Friday, August 07, 2009

DTN News: After Bold Rhetoric, House Leaves Tanker Decision To Pentagon Brass

DTN News: After Bold Rhetoric, House Leaves Tanker Decision To Pentagon Brass *Source: DTN News / Defense Media (NSI News Source Info) WASHINGTON - August 7, 2009: U.S. Rep. John Murtha spent months huffing and puffing about forcing the Pentagon to buy both planes expected to again vie for a multibillion-dollar aerial tanker contract. Ultimately, however, the House Appropriations defense subcommittee chair did not blow down the house, according to aerospace analysts. Photo: Boeing and a partnership between Northrop Grumman and EADS are vying for the KC-X contract. (BOEING) Murtha repeatedly told reporters in early 2009 that he saw splitting the KC-X contract between Boeing and its rival, a partnership between Northrop Grumman and EADS, as the lone way out of a years-long saga that has included faulty deals and lengthy protests. He even talked publicly about including in 2010 defense spending legislation additional tanker funds to put the Pentagon on a financial footing to begin developing both industry offerings. But when the House Appropriations Committee unveiled its version of the defense appropriations bill, it quickly became apparent to experts that Murtha's bold rhetoric was not reflected in the legislation, nor in the accompanying bill report language. Analyzing the panel's wording is crucial, according to several analysts, and that is just what Pentagon officials will do when a final spending bill is hammered out later this year. The report language is laden with words and phrases such as "option" and "the committee believes" and "one or more contracts." That is hardly a mandate to split the contract between. Language like that means something, analysts said. In this case, it means the panel is leaving it up to Defense Secretary Robert Gates and his subordinates how to proceed on the estimated 179-plane, $35 billion tanker replacement effort, they said. Open to Interpretation The committee could have used straightforward but clear language directing the Pentagon to buy both planes, and significantly increased the 2010 KC-X allocation to do so. What the lawmakers did was state their preference for a dual buy with a faster buy rate, giving themselves political cover should the program again go awry, analysts said. The lone usages of the word "direct" come in provisions mandating the Pentagon to provide a report to the congressional defense committees about its plans before releasing a final request for proposals, and another stipulating the department must award one contract or two. The latter leaves the final decision up to the defense secretary. The analysts acknowledged that some stakeholders will interpret the language how they want. David Berteau, a former Pentagon official and now an analyst at the Center for Strategic and International Studies, said, "You can interpret the language both ways." But because the lawmakers' language only "opens the door to a split buy" rather than "outright being directive," the House is proposing to leave the ultimate decision to Gates, he said. Richard Aboulafia of the Teal Group called the language "a rubber mallet, ... not a hammer." The House bill does direct the Pentagon information about how the Pentagon will evaluate all industry, and the process it will use to select a winner - or winners. But analysts said it is unclear whether a possible requirement to disclose information about those aspects of the program will force the Pentagon's hand one way or another. The House report endorses buying the new tankers faster than the 12 to 15 a year the Pentagon is planning. But the language does not direct the department to do so. "The committee believes that it is in the best interest of the taxpayer to pursue recapitalization at a rate of 36 aircraft per year vice 12 or 15 aircraft," according to the report. "This quantity will allow for recapitalization in one-third the time and thus allow for a rapid retirement of the current KC-135 aircraft." The appropriators could have set a faster buy rate into motion by substantially increasing 2010 funding for the KC-X program and stipulating how those funds could be spent. But the House bill only adds about $10 million to the Pentagon's $429.6 million request. The Senate Appropriations Committee will not being work on its version of the 2010 Pentagon spending bill until after Congress's August recess. Once the Senate passes its version of the bill, a conference committee will hammer out differences between the two. Aboulafia suggested one aspect of the House report could tip the scale toward splitting the contract. The final section of the KC-X section directs the Pentagon to notify Congress by Oct. 1 which possible procurement approach "represents the most cost-effective and expeditious tanker replacement strategy that best responds to U.S. national security requirements." "Given the speed described in this language," Aboulafia said, "a split buy would be the only way to go."

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