GAO: Air Force made ‘significant errors’ in tanker contract decision

As a result of GAO’s findings, the agency called on the Air Force to reopen the bid process.

“Our review of the record led us to conclude that the Air Force had made a number of significant errors that could have affected the outcome of what was a close competition between Boeing and Northrop Grumman,” said Michael Golden, GAO’s managing associate general counsel for procurement law. “We therefore sustained Boeing’s protest.”

The Defense Department on Feb. 29 announced that the Northrop Grumman-EADS team had been chosen over Boeing to build up to 179 new KC-45A tankers. The tankers are to replace hundreds of aging KC-135 Stratotanker aircraft that were introduced in the late 1950s.

Boeing in March filed a protest challenging the Air Force’s technical and cost evaluations, conduct of discussions and source-selection decision. Specifically, Boeing 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.

While GAO sustained Boeing’s protest, Golden noted that the agency “also denied a number of Boeing’s challenges to the award to Northrop Grumman, because we found that the record did not provide us with a basis to conclude that the agency had violated the legal requirements with respect to those challenges.”

Even so, the agency called on the Air Force to “reopen discussions with the offerors, obtain revised proposals, reevaluate the revised proposals and make a new source-selection decision consistent with the GAO’s decision.” By law, the Air Force has 60 days to inform GAO of the actions it will take in response to GAO’s recommendations.

Not surprisingly, a Boeing spokesman lauded GAO’s decision.

“We appreciate the professionalism and diligence the GAO showed in its review of the KC-X acquisition process,” Marc McGraw, vice president, tanker programs, said in a news release. “We look forward to working with the Air Force on next steps in this critical procurement for our war fighters.”