Analysis: Jobs hang in the balance as GAO looks at Air Force tanker contract

In February, the Air Force rejected a bid from Chicago-based Boeing and instead chose a team made up of EADS—the French-German parent company of Airbus—and Los Angeles-based Northrop Grumman to build the tankers.

Boeing filed a bid protest, in which it asserted that the Air Force switched airplane size requirements in the middle of the bidding competition. Initially, Boeing said, the service sought bids for a medium-sized tanker but later selected a much larger aircraft.

The Government Accountability Office (GAO) is investigating Boeing’s claims and could overturn the Air Force’s tanker contract award. GAO’s findings, which could force a new round of competition, will be released June 19.
  
What’s more, Washington observers wonder if the forced resignations of Air Force Secretary Michael Wynne and Chief of Staff Gen. T. Michael Moseley in early June could lead the new Air Force leadership to reconsider the tanker award. Both officials were asked to resign following the release of a report that spotlighted the Air Force’s problems handling nuclear weapons and other lapses.

Meanwhile, the Washington, D.C.-based Economic Policy Institute (EPI) has issued a new analysis of the tanker contract concluding that Boeing likely would create at least twice as many U.S. jobs as Northrop Grumman/EADS under the $35 billion contract. The difference in job creation amounts to 14,000 positions, according to EPI economist Robert Scott.

“U.S. job losses are likely to grow in the future if the contract is awarded to EADS, because it will give the company sizable cost advantages and a leg up in future competitions to supply tankers to the Air Force, other U.S. services and services in other countries around the world,” Scott asserted in the report.

The aforementioned Air Force resignations could have an impact, Scott told GovPro.com.

“I think the departure of those two individuals from the scene creates a space for perhaps a fresh look at the decision,” Scott said. 

Scott noted that the departed Wynne “was involved directly in the tanker decision.”

“He participated in the press briefing announcing the decision and made the announcement himself,” Scott said.

Union: Air Force ‘made a bad decision’

Susan Palmer, secretary-treasurer of the International Association of Machinists and Aerospace Workers, AFL-CIO District 751, told GovPro.com that the union “eagerly awaits” the GAO report on the Air Force tanker contract. Palmer’s group represents the 45,000 active and retired hourly workers at Boeing’s operations in Seattle.   

“The Air Force made a decision that is bad for our members. The Air Force made a decision that is bad for our economy,” Palmer said. “ … We’ve been building the planes that protect America, and we hope America will protect us as we will fight for this tanker.”

Palmer called the recent firings in the Air Force chain of command “a further sign that the Air Force … is unable to make decisions in the best interests of Americans.” 

“Air Force Secretary Michael Wynne was specifically brought in to correct the agency’s procurement process,” Palmer asserted. “Instead, the Air Force has been subject to investigations and fines for procurement problems, not including the most recent tanker award.”