There are several types of federal procurements. Currently the two main types of procurements are: free and open competition and directed source. The directed source procurement is often incorporated into an appropriation bill, and is commonly referred to as an ear-mark. In an ear-mark appropriation, Congress directs a department or agency to ignore the prior Congressional legislation governing federal acquisitions and is directed to use a portion of the approved budget for the purchase for goods &/or services, or directs certain construction projects (and often specific contractor(s)) outside of the mandated budgeting and acquisition processes.

In the recent instance of the KC-45A procurement, the Air Force tankers were initially directed to be leased as a sole-source acquisition from the Boeing Company by a Pentagon official, who subsequently retired and was immediately hired as a senior Boeing corporate executive...before the ink had dried on the tanker lease. The scandal was compounded by the fact that the acquisition official had arranged for her daughter to also be hired by Boeing as a "personal favor."

It was the wide level of publicity generated by these ethical lapses at both the Pentagon and Boeing that made it politically untenable for the prior lease to go forward or for the tanker purchase to be ear-marked as a directed acquisition to the Boeing Company.

Accordingly, the Air Force issued a request for proposal under its normal acquisition processes for full and open competition. While the contract was Boeing’s to lose, the solicitation was open to all "qualified, responsive and responsible bidders...those able to demonstrate a capability to meets all of the defined product and delivery specifications.

A specific set of general acquisition requirements were published and potential bidders were all allowed to ask questions and receive clarification on any aspect of the procurement. Included in the request for proposal was a specific set of evaluation criteria along with the relative weighting of each requirement to be evaluated. Cost, while important, was only one of many factors to be considered.

The legacy companies of both Lockheed Martin and Northrop Grumman have been competing for the manufacture of fighter aircraft for the US government from the earliest days of military aviation to the present. During the last 50 years, the Boeing Company has had an ABSOLUTE lock on ALL tankers and cargo aircraft in the current US inventory.

The major reason for Boeing ALWAYS winning cargo and tanker programs has been...because no other American company could demonstrate relevant experience in the recent manufacture of cargo or tanker air-frames. A Boeing favorable catch-22 situation that led to complacent Boeing management.

This time, another US aircraft company, Northrop Grumman Corporation, teamed with Airbus as it’s air-frame subcontractor, to overcome the Boeing marketing argument on air-frame experience. The tanker proposal requires Airbus & Northrop to jointly build co-production facilities within the US. While not all of the aircraft will be built in the US, the vast majority of production sub-assemblies, the air-frame, and aircraft finaly assembly will all be built or performed domestically.

The "BUY AMERICAN" argument is actually a red-herring. Is a Toyota produced in Kentucky with US steel and assembled by US plant workers less of an American car than a Dodge, where everything from the engine to the rocker panels were imported from either Asia or Mexico, and the assembled is in Detroit? Congressmen in Illinois and the auto-worker’s unions say yes; auto-assemblers in Kentucky and the public appear to disagree.

Is an KC-45A assembled by US worker in Mobile, Alabama less American than a KC-767A (200ER) assembled by US workers in Wichita, Kansas? Apparently the Congressional delegations of Washington and Kansas and pro-Boeing lobbyists do.

Perhaps the difference in the definition is found in the fact that the Alabama facilities are non-union and Boeing’s Wichita, Kansas facility has long been a closed union shop?

But a loss of the tanker program is only the tip of the ice-berg from a Boeing marketing perspective. The real reason many Boeing "supporters" in Congress want to see this baby smothered in its crib is because once the Northrop/Airbus production facilities are constructed, there will be TWO viable US contractors able to bid on the next generation of US conventional bombers, cargo planes and tankers; one encumbered by union inefficiencies and another, not so constrained.

While the C-17 is replacing the 1960's designed C-141, the Vietnam era C-5, fielded in the late 1970s, will soon require a lower maintenance and more efficient replacement. So too, the venerable B-52 has patches on it’s patches and there is nothing in the current inventory with an equivalent payload and range. I’m sure a price competitive alternative supplier is the LAST thing the Boeing lobbyists want to see. If Boeing lobbyists can’t kill Northrop’s venture into the hither private sandbox of major air-frames, the specter and headache of running into full and open competition for each of the aircraft replacement, maintenance, and ground-support acquisitions looms VERY large. What is at stake for Boeing is significantly larger marketing issue than the tanker program.

But for the Boeing ethics and public-relations fiasco, there never would have been a tanker solicitation issued. The acquisition would have been simply, "business as usual," with a Pentagon or Congressional sole-source directive for the Air Force to lease or buy from Boeing whatever Boeing chose to sell. The tanker solicitation clearly demonstrates that the Air Force would have paid at LEAST an extra $6B for the honor of purchasing an out-dated 1970's aircraft design with an equally obsolete avionics package. Boeing presented an offer based upon the 767 design–because it didn’t think it would need to offer anything better to win the Air Force contract.

The selected Northrop Grumman offering is acknowledged as the best of modern tanker aircraft and being sold at a substantially lower price than the converted Boeing 767. Because it is based upon the latest commercial aircraft design, it has up to date Northrop avionics, Honeywell communications, a current production commercial & fuel-efficient GE engine, and a modern computer generated aerodynamic air-frame design. Because other western countries (including Australia and Canada) have also committed to purchase the Airbus A330-200 tanker variant, the projected life-cycle maintenance and ground support costs are being shared by a significantly larger base of buyers.

From all the hue and cry, there appears to be a clear lack of consistency when it comes to Congressmen renouncing the evil of ear-marks. Some have now qualified that all ear-marks are bad–unless they are supported by well-funded union lobbyists. Others appear to oppose ear-marks, right up until the time that such political posturing on ethics could impact aircraft construction in their congressional district.