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McCain, Riley seek "totally open"
process on Air Force tanker deal
By Garry Mitchell
Associated Press
October 26, 2006 (5 minutes ago)
MOBILE, Ala. - With a multibillion-dollar aircraft plant for Mobile at stake, Republican Gov. Bob Riley on Thursday enlisted U.S. Sen. John McCain's help in pushing for a "totally open" process in awarding contracts for a new fleet of Air Force refueling tankers.
Campaigning for Riley's re-election in the Nov. 7 general election, the Arizona Republican who is the incoming Senate Armed Services Committee chairman took issue with an Air Force decision that made the World Trade Organization a factor in awarding the Air Force contracts.
The Air Force has said that "treaty compliance" is among the criteria that interested companies must meet to build the estimated 100 planes.
The language refers to a dispute before the WTO in which congressional supporters of U.S.-based Boeing Co. have complained that European jet maker Airbus SAS receives subsidies from European governments, giving it an unfair advantage in seeking U.S. business. Airbus in turn has argued Boeing also receives government support.
McCain said he had "no idea" why the WTO language was included.
"We've had competition for many other defense systems that had to do with foreign manufacturers and they've never thrown in the WTO language," McCain told reporters at a Mobile news conference after speaking to a chamber of commerce event.
Chicago-based Boeing and EADS - the European Aeronautic Defence and Space Co. - the majority owner of jet-maker Airbus, are the leading contenders for the tanker contract, potentially worth more than $20 billion.
EADS has teamed with Los Angeles-based Northrop Grumman on its bid and plans to build the KC-330 plane in Mobile, if it wins the work. The Boeing planes would be built in Washington state.
McCain promised oversight hearings on the tanker deal, which has been on hold for more than two years after Boeing lost the contract amid an ethics scandal.
McCain said he's satisfied that Boeing "has made fundamental and significant changes in the way that they do business and I have confidence in them. But that doesn't mean we stop watching the process."
"I don't know how it's going to come out," said McCain. "We will be making sure this is in the best interest of all America."
As Armed Services Committee chairman, McCain has influence over Department of Defense contracts.
He said he didn't know when the tanker decision will be made but it could be authorized next year. He said his primary objective is for an "open, fair and transparent procurement process."
Alabama's port city has offered a $110 million package of incentives - including $82 million in cash - for the tanker project with Northrop Grumman Corp. and EADS North America.
The package will finance an aircraft assembly center in Mobile, if the Northrop team can win an Air Force competition against Boeing Co.
Riley, a former congressman, said he only wants "what's fair for the military." He questioned the fairness of the WTO factor with only two groups competing for the contract.
"If you take one out because of the WTO language, then essentially you've sole-sourced. I just don't think that's right. This would be the first time they've ever put WTO language in one of these and it might be the last," Riley said.
Riley said he hopes the tanker debate will continue.
"The only thing we ask is a level playing field," said Riley, who faces Democratic Lt. Gov. Lucy Baxley in the Nov. 7 election.
