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If Congress overturns a controversial $40 billion tanker refueling contract, the ripple effects for the federal acquisition community could be widespread, procurement specialists say.

Since the Air Force announced in February that it had chosen the Northrop Grumman-EADS team to build a fleet of midair refueling tankers, a growing chorus of legislators have vowed to scuttle the deal and ensure that the contract is awarded to Boeing Co., the losing firm.

House Defense Appropriations Subcommittee Chairman John Murtha, D-Pa., threatened during a hearing in early March to "stop the money" for the contract. Rep. Norman Dicks, a Democrat from Washington whose district would see an influx of jobs if Boeing won the contract, argued that "we're going to start this thing over."

Others have focused their resistance on EADS, the French-based parent company of Airbus. Rep. Todd Tiahrt, R-Kan., said "we should have an American tanker built by an American company with American workers," and Rep. Duncan Hunter, a Republican from California, argued that the decision would hurt "national security interests."

Last week, Boeing protested the decision, asking the Government Accountability Office to review the Air Force's decision, likely heading off any congressional intervention until the watchdog rules on the case.

If GAO upholds the decision, Congress has the power to cancel funding for the project or direct program funds to Boeing through an earmark. But such a move, contracting experts said, would be virtually unprecedented and could spark a wave of unintended consequences.

"This is something that sends a shot across the bow for any contracting officer involved in a high-stakes procurement," said Larry Allen, president of the Coalition for Government Procurement, a contracting trade group that counts Northrop among its members.

If Congress were to reverse the decision, the door for increased legislative interference could swing open, Allen said. He imagines a scenario in which members could then dictate which veteran-owned business has the best crop of former soldiers on their payroll and therefore is best qualified to win a contract.

European governments and other global trade partners could be less willing to buy products from American contractors if they feel discriminated against, Allen said.

"There are rules and regulations and contracting officers should follow them, and Congress should allow them to follow them," Allen said. "Contracting is not glamorous. And, when you don't pay attention day in and day out to contracting until something like this comes across your desk, then you end up with 535 experts."

Congress has been careful not to criticize the Air Force's contracting staff, except for a few specific complaints -- Dicks, for example, said the service changed its criteria during the selection process. Lawmakers accepted that the service was hampered by prohibitive acquisition restrictions. The Federal Acquisition Regulation prohibits the government from considering job growth or a reliance on foreign subsidiaries during their evaluation.

"I look to the legislative branch to write the laws of this country, and I am sworn to enforce the laws," said Sue Payton, the Air Force's assistant secretary for acquisition at the Defense Appropriations Subcommittee hearing.

But, those familiar with the FAR's complex guidelines said Congress would be wise to leave contracting decisions to the experts.

"The government has able and well-skilled people whose goal it is to make the best decisions possible based on best value," said Allan Burman, president of Jefferson Solutions, a Washington consulting firm. "This would add a whole other element to government policy after the fact. There are risks associated with proceeding down this path."

Burman fears that the contracting workforce -- already depleted and juggling a growing number of projects -- could begin to worry about the political repercussions of their decisions.

"In the past, Congress has been loath to get involved in contractor decisions," said Burman, who served as the administrator of federal procurement policy for the Office of Management and Budget during the Clinton administration. "But, this would add a level of uncertainty with how agencies are making these decisions; uncertainty that does not currently exist."

Neither Allen nor Burman could recall Congress ever overturning a contracting decision and awarding the deal to the losing firm.

OMB officials would not comment on the prospect of congressional intervention, stating through a spokeswoman that GAO "is well-suited to examine thoroughly the Air Force's decision."

Not all contracting experts, however, believe the dispute will have such far-reaching implications or that Congress should stay out of the process.

Frank Spampinato, chief acquisition officer for the Energy Department, said most contracting officers are exceedingly professional and recognize that their decisions must be based only on criteria listed in the RFP, without accounting for the type of intangibles Congress is permitted to consider.

"I would, and I hope most others would, see this as an isolated incident," he said. "Normally, I would say Congress should never interfere with a contract award. Where do you think all the rules and regs that are currently on the books have come from anyway? Congress. So to say, 'follow our rules' and then say, 'unless,' is just ridiculous, in most circumstances."

But, Spampinato views the tanker contract as an extraordinary situation in which EADS received an unfair advantage because it receives foreign subsidiaries and tax breaks, not afforded to Boeing. He said Congress should intervene to correct an inequity built into the system.

"I don't believe that this is something that should concern the contracting community; I see it as a godsend in a sense," Spampinato said. "We've all known for a long time now that foreign companies and workers and domestic companies and workers don't compete on a level playing field. And this drove that point home."

COMMENTS

• First....lets be honest. If we select Airbus and I mean Airbus (NOT Northrup) we will be using US tax payers money to buy them. Boeing would more than likely have to layoff employees who will no longer be paying taxes that would ultimately have been used to buy the Tanker. Instead the rest of us will be paying subsistence to the layed off Boeing workers (who would be WORKING AND PAYING TAXES to buy the tanker if Boeing had won it).......but no, we will be paying to subsidize the numerous European economies while our defense base shrinks.... Get a clue USAF joe Posted July 16, 2008 1:44 PM
• The USAF followed its “Bigger is Better” philosophy with the selection of the EADS/NG A330 for the KC-45A tanker. The US GAO has upheld two protests of the previous USAF CSAR-X contract (to Boeing) on the grounds that the USAF changed/modified certain “Key Performance Parameters.” It seems that the USAF not only changed/modified its Key Performance Parameters (again) from its original request, but altered the Boeing bid by adding $5 Billion to the price and adjusted the KC767 delivery timeline to favor the A300. The USAF decided that Boeing with its 767 production line running at 25% capacity could "only deliver 19 tanker by 2013", while NG/EADS could deliver 49 from a factory in Alabama that has not been built. Boeing has delivered 35-40 767 a year over the last 25 years. The GAO should uphold the Boeing protest. In 2002, the USAF decided against the A330 listing 4 reasons for selecting the B767 over the A330. 1. The KC-330 increase in size does not bring with it a commensurate increase in available air refueling offload. 2. The KC-330 presents a higher risk technical approach and less preferred financial arrangement. 3. The size difference of the KC-330 results in an 81% larger ground footprint (48,600 sq ft) compared to the KC-135 it would replace, whereas the B767 is only 29% larger (33,300 sq ft). and 4. The KC-330 requires greater infrastructure investment and dramatically limits the aircraft’s ability to operate effectively in worldwide deployment. None of these 4 items have changed since 2002. Additionally, the A330 burns 20-25% more fuel per hour than the B767 according to the airlines who fly both types. That's about 400 gallons per hour, at just $3.00 per gallon, that's an extra $1200 in fuel cost for every hour flown. The USAF tanker fleet of 500+ KC-135s fly over 300,000 hours every year ($1200 X 300,000 hours = $360 million). While Boeing finds itself in an uphill fight to overturn the tanker contract that is nothing new for Boeing. And Bob, who posted on 18 Mar. Airlines have bought over 950 767 and still fly over 800, but have bought only 526 A330. Boeing is closing the 767 line because it is being replaced by the 787 on the commercial aircraft sales market and airlines have ordered over 900 787. Ivan Rasmussen Posted March 20, 2008 3:52 PM
• The headline concerns me. I don't consider it interference when our elected officials perform their oversight responsibility with multi-billion contracts concerning defense of this great democracy as well as one of our last remaining stable manufacturing industries. Should we continue to know how to engineer and build things or should we fold our tent and turn all those endeavors over to Europeans and Asians? Congress, do your job! Rick Rogers Posted March 20, 2008 9:18 AM