Archive for Thursday, April 1, 2004

Boeing backers question legislation

April 1, 2004

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— The senators who helped push Boeing's controversial 767 aerial-tanker program through Congress last fall backed away from it Wednesday, saying serious problems with the program's costs and capabilities and how the contract was negotiated must be resolved.

"As we look at the facts, they are very serious," Senate Armed Services Committee Chairman John Warner, R-Va., said after a closed briefing on a report from the Pentagon's inspector general on the $23.5 billion agreement for the Air Force to acquire 100 refueling aircraft from Boeing.

The investigative report, expected to be released publicly next week, questions whether Boeing's aircraft meet the military's needs to refuel planes from all services branches, whether the deal Boeing and the Air Force negotiated is too expensive, and whether the Air Force and Boeing followed federal procurement rules.

Sen. John McCain, R-Ariz., said the report from Inspector General Joseph Schmitz showed "serious audit concerns that need to be resolved." McCain has always been the deal's biggest critic, but he signed on to a compromise proposal last fall.

McCain, Warner and Sen. Carl Levin, D-Mich., declined to say they would move to kill the contract because of the problems the inspector general identified. They said they'd wait for several investigations of the deal to conclude before making that decision.

"We do not have the facts before us to make that decision," Warner said. The Senate committee will discuss the investigations in early May, he said.

The noncommittal stance of the three senators who negotiated the compromise that kept the contract alive last fall further clouded its future.

In October, after a plan to lease the 100 tankers ran into trouble over its cost and the viability of leasing, the three senators crafted a plan to lease 20 planes and buy 80 to reduce the program's cost.

McCain said Wednesday that the tanker situation needed to be resolved but declined to give any timeline for a decision.

As the senators listened to the Schmitz briefing Wednesday, the Air Force and Boeing responded to highly critical reports about the tanker program. In a letter to Knight Ridder, Air Force spokesman Bill Bodie said a Knight Ridder article that said Boeing rewrote tanker requirements to its own specifications, an issue addressed in the inspector general's report, was untrue.

However, Schmitz has indicated that a criminal investigation is under way into whether Boeing violated defense contracting conflict-of-interest laws by rewriting the Operational Requirements Document that defined the requirements for the new tanker.

Bodie also said that, contrary to the article, the 767 tanker already could refuel tankers from all service branches.

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