As Boeing and congressional supporters are challenging the Air Force over its new refueling tanker contract award, service officials are also fielding gripes about Boeing. It’s Round 2 of protests with the Government Accountability Office (GAO) over a contract to maintain older tankers.

During the past year, various companies have protested every major multibillion-dollar contract awarded by the Air Force. The maintenance contract is a rare case in which more than one protest has been filed.  

The Birmingham-based company challenges that the Air Force did not follow GAO’s previous recommendations regarding the cost and risk of the contract and proceeded to award it to Boeing again.

This time around, Alabama Aircraft has another grievance: The Air Force changed the scope of the work required under the contract, but only discussed the new direction with Boeing and failed to inform Alabama Aircraft.

Company officials charge that the Air Force has been working with Boeing engineers behind the scenes to alter the 10-year contract, which would affect the actual bid price.

The Air Force did not respond to a request for comment by press time.

The stakes are high for Alabama Aircraft. The company says it stands to lose up to 900 jobs without the $1.2 billion contract and can be completely pushed out of the maintenance work for the workhorse tankers, which will fly for several more years until the Air Force is able to replace them with the new KC-45 tankers.

Alabama Aircraft has the backing of the Alabama delegation. Sens. Richard Shelby (R), a defense appropriator, and Jeff Sessions (R), a defense authorizer, have pressed the Air Force to follow due process.

The company is also informing the delegation about its protest so that lawmakers can ensure the Air Force does not move ahead with the contract before the GAO makes its second ruling. The GAO usually has 100 days to make a conclusion.

Alabama Aircraft has tried in recent months to go against Boeing’s lobbying might on Capitol Hill. In response, it hired Navigators LLC to lobby on its behalf, according to Senate records.

It also has employed King and Spalding. The lobbyist on that contract is Arch Galloway, Sessions’s former senior military policy adviser. According to records, the company paid $20,000 in lobbying fees for 2007.

“We are disappointed in the Air Force’s second new award to Boeing and we do not feel they complied with the GAO, and we think they should stay the award and wait until the GAO comes back,” said Alabama Aircraft CEO Ronald Aramini.

Boeing charged that the Air Force has fully complied with the GAO recommendation.

“It is now time to move on and serve the warfighter through this vital sustainment work to keep the KC-135 fleet flying and battle-ready,” said Boeing spokesman Forrest Gosset in a statement.

Boeing and Pemco, now Alabama Aircraft, have had a checkered past. Until 1998, Pemco performed the maintenance on the KC-135, and when the contract reopened for competition, the Air Force disqualified Pemco on a technical detail and awarded it to Boeing.

But that contract later became part of a Pentagon investigation into the dealings of Darleen Druyun, the same official who admitted in 2004 in court that she steered multibillion-dollar contracts to Boeing at the same time she was seeking employment with the company for herself and members of her family.

Druyun was the central figure in a corrupt deal between the Air Force and Boeing to lease new tankers. After Druyun and another Boeing official went to jail, the Air Force took steps to open up competition for the program and ultimately awarded the $40 billion contract to Northrop Grumman and Airbus parent company EADS on Feb. 29.

Boeing is now protesting the decision.

When Pemco filed its first protest with the GAO last year, it amended it to include allegations of pro-Boeing bias by Charles Riechers, the Air Force’s No. 2 arms buyer. Riechers was found dead on Oct. 14, an apparent suicide.
Riechers, who had Druyun’s old job, had been responsible for the choice of Boeing over Pemco, the GAO said. Pemco charged a possible conflict of interest because of ties among: Commonwealth Research, which briefly employed Riechers while he awaited White House approval for his new Air Force job; its corporate parent, Concurrent Technologies Corp; and Boeing.

GAO voiced no opinion on Pemco’s allegations.

In 2001, a couple years after Boeing was awarded the maintenance contract, the Chicago-based company was unable to perform satisfactorily on the contract. Pemco came in as a subcontractor in 2001 under the agreement that the work would be split 50-50.

But the Air Force canceled the Boeing contract in 2005 for poor conduct and agreed to a so-called bridge contract with Boeing and Pemco until it was able to select a new contractor under a renewed competition. That bridge contract has an option to go through the end of 2008, so work can be done on the planes despite the disputes.

Initially, Boeing and Pemco teamed up for the new competition, but when the Air Force made changes to its requests for proposal, Boeing decided to go on its own and the two companies ended up being rivals. Boeing underbid Pemco by $15 million in a last-minute submission.

More than 70 percent of Alabama Aircraft’s work relies on maintaining the KC-135. The company also does some work on the Air Force’s KC-10 tankers, C-130 cargo aircraft and the Navy’s P-3 Orion planes.

Since it lost the contract to Boeing in September, the company’s employment fell by 400 people.