EADS: Mistaken data release won't scuttle tanker contest
Contractor is giving Pentagon benefit of the doubt that an advertent release of sensitive information to its rival won't disrupt competition.
The U.S. division of European aerospace giant EADS is giving the Pentagon the benefit of the doubt -- at least for now -- that the recent inadvertent release of sensitive information to its rival, Boeing, in the high-stakes Air Force tanker contest will not impede the contract, a senior executive said Monday.
During a lunch with reporters, EADS North America CEO Sean O'Keefe praised the Air Force's overall handling of the competition to build 179 aerial refueling aircraft in a procurement program worth about $40 billion.
The competition is the "most above-board, fair and open process I've ever had an affiliation with," said O'Keefe, who has been involved on the government side with many acquisition programs when he served as Navy secretary and NASA administrator.
But O'Keefe, who returned to EADS less than a month ago after surviving an August 9 plane crash in Alaska that killed that state's former Republican Sen. Ted Stevens and four others, also left the door open that the release of proprietary information to Boeing -- and some of Boeing's own information to EADS -- could lead to a protest of the tanker competition to the Government Accountability Office.
"You never rule out any action," he said.
During an hour-long discussion, O'Keefe addressed the airplane crash, saying it reminded him of how fragile life is. Wearing a neck brace and a new beard in lieu of his trademark thick mustache, O'Keefe reported losing 40 pounds since the crash, saying: "And I do not recommend it as a means to do that.
"You're listening to the luckiest person you've ever met," said O'Keefe, whose teenage son also survived the plane crash in a remote part of Alaska.
O'Keefe, a well-connected Washingtonian who has become the public face of EADS's bid for the tanker contract, also said it did not take him long to get back up to speed on the years-long tanker saga.
"It's just a continuing kind of challenge working through an enormous and very significant acquisition program," O'Keefe said.
Air Force spokesman Col. Les Kodlick said service officials are reviewing how a recent "clerical error" that distributed a "limited amount" of source-selection information to the two competitors occurred. They are also considering how to prevent something similar from happening in the future, he added.
The Air Force had originally planned to announce the contract winner November 12, but has been pushing the date back this year. Kodlick said the service now plans to announce the contract winner early next year, but would not provide a specific date.
But Kodlick emphasized that the delay in the contract award had nothing to do with the mistaken release of information. "We are confident enough in what's transpired and where we are to continue to move forward," he said.
The Air Force has given no reason for the delay in the much-anticipated contract, but O'Keefe said Monday that the service is moving forward cautiously and diligently.
"Each step along the way has been delayed a little bit in the last several months -- not because of foot dragging ... but more a case of really trying to follow the steps along the way," he said.
A Boeing spokesman would not comment on the delay in the contract award or the release of sensitive information. But Rep. Todd Tiahrt , R-Kan., one of the firm's biggest boosters on Capitol Hill, seized on the recent developments Monday, arguing that it amounts to another botched job in the effort to replace the Eisenhower-era tankers the Air Force now flies.
Boeing plans to build its tanker at its plant in Everett, Wash., with military modifications to be completed in Wichita, Kan. EADS plans to build its tanker at a facility it would build in Mobile, Ala.
"The additional delays combined with careless handling of sensitive data cannot be tolerated," Tiahrt said. "We have thousands of American workers standing by who are ready to build the next generation air refueling tankers, but the Air Force continues to act without a sense of urgency."
In the rush to acquire new planes in 2003, the Air Force tried to lease Boeing KC-767s before reviewing other options. The $23.5 billion deal collapsed under pressure from congressional critics, led by Senate Armed Services Committee ranking member John McCain , R-Ariz., who exposed Air Force corruption that landed two senior Boeing officials -- one of them a former Air Force acquisition chief -- in prison.
That scandal also forced the Pentagon to consider alternatives to the Boeing aircraft and open future tanker contracts to competition. As a result, the service opened a competition that ended with a contract award in 2008 to a team led by Northrop Grumman and EADS, which offered a modified Airbus A330 aircraft. But Boeing successfully protested the contract to GAO and the Pentagon canceled the deal.
O'Keefe said Monday he believes the Air Force is handling the latest competition "by the book." He added that EADS did not read the information on Boeing that the Air Force mistakenly sent over, and he said he's been told Boeing officials did the same.
The Air Force has assured EADS that neither firm has a "superior understanding" of the competition, said O'Keefe, who added that he is willing to "give them the benefit of the doubt at the moment."