WASHINGTON The Pentagon is in danger of missing a self-imposed deadline to award a politically charged $35 billion deal to Boeing or Northrop Grumman for Air Force refueling tankers ahead of the next administration. Boeing's recent request for more time leaves the Pentagon with even less room to breathe in replacing a fleet that dates back to the Eisenhower era.
"The government has put this re-competition on a very tight schedule," said Loren Thompson, a defense consultant for the Virginia-based Lexington Institute. "What you see here is the improbability of conducting a major competition in record time."
The Defense Department was expected to release its final request for bids as early as Tuesday. But its deadline has continued to slip further past the Aug. 15 target originally provided by the agency and now could be delayed until September.
The upcoming request should make clear whether Boeing Co. gets its wish for additional time to assemble a bid, after it threatened to leave the competition.
Pentagon spokesman Chris Isleib said Tuesday that negotiations were continuing on the tanker program, and a release of the final request for bids has yet to be scheduled.
Industry observers suggest any short-term delays will end up benefiting Boeing, offering the Chicago-based company an opportunity to garner further political support among lawmakers from Washington, Kansas, and other states that stand to gain jobs if it lands the award.
Boeing supporter Sen. Patty Murray, D-Wash., said she hopes "this delay means the Pentagon is taking its time to do the right thing" after making major changes to its draft request for proposals on the tanker program.
The aerospace manufacturer lost the deal in February to replace 179 aerial refueling tankers to Northrop Grumman Corp. and its partner Airbus parent European Aeronautic Defense and Space Co. Boeing filed its protest in March.
The competition was reopened after government auditors found "significant errors" in the Air Force's decision. The revamped competition overseen by Pentagon acquisition chief John Young will focus on eight areas where the GAO found problems.
The deal one of the largest in Pentagon history is the first of three contracts worth up to $100 billion to replace nearly 600 tankers over the next 30 years.
It's unclear if Boeing's request for additional time is the root cause of the latest slip, or if the absence of senior officials on leave, and other setbacks have equally contributed to delays, said Thompson, who advises Lockheed Martin Corp., General Dynamics Corp. and others.
"It's a series of small things that cumulatively add up," he said.
Boeing contends that during its discussions with the Pentagon it has only requested more time to assemble its bid based on the latest set of requirements, said Daniel Beck, a company spokesman. "It's not about which administration is in charge at this point," he added.
Northrop spokesman Randy Belote said Tuesday the Los Angeles-based company has repeatedly indicated that a delay in the program would only benefit Boeing, while raising costs for the taxpayer and prolonging delivery of a new tanker for the military.
Even with such setbacks, the Pentagon will try to stick as closely to their plan as possible, analysts said.
Defense consultant Jim McAleese of McLean, Va.-based McAleese & Associates said it's in the best interest of the Pentagon to maintain its schedule and release the final request for proposals sooner than later, perhaps providing the companies a more modest amount of time to respond.
Under the Pentagon's current plan, both Boeing and Northrop are expected to respond to the bids request by Oct. 1, with a final contract award by the end of the year. The government has repeatedly acknowledged its tight schedule on the tanker program, but has made clear that a final award would be based on key events completed, not a definite timetable.
"It's not a question of incremental schedule slips," said Richard Aboulafia, a defense analyst with the Teal Group Corp. in Fairfax, Va. It's "can you meet a very aggressive hard deadline during this administration?"
The Pentagon's final request for proposals which could be released as early as next week will shed light on whether Young can hit his target of awarding the deal this year.
Even if that happens, "the closer the administration gets to leaving, the less legitimacy it has to make a decision," said Thompson.