for a change in the manufacture of a major airframe. The 767 is a medium size airframe with a smaller capacity of fuel. The A-330 (KC-45) will carry at least 40,000 lbs more of JP-x. Boeing had the same opportunity to field a higher capacity acft with a 777 but did not. When one looks at the long range planning, it might be that the AF was looking at the future area of action which probably will be the Pacific Rim. Therefore a longer range and a higher payload may have been the tipping point. Plus, the A330 beat out the 767 fair and square. Now we can get some competition back into the manufacturing process.

Posted by: Jas Pritchard | April 3, 2008 3:19 PM

""Boeing had the same opportunity to field a higher capacity acft with a 777 but did not. ""

The RFP as written was for a KC-135 replacement. The 777 is closer to the KC-10 and might be offered in the next phase tanker competition. (KC-Y or Z)


""Therefore a longer range and a higher payload may have been the tipping point. ""

The A330 increased payload and tankering abilities and its modest range increase is of little practical advantage when tasked with a typical Air Force mission.

Now factor in the latest revelations:
The KC767's higher survivability rating and the nearly five-to-one increase in mission capabilities the Boeing brings to our fighting men and women.


""Plus, the A330 beat out the 767 fair and square.""

As more and more facts become available on the decision process and scoring, the more it appears the Air Force had made a poor choice using a flawed process.

Good News America:
Uncovering flawed processes is one of the GAOs prime reasons for being.

""Now we can get some competition back into the manufacturing process""

We already have competition. Perhaps unfair competition according to the WTO agreement signed by the US and Europe.

Posted by: Jackson Piretto | April 4, 2008 4:07 AM

Whew! I (somehow) managed to read the long string of emotion wrapped up in "The Tanker Deal". It's all a bit staggering. Many many allegations, many opinions, many personal experiences...some facts, too.

Posted by: skiloypet | April 8, 2008 1:39 PM

Does anyone see the hand of John McCain in this award?
He cut Boeing out of the previous two tanker deals -- and he has a number of EADS/Airbus people on his campaign staff. What an odd coincidence -- it makes one wonder.

Posted by: CampaignWatcher | April 11, 2008 12:53 PM

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