Key Senate appropriator weighs two tanker suppliers

Senate Appropriations Committee Chairman Daniel Inouye, D-Hawaii, signaled Tuesday that he is giving serious consideration to a proposal that would split the lucrative contract to build the Air Force's next fleet of aerial refueling tankers between the two rivals vying for the work.

Inouye, who also chairs the Defense Appropriations Subcommittee, told reporters that he plans to hold subcommittee hearings on the proposal, which has been publicly pushed by key House Democrats but soundly rejected by Defense Secretary Robert Gates.

Northrop Grumman Corp. and EADS, the European consortium behind Airbus, won the $35 billion deal last year to build 179 tankers for the Air Force. But the Government Accountability Office upheld a protest filed by the Boeing Co., the losing bidder, and the Pentagon subsequently canceled the contract.

Pentagon officials have said they expect to restart competition for the procurement program this year, in the hopes of awarding a contract to one of the firms next year.

But House Defense Appropriations Subcommittee Chairman John Murtha, D-Pa., and House Armed Services Air and Land Forces Subcommittee Chairman Neil Abercrombie, D-Hawaii, have raised concerns that any new contract would result in another protest and more delays. The Air Force now flies Eisenhower-era KC-135s made by Boeing.

Abercrombie and Murtha have argued that splitting the contract would quell political and industry opposition on the hotly contested program. Under their plan, the contractor with the best proposal would receive more orders for planes.

Inouye said he has not yet made up his mind on the contract, but suggested he would be open to the idea if it is the fastest way to buy the planes.

Gates has repeatedly opposed the idea, arguing that the two-plane approach would add $7 billion to the program's development costs over the next five years.

"If you go with a split buy and, in effect, guarantee everybody what they want, or guarantee everybody a piece of the action, any leverage that we might have in terms of cost control disappears," Gates said at the Naval War College in Newport, R.I., last week.

Murtha has said he may try to insert language in the upcoming fiscal 2009 supplemental spending bill that would require the Air Force to divide the contract between the two teams. House appropriators are expected to mark up the $83.4 billion spending bill, which includes $75.8 billion for the military, next week.

Senate appropriators also plan to mark up the supplemental by next week, said Inouye, who added that he has not had any discussions about leveraging the spending bill to require the Air Force to split the tanker contract.

Maybe there was some prejudice involved after the 767 tanker lease scam Boeing was involved in.

Perhaps...but they were punished already. People went to jail.

Meanwhile, by throwing the contract to EADs, they reward its far, far vaster corruption...

In an effort to get answers from the Military, Congressman Todd Tiahrt has sent a letter to Secretary Winne. He asks some serious questions. However, no answers are yet forthcoming. It is a sad state of affairs when things like this continue (copy attached):

The Honorable Michael W. Wynne
Secretary of the Air Force
1670 Air Force Pentagon
Washington, DC 20330-1670
Dear Mr. Secretary,
It has come to my attention that the primary supplier of the Air Force’s $35 billion KC-X Tanker competition, European Aeronautic Defence and Space Company (EADS), has engaged in many serious, illegal activities. These proven illegal activities and other serious allegations bring into question whether EADS is an appropriate supplier to the United States Air Force.
A recent New York Times article reports that Autorité des Marchés Financiers, the French Financial Market Regulator, filed a formal complaint and requested a criminal investigation of EADS and more than a dozen current and former executives. This action is based on insider trader violations.
The April 2007 Center for Security Policy Report “EADS is Welcome to Compete for US Defense Contracts-But First it Must Clean Up Its Act” highlights several serious questions for defense policymakers regarding EADS suitability for contract award. I have attached this report and the New York Times article for your review.
In addition to these open source documents, the Department of Defense has been briefed by other elements of the United States Government on other EADS violations. Unfortunately, the Air Force has turned a blind eye to very obvious and serious illegal activities of this major contractor.
Although the evidence of EADS’ corruption is overwhelming, the Department of Defense and the Air Force waives the Foreign Corrupt Practices Act and Cost Accounting Standards for foreign competitors. The American public may never know the true extent of illegal activities that the chosen KC-X Tanker manufacturer has committed. This represents a serious concern to our national security.
Mr. Secretary, please detail:

1) Why are foreign corporations, such as EADS, exempt from Foreign Corrupt Practices Act and Cost Accounting Standards when bidding for United States Air Force contracts, while domestic suppliers are not exempt?
2) Why is every defense supplier, both foreign and domestic, not held to the same standards?
3) Why were EADS’ illegal activities not considered as part of the KC-X tanker competition?
I look forward to your prompt reply.
Sincerely,
Todd Tiahrt
Member of Congress

EADS pose security problem to US , says US think tank
New Paper Highlights Problems With European Defense Company EADS; Says U.S. Should Be Careful Before Engaging in Partnership EADS Union’s anti-American propaganda. (PRNewsFoto/Center for Security Policy)
WASHINGTON, DC UNITED STATES 04/26/2007
WASHINGTON, April 26 — In a globalizing economy, the U.S. is increasingly reliant on foreign suppliers of military hardware. This relationship can be beneficial both to America and its foreign company partners, but only if the latter can be trusted to be honest vendors and fair competitors worthy of a stake in U.S. national security.
A new paper, published by the Center for Security Policy, argues that the recent large scale introduction of one these foreign firms — European defense conglomerate EADS — poses exactly this sort of serious security issue.
The paper is entitled “EADS is Welcome to Compete for U.S. Defense Contracts — But First It Must clean Up Its Act,” and it lays out several issues that ought to make Americans skeptical about whether EADS can function as an honest, scrupulous U.S. defense partner.
First, the European governments that own/sponsor the company have a history of spying on this country and stealing trade secrets from U.S. companies. This illicit behavior is even worse when coupled with EADS’ long history of bribery and corruption.
Second, the Russian government, which has displayed a growing hostility toward the U.S., is a part owner in EADS and is working to increase it share of the company’s stock to 20% or more. This would give Putin’s government the ability to manipulate the company, and perhaps even control it.
Third, EADS is one of Europe’s largest employers of militantly anti-U.S. labor unions .Many of these unions actively work against U.S. security and foreign policy while EADS continues to profess its desire to partner with the Pentagon.
Fourth, EADS actively seeks to circumvent counterproliferation regimes by selling military hardware, over Washington’s objections, to current and potential U.S. adversaries.
EADS has even been implicated as being "unwittingly" involved in an Iranian purchase of nuclear weapons technology. The bottom line, according to the paper, is that while EADS has the potential to be a valuable partner in U.S. defense and security, it will need to change its ways before American policy makers can trust it, and American tax papers can be assured they are getting the best product for the

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