Air tanker procurement full of errors

18 June 2008

19 June 2008 | Paul Snell

The US Air Force made "significant errors" in its decision to award a $1.5 billion (£762 million) contract for refuelling planes.

The US Government Accountability Office (GAO) was asked to investigate the procurement process after an official complaint from Boeing, which lost out on the deal to build 179 planes to rival Northrop Grumman (news, 13 March 2008).

Michael Golden, GAO managing associate general counsel for procurement law, said Boeing's protest was sustained because "a number of significant errors" had been made that could have affected the outcome of a "close contest" between the two firms.

These errors included not evaluating the bids in line with the criteria identified in the tender and the Air Force conducting "misleading and unequal" discussions with Boeing - initially saying it had fully satisfied a key performance indicator, and then determining it had only partially met it, without informing Boeing of the change. The Air Force also made errors in evaluation that when corrected meant Boeing, not Grumman, had the lowest total lifecycle cost.

The GAO ordered the Air Force to re-open discussions with the bidders, obtain revised proposals, re-evaluate these proposals and then make a new decision on who should receive the contract.

The Air Force said in a statement it would review the decision and would then be in a position to "determine the best course of action". Grumman said it would also examine the verdict before commenting further. Boeing said it welcomed the GAO's judgement to support its protest.

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