Gates Cancels Air-Refueling Solicitation

By Jim Garamone
American Forces Press Service

Sept. 10, 2008 - Defense Secretary Robert M. Gates has cancelled the competition for the $35 billion Air Force tanker contract. Gates told the House Armed Services Committee today that he decided the contract cannot be awarded by January, and that rather than award a contract that will be contested, the better idea is to let the next administration make its decision.

"It has now become clear that the solicitation and award process cannot be accomplished by January," he said. "Thus, I believe that rather than hand the next administration an incomplete and possibly contested process, we should cleanly defer this procurement to the next team."

The Air Force had awarded the contract for what's known as the KC-X to the Northrop-Grumman/EADS/Airbus consortium, which prompted a protest from rival bidder Boeing. The General Accountability Office found irregularities in the awarding of the contract, and Gates determined to re-open the bidding process on July 9.

Gates told the representatives that the department has been trying for seven years to find the proper way to replace the current fleet of KC-135 tankers. Over that time, the process has become most complex and emotional, Gates said, partly because of Defense Department mistakes.

"It is my judgment that in the time remaining to us, we cannot complete a competition that will be viewed as fair and competitive in this highly-charged environment," the secretary said. "I believe the resulting cooling-off period will allow the next administration to view objectively the military requirements and craft a new acquisition strategy for the KC-X as it sees fit."

Gates said he's been assured that the current KC-135 fleet can be adequately maintained to satisfy Air Force missions for the near future, and sufficient funds will be recommended in the fiscal 2009 and follow-on budgets to maintain the KC-135 at high mission-capable rates.