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Wynne: Boeing withheld tanker information

Boeing officials seemed to sense defeat early in the Air Force’s KC-X aerial tanker competition and began building a “Pearl Harbor file” they could later use to force the Pentagon to reopen the bidding, says Michael W. Wynne, former Air Force secretary.

“Here’s one of those cases where Boeing had probably assessed their prospects were dimming. I would say that they systematically began to build a case, and I’m not sure they shared everything they could have shared with the Air Force along the way,” said Wynne, fired last month by Defense Secretary Robert Gates. Boeing officials “were essentially building a ‘Pearl Harbor file’ that they could use later. That’s probably part of this.”

He sat down for an extended interview with Military Times editors and reporters Wednesday, just after Gates announced the Office of the Secretary of Defense — not the Air Force — would manage a new competition to replace the service’s aging KC-135 tanker fleet.

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Representatives Jo Bonner and Todd Tiahrt weigh in on the original tanker ruling.

As then-secretary, Wynne played a major role in the late February decision to select the A330, offered by Northrop Grumman and EADS, over the modified Boeing-made KC-767. That decision would have handed the trans-Atlantic team a 179-plane, $35 billion contract — until the Government Accountability Office upheld a Boeing protest in June.

To Wynne, it seemed Boeing was preparing a Plan B in case it lost the contract, in part by withholding information on some costs that caused the Air Force to make its own estimates.

“There’s a feeling in the Air Force that maybe we were as transparent as we could be, and maybe Boeing wasn’t as transparent as it could be,” Wynne said. “We do not feel they were as transparent as they could have been.”

At the time of this posting, a Boeing spokesman had not yet provided an official response to those charges.

Asked for a specific example, Wynne pointed to Boeing’s unwillingness to submit “commercial rates on their support organizations.”

“In those areas where we weren’t going to contract with the two companies, Boeing was less willing to give their information and effectively thought that they could probably more optimistically price in an area where they weren’t getting contracts,” Wynne said.

The former air service leader said he was surprised the auditors sided with Boeing on that point.

“I was surprised the GAO did not see that for what it was,” he said, “which is: bid high for the stuff that you’re going to contract for and bid low on the stuff that you’re not going to contract for.

Pressed to say whether Boeing’s alleged move was dishonest, Wynne said, “Anything that is used to acquire, that is legitimate in the eyes of the customer or the evaluator is legitimate. … I would say that it depends on how you characterize it. It was a good business idea that seems to have sustained the protest. No different than calling a steal in baseball when the pitcher doesn’t realize it.”

More on Wynne’s interview coming up at airforcetimes.com and in the July 14 print issue.