Obama says tanker bidding process to be free, fair

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President Barack Obama says bidding on a contract to build aerial refueling tankers will be free and fair. “What I said to President Sarkozy is that the process will be free and fair and that the trust is justified,” Obama said at a news conference with his French counterpart.

“Here the secretary of defence makes procurement decisions. The president does not meddle in these issues and that’s a long-standing policy,” Obama said. “So I maintain an arm’s length approach, but I have assurances from Secretary of Defense (Robert) Gates that in fact the rebidding process is going to be completely transparent, completely open, and a fair competition,” he said.

Obama lauded Gates for reforming other Pentagon programs that were never expected to succeed in Washington: “He’s somebody who’s willing to call it like it is and make difficult decisions, and he will do so in this situation as well.” Europe’s EADS and Northrop won the previous tanker contract from the U.S. Air Force in 2008, but Gates canceled that deal after government auditors faulted the Air Force’s procurement process and uphold a protest by Boeing.

Sarkozy said EADS would bid if the process is fair and said he trusted Obama’s assurances. “I said to him (Obama), I trust you; if you tell me that the tender will be fair and transparent, then EADS will bid and we trust you,” Sarkozy told a joint press conference with Obama. France holds a 15 percent stake in the French-German company, but has no say over its strategy.

French and German officials reacted angrily earlier this month when EADS’ former partner, Northrop Grumman, withdrew from the competition after concluding its terms favored the smaller 767 plane offered by Boeing. Pentagon officials then told EADS they would consider the company as a prime contractor if it wanted to bid on its own.

EADS requested several changes, including a 90-day extension to the May 10 bid deadline so it could examine classified material previously only seen by Northrop. That process began on Friday.

Earlier yesterday, U.S. Air Force Chief of Staff General Norton Schwartz said the Pentagon needs to know if EADS is serious about bidding to build 179 aerial refueling tankers before granting an extension to the May 10 deadline for bids. “They have to say they’re serious and then the department will decide how much time to allow,” Schwartz told Reuters after his remarks at an event hosted by Air Force Association.

Thomas Enders, head of EADS’ Airbus unit, told a German newspaper on Monday the company could decide within the next two to three weeks whether it will mount a solo bid. Schwartz said the requested deadline extension had not been decided and gave no timetable for a possible decision. He said talks with EADS were continuing. EADS is considering offering its A330-based tanker against the smaller 767-based tanker built by Boeing.

Guy Hicks, a spokesman for EADS’ North American unit, had no immediate comment on the Sarkozy-Obama news conference, but said earlier the company was still weighing its options. “Though there has been no decision by EADS to bid, we appreciate the Department of Defense’s expressed commitment to competition,” Hicks said. “We are continuing to evaluate our options. An extension of the RFP deadline is essential, but not the only factor in making our decision.”

Northrop announced earlier this month that it would not bid for the work this time around after concluding that revamped rules for the competition favored Boeing’s smaller tanker. Schwartz defended the revised acquisition plan as fairly executed and said he was personally “comfortable that the competition is fundamentally driven by sound and irreducible customer requirements in an equitable and open process.”

Pic: The Airbus A330 multi-role tanker