By Roxana Tiron - 07/10/10 01:23 PM EDT
Boeing Co. on Friday delivered its bid to build the Air Force’s new fleet of refueling tanker aircraft and touted its offer as “the lowest cost to the taxpayer.”
Boeing is competing against EADS, the parent company of Airbus, for what is likely to be the largest Pentagon contract awarded in the next several years. EADS delivered its bid Thursday, with company officials expressing confidence that their company can win the $35 billion contract.
Boeing will rely on its congressional backers to try and influence the Pentagon’s selection process. Lawmakers favorable to Boeing are attempting to move legislation as part of the pending defense bills that would force the Pentagon to report the effect government subsidies have on the tanker competition.
The World Trade Organization (WTO) ruled last week that European governments have illegally subsidized the launch of new Airbus planes. Boeing and its supporters argue the subsidies give EADS an unfair advantage by allowing it to offer a lower price than Boeing.
Pentagon officials have repeatedly said they will not factor the WTO ruling into its decision on the tanker contract.
EADS is trusting that Pentagon officials will stick with prearranged bidding rules that explicitly exclude the WTO ruling from consideration. Ralph Crosby, chairman of EADS North America, said on Thursday that he believed the competition will be evaluated in an “equitable manner” if the Air Force and the Pentagon stick to the outlined steps.
“We are helping advance the administration’s policy stated in the RFP [request for proposals], which says that [the WTO case] will not be a factor in the evaluations,” said Sean O’Keefe, CEO of EADS North America.
O’Keefe added that Pentagon officials, including Defense Secretary Robert Gates, clearly articulated the policy.
“I do not know what more we can add to it,” he said.
EADS officials this week latched on to the oil spill in the Gulf to make the case for their tanker bid. The company plans to assemble the aircraft in Mobile, Ala., and is moving all its tanker management team there. Some Alabama politicians — including Gov. Bob Riley (R) — plan to attend an EADS event in Mobile Monday to show support for the company.
Crosby said that new business in Mobile would be beneficial for a Gulf Coast that has taken an economic hit from the BP oil spill.
“Having this kind of economic magnet seems to me, in political and economic terms, to take on much greater proportion,” Crosby said.
If EADS wins the contract, about 48,000 workers across the U.S. will build the tanker using more than 200 suppliers, the company said. EADS has promised to also build the commercial freighter version of the Airbus 330-200 ¬— upon which the tanker is based — in Mobile if its bid is accepted.
Boeing has significant political support on Capitol Hill for its bid. Washington State lawmakers rallied with workers at Boeing’s Everett plant in support of the company’s bid on Friday. Some of the company’s most dogged supporters were on hand: Sen. Patty Murray (D), a defense appropriator, Rep. Norm Dicks (D), the House’s top defense appropriator, and Reps. Rick Larsen (D), Jim McDermott (D) and Jay Inslee (D).
“On a level playing field, no one — and I mean no one — is going to beat you out for this contract,” Murray said at the rally. “But of course, the key to making sure you get to deliver for our military — is making sure you get a fair shot. The illegal subsidies Airbus receives have hurt workers in this room — they need to end — and I won’t stop fighting to ensure they are considered in this contract.”
Boeing contends that the company and its 800 suppliers would support about 50,000 jobs in the U.S. Boeing’s tanker model is based on its 767 airplane.
Ukrainian company Antonov has also made a long-shot bid for the tanker contract. The company partnered with California-based U.S. Aerospace to make the pitch. Neither company, however, participated in several steps that are part of the official bidding process.