Defense Secretary Robert Gates' decision to reverse the award of a $35-billion contract to Northrop Grumman and its partners came after the Government Accountability Office uncovered problems with how the Air Force handled the deal.
The decision particularly affects MacDill Air Force Base in Tampa, which is home to 16 of the 179 refueling planes that are to be replaced. The KC-135 Stratotankers have flown missions around the world for decades.
The Air Force has told Rep. C.W. Bill Young that MacDill will eventually get up to 36 of the replacements.
Even though the replacement of the nation's 500 Stratotankers is the Air Force's top procurement goal, the project has been described as star-crossed with years of pitfalls, delays and bare-knuckled politics. Boeing won the first version of the contest, only to be stripped of its prize in 2004 amid an ethics scandal.
Young, R-Indian Shores, said he is frustrated by the time it is taking to get the job done. But he said Gates is right to redo the bids if the nonpartisan GAO says the Air Force made errors.
"This is disappointing, but this is a major contract," Young said. "It's not just a couple of airplanes. It's big. It needs to be done right. And we need the best product for the best price. So it's got to be a fair competition."
In what might be perceived as a slap at the Air Force, Gates said his office — and not the Air Force — will oversee the new bid competition between Northrop Grumman and Boeing.
Northrop, which won the second go-around on the contract in February, is working in partnership with European Aeronautic Defence and Space Co., the parent of Airbus.
Gates said he was setting a fast rebid process and wants a new decision by year's end, a timetable some analysts say will be daunting.
"I think they want to get this award wrapped up by the end of the Bush administration," Loren Thompson, a Washington military analyst, told the New York Times. "If they do so, it would set a new land speed record for Pentagon contracts."
Boeing and Northrop, which have waged a public-relations battle over which manufacturer would create more U.S. jobs, avoided any direct criticism of Gates.
"The United States Air Force has already picked the best tanker, and we are confident that it will do so again," Northrop Grumman said in a statement.
Boeing, which had protested the awarding of the contract to Northrop, said it still worried about potential bias in selection criteria.
Still, the company said in a release, "it's encouraging that the (Pentagon) intends to take steps to ensure a fair and open competition."
The GAO said Boeing might have won the bid had the Air Force not made several critical errors during its evaluations, including making mistakes in calculating the "life cycle costs" of the two planes and engaging in "misleading and unreasonable" discussions with Boeing.
Gates said the entire bid process won't be redone. Instead, just eight areas of concern outlined by the GAO will be addressed.
"The GAO report made it impossible for … Gates to make any other decision," Sen. Maria Cantwell, D-Washington, told the Associated Press.
The contract calls for 179 tankers to be built over 15 years at a cost of $35-billion. Beyond that, the Air Force may order hundreds more for up to $100-billion over a 25- to 30-year period.
Without question, the venerable KC-135 will be flown for many more years. The standing joke among pilots is that the last Stratotanker pilot hasn't yet been born.
During an eight-hour flight last week to refuel F-16s over several western states, Capt. Brian Fallis said over the din of the jet's four engines that the KC-135 has been a reliable warhorse.
It can carry about 31,000 gallons, refueling in minutes each of the jets that drift within 20 feet of the Stratotanker like hungry mosquitoes.
The average age of the KC-135's in service is more than 45 years, and the one flown during Fallis' flight was built in 1959.
"It's certainly not the sexiest thing around," Fallis said as seven F-16s jockeyed for position around the Boeing-made aircraft. "It gets the job done. But like anything mechanical, things wear out."