Update, Aug. 6: Here is a Pentagon spokesman reacting to the US Aerospace protest over being rejected for its KC-X bid because it missed the filing deadline by five minutes, as reported by The Dayton Business Journal:
In a press briefing Thursday, Pentagon Press Secretary Geoff Morrell said the notion that any U.S. Military personnel deliberately interfered with the company’s attempt to deliver a bid is “absolutely absurd.”
“Listen, the other two companies that bid on this went to great measures to ensure that their bid arrived at the prescribed time … This is not a high school homework assignment, okay? These deadlines count and any professional contractor understands that,” Morrell said.
Update, August 4: This falls into the Holy Crap, What’s Next? department. The Seattle PI has the latest in the saga of the KC-X procurement. US Aerospace–the one with the Russian tanker proposal based on a plane that doesn’t exist–has filed a protest with the GAO over being denied the right to bid on the contest on a technicality.
In what has become perhaps the longest-running and certainly most tiresome story in Defense procurement, there is increasing speculation that the USAF contract award for the KC-X tanker might slip from November 12 into 2011.
Heidi Wood, the aerospace analyst for Morgan Stanley, wrote in her report on Boeing earnings last week that the award might slip. She did not elaborate in her note, but in an email to us expressed her skepticism of the November 12 date, given the history of this procurement.
The date is already a slip from the USAF’s promised August award. The complexities of the evaluation and the decision by the Air Force to grant EADS a 60 day extension to July 9 to submit a bid for the Airbus-based KC-45 contributed to the delay. The new, present date comes 10 days after the mid-term Congressional elections, in which Republicans are expected to significantly narrow the gap they have as minority party in the House and the Senate. Some even forecast the GOP might pick up enough seats to gain a majority in one of the chambers.
EADS is widely considered to be closer to Republicans and Boeing closer to Democrats, though there are politicians on both sides of the political parties supporting one or the other.
Whenever the USAF announces the award–whether it is November 12, as planned, or after the new year when the winners and losers shuffle about in Congress, the decision is bound to be controversial–and probably protested, pushing any final award into 2011 on this basis alone.
A closely divided Congress means more politicking will rule as opposed to letting the USAF do its job.
Surprisingly, one of Boeing’s most vociferous supporters from one of the nation’s most reliable Democratic states is in trouble for reelection. Sen. Patty Murray (D-WA) is only running neck-and-neck in early polling with Republican challenger Dino Rossi, who twice lost races for governor. The first was lost in three recounts by a mere 133 votes after leading in the first count. His second run, in 2008, was swamped by the Obama election tide.
In Rossi’s third run for statewide office in six years, the electorate seems tired of the sometimes shrill Murray, who is also facing the growing dissatisfaction with Obama. Murray has been a reliable supporter of Obama’s controversial policies. Rossi is no shoo-in, though. In the 2004 and 2008 gubernatorial elections, he was an early favorite only to fade in the home stretch.
But if he defeats Murray–still an uphill prospect, for the mud has only just begun to fly–EADS can’t count on this Republican vote. Anyone elected to Congress from Washington pretty much has to support Boeing, the state’s largest employer, and Rossi is already on record as supporting the KC-767 bid. But if he wins, Rossi will be a freshman senator with no power base in the Capitol; Murray is the #4 ranking Democrat in the Democratic majority, and holds a seat on the powerful Senate appropriations committee, where she can try to block any award to EADS at the committee level.
We won’t be surprised if whoever loses the tanker award protests. The Congressional supporters on both side will line up to further attempt to block any sole source contract, we think.
The entire process is likely to slip into 2012 whether or not Heidi Wood is right.