Boeing appeals award

The move could have been expected, given the uproar in Congress over the Air Force giving Northrop and 'dem ferners a $40 billion contract for aerial refueling tankers. "Our team has taken a very close look at the tanker decision and found serious flaws in the process that we believe warrant appeal," said Boeing CEO Jim McNerney. Boeing said it will file a formal protest asking the Government Accountability Office to review the award going to L.A.-based Northrop and the European Aeronautic Defence & Space Co. From the WSJ:

Citing its Friday debriefing, Boeing said it believes it fared well under the five main criteria the Air Force used to evaluate bids. For example, Boeing said it received a top rating for its aircraft's "mission capability," the No. 1 factor, and said it scored very similarly in other areas to the Northrop offering. The company said subjective assessments and changes to an important analytical model contributed to the loss. "We have serious concerns over inconsistency in requirements, cost factors and treatment of our commercial data," said Mark McGraw, the head of Boeing's tanker effort, in a statement. In particular, Boeing said the Air Force had sought detailed cost information Boeing couldn't provide, though it said it gave the military data that exceeded what a commercial customer might receive. Boeing said it couldn't provide the information on the basis the Air Force sought because its plane had already been designed.

As part of the current plan, Northrop will take an EADS Airbus A330, which is larger than a Boeing 767 jet, and convert it into a military-grade airplane capable of supplying 37,000 gallons of fuel in midair. Here's how the appeals process works:

Companies can file a protest with the GAO, Congress's investigative arm, which then takes up to 100 days to review the objections and issue a ruling on them. The GAO's findings can be followed by the government and have resulted in re-bids, as in the case of a more than $10 billion Air Force search and rescue helicopter contract that has been twice protested by Lockheed Martin Corp. and United Technologies Corp., parent of Sikorsky, after Boeing won it in November 2006. A winner is expected this fall.

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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
Mark Lacter, business writer and editor was 59
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