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<< Previous   of   Next >>   ADVERTISEMENT   CONTACT THE HERALD Mike Benbow, Business Editor benbow@heraldnet.com   Published: Saturday, June 28, 2008 Suit filed over Boeing Air Force contract for KC-135 maintenance Boeing's tanker maintenance deal is "significantly flawed," says Alabama Aircraft Industries. By Michelle Dunlop Herald Writer EVERETT -- The Air Force found itself in the middle of not one, but two messes involving tanker contracts this week when Alabama Aircraft Industries filed a lawsuit against it. "We believe that the Air Force's award of the KC-135 maintenance contract to Boeing is significantly flawed," said Ron Aramini, president of the company, in a statement. Already in a dispute over a deal for new refueling tankers, the Air Force also will have to contend with a lawsuit over its decision to award the Boeing Co. a $1.1 billion deal to maintain its existing fleet of KC-135 Stratotankers. Government regulators twice sided with Alabama Aircraft Industries in its protest of the contract but denied the Birmingham, Ala.-based company's third protest. The Air Force in mid-June gave Boeing the OK to begin work on the contract. Alabama Aircraft "intends to pursue its right to seek review by the Court with the hope and expectation that, following a full review, the Air Force's award will be overturned and a new competition ordered," Aramini said. Boeing similarly has sought to overturn the Air Force's decision to award a $35 billion contract to Northrop Grumman and EADS to replace those old KC-135 tankers. The lucrative deal is the first in a three-part, $100 billion tanker replacement program. Like Alabama Aircraft, Boeing protested the Northrop win to the Government Accountability Office. The GAO sustained Boeing's protest, saying had it not been for errors on the Air Force's part, Boeing had a "substantial chance" at winning the contract. The Air Force is reviewing the ruling. The auditors recommended the Air Force re-open the competition between Boeing and Northrop. But the GAO's decisions are not binding. That issue is at the heart of Alabama Aircraft's lawsuit. Alabama Aircraft alleges the Air Force "failed to take appropriate corrective action in response to the GAO's Dec. 27 and Feb. 1 decisions" for the KC-135 tanker maintenance contract. Alabama Aircraft's case indicates that Boeing's battle to overturn Northrop's win is far from over despite the GAO's recent ruling in Boeing's favor. Boeing would build new KC-767 tankers to replace the KC-135s here in Everett and complete finishing work in Kansas. Defense Secretary Robert Gates has said he will be involved in the Air Force's response to the GAO findings in dispute between Boeing and Northrop. Boeing's supporters in Congress on Thursday introduced legislation that would withhold defense funds unless the Air Force either hands the award to Boeing or rebids the $35 billion contract as the GAO suggested. That bill was blocked in the Senate on Friday by Sen. Jeff Sessions, a Republican from Alabama, where Northrop and EADS would build their KC-30 tanker. Fellow Alabama Republican Rep. Jo Bonner said that Boeing and its supporters were trying to force the Air Force into settling for the "second best" plane. "Boeing desperately needs this contract to keep the 767 production line open," Bonner said in a press statement. "Some call the 767 a dinosaur. In contrast, the A330, on which (Northrop and EADS' KC-30) is based, is still a bestseller in commercial markets worldwide." Bonner said that Boeing and its "foot soldiers" in Congress want a competition in which only Boeing can win. "The company's sense of entitlement and arrogance are breathtaking," Bonner said.

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