The Air Force chose a replacement for its aging tanker fleet last week, but the uproar it provoked by choosing a partly foreign bidding team strikes me as deeply ironic.
Tanker jets refuel other planes in midair, allowing them to remain airborne longer. Two major defense contractors, Boeing (NYSE:BA) and the combined forces of Northrop Grumman (NYSE:NOC) and EADS North America, a subsidiary of EADS Group -- which also controls Boeing's archrival Airbus -- bid on the deal. Northrop and EADS won, raising the ire of Boeing union workers and some members of Congress, who would prefer that the military choose an all-American contractor.
Following the rules
Here's the irony. First, Boeing and the Air Force were caught several years ago in a scandal involving an inflated lease of tankers from the company to the Air Force. When that came to light, Congress and the public pressured the Air Force to hold a fair and open competition for replacing the tankers. As a result, the Air Force couldn't use factors such as job creation or the location of manufacturing in determining who gets the contract.
Second, the Buy America Act, cited by many of the deal's opponents, actually allows the deal. Companies such as EADS, located in certain countries such as France, qualify under a "public interest" exception. Sue Payton, the Air Force official who made the award, explained Wednesday in a hearing to Congress that many of the legislators currently crying foul voted to approve that exception.
Next time, try harder
Third, Boeing has a long history of providing tankers to the military. It "should" have gotten this deal. But according to Payton, Northrop Grumman "brought their A-game." Rep. John Murtha (D-Penn.), the chairman of the appropriations subcommittee investigating the deal, said that Boeing "did not sharpen their pencils." Apparently not. According to defense industry analyst Lauren Thompson, "There were five selection criteria. [Boeing] did not manage to beat the other team in even one of them."
Only U.S. goods are good enough?
And fourth, the deal's prompted much wailing and gnashing of teeth from those who claim that foreigners are not good enough to build military hardware used to protect the United States. Only American companies have that right.
Sorry, guys -- that's just not true. EADS, for instance, supplies the UH-72A Lakota helicopter, used by the Army for homeland security operations. In the past, the military has purchased bombs from France, helicopter equipment from Italy, and aircraft engines from Britain.
The un-American solution
The Air Force picked the best deal -- and then got shot down for following the rules set by the very people now attacking it. Boeing apparently couldn't be bothered to put forth its best effort during the bidding, but it's now likely to benefit from a political firestorm that's based on false assumptions.
The resulting uproar may prompt a change to the exceptions part of the Buy America Act. It could probably overturn the result of this particular deal. And it might lead to Boeing getting its way, not through a competitive bid process, but by either directly or indirectly twisting the arm of the U.S. government and its military.
That, my friends, is the least patriotic solution of all.
We want our troops to use the best equipment. If that means buying foreign goods, so be it. Using inferior equipment would be much worse for both our troops and the people they're protecting.
Of course, we also want a strong economy. That means Boeing and other companies like General Motors (NYSE:GM) and Ford (NYSE:F) should knuckle down and use American ingenuity and hard work to beat foreign competition on a level playing field.
Better luck next time, Boeing. Maybe you and other American companies will take this lesson to heart and bring your A-game in the future. That's the American thing to do, after all.
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