Merkley Hits Smith on Tanker Contract

US Senate candidate Jeff Merkley is criticizing Senator Gordon Smith over his role in the Department of Defense's recent decision to award a tanker contract to a European company over Boeing.

From PolitickerOR:

Rep. Jeff Merkley is going on the offensive against Sen. Gordon Smith, and what the Speaker regards as the Senator’s implicit part in the awarding of an Air Force tanker contract to the combined forces of Northrop Grumman and the European Aeronautic Defence and Space Co. (EADS) over Boeing, the heavy favorite to win the bid.

Over the past week, the Speaker—a former Presidential Fellow in the office of the Secretary of Defense—has been fingering Sen. Smith’s 2003 vote for Sen. John McCain’s amendment exempting the Department of Defense from the Buy American Act as further evidence of his claim that Smith has continually sided with special interests instead of creating and protecting jobs in Oregon. The Act sprang back into the public eye last month, when Boeing lost the $35 billion air tanker contact.

Merkley has offered his own plan on the issue:

Merkley, who has been working with Sen. Patty Murray (D-Washington), capped off his own earlier criticism of the contract with a plan intended to reverse the deal. He announced his plan today at the Boeing Manufacturing Facility in Portland, where he was joined by a leader of a union representing Oregon’s Boeing employees.

"American tax dollars should not be used to outsource American jobs and create family-wage jobs overseas," said Merkley. "This is a threat to our national security and it is one more sign that our country and our government in Washington D.C. have gotten severely off track. I am urging Congress to launch a full investigation, strengthen the Buy American Act to ensure that this never happens again, and end the unfair trade agreements that have sent 70,000 Oregon jobs overseas," Merkley said.

Merkley called on members of Congress to join Rep. John Murtha (D-Penn.), Chairman of the House Military Appropriation Committee, to block funding for the contract unless the Air Force, following a full congressional examination, can make a compelling case for the decision.

A report from Sen. Murray’s office indicates that had the contract been awarded to Boeing, it would have created 225 jobs in Oregon. Boeing planned to manufacture 85% of the tanker components in America, while Northrop claims they will manufacture 60% in the U.S.

Read the rest. Discuss.

  • (Show?)

    I have mixed views on this. On the one hand I agree with the gist of what Merkley is calling for here. But on the other hand I lay the blame for this tanker contract cluster-f squarely at the feet of Boeing. They had the previous contract won. It was a done deal and then went for pure greed and tried to scam the American taxpayers with a gamed contract to lease more tankers.

    To me this entire controversy smacks of the very long-standing massive corruption within the military/industrial complex in our nation.

    As usual, blue collar working stiffs bear the brunt of the mind-numbing greed in corporate America.

    I wish there was a way to both keep these jobs here in America and at the same time fully penalize the corporate fatcats who caused this problem in the first place.

  • Michael M. (unverified)

    How disappointing (though, frankly, not terribly surprising) to see Merkley appealing to jingoism.

  • Garlynn -- (unverified)

    I wonder where Merkley comes up with the number 70,000, related to Oregon jobs sent overseas? Seems awfully high. I wonder what he's including, exactly, and how he defines "sent overseas"?

  • (Show?)

    Like Michael M., I am disappointed with Merkley's position here. The global economy is much more interconnected than in the past. The US sells plenty of military technology to foreign nations. Do we want them to have retaliatory buy-at-home laws? Would that be good for our economy? And why should not the US shop for the best buying deals it can get anywhere in the world? If the French want to subsidize our tanker fleet - great!

  • verasoie (unverified)

    This is not a good issue for Merkley as the main reason why Boeing lost the contract was due to corruption and wastefulness, which aren't things you want to come out as appearing to support (even though that's not his point).

    I despise McCain on most issues, but I do admire how he nailed Boeing for its wastefulness and corruption in its dealings with the government, at least this once. He's way, way too compromised with supporting pork elsewhere (Iraq, anyone?) for that to be seen as a general trait, despite the media narrative, but this is not the issue to run with as Boeing screwed themselves with their corruption and frankly did not deserve this contract.

  • mlw (unverified)

    There's plenty to attack Smith about without attacking him over this. Some facts - 1. Congress prohibits the military services from considering the effects on the domestic economy when bidding these contracts. 2. EADS has a US partner on this bid. 3. Boeing committed fraud in the initial award of the tanker lease, and people went to jail over it. 4. Boeing essentially dared the AF to award the contract to the US/European partnership by submitting a substantially inferior product. 5. There's no national security impact here - we're talking converted airliners, not advanced fighter aircraft.

    The bottom line is that Boeing submitted a much inferior product and reaped the logical consequences. We should be making military contracting MORE competitive, not less. (No bid, cost plus contracts to Halliburton sound familiar?) This craven pandering doesn't have a sound basis.

  • Marvin McConoughey (unverified)

    Complaints against the judging rules should have been submitted earlier, by either party, if the rules truly were deemed unfair. To do so now, smacks of hypocrisy.

    I have personal past knowledge of the harm that can be done to military procurement by political interference. I hope that it does not happen here.

    Boeing wanted to use an older model airframe of less capacity as the basis for its proposal. Nothing wrong with that, but given the probable long production life of the chosen product, there is some merit to choosing a more modern design.

    Some critiques fault the Air Force's design stipulations. Fair enough, but these should have been made early, when criteria were still being developed.

    Complaints about job losses are not as relevant as the nation's interest in fielding the most mission-supportive tanker possible for a given cost. Both bidders planned to make extensive use of other-nation production.

    There is a risk of unintended consequences should Congress overturn the bid award. The U.S. has a large positive trade balance in jet aircraft. We will be hard pressed to maintain that positive balance were other nations to perceive that we only practice fair aerospace trade when it is to our benefit. Expect major "pay-back" if the tanker contract award is overturned.

  • (Show?)

    There's plenty of room for honest disagreement here without resorting to wildly inaccurate charges such as "jingoism." Protectionism would be a much more accurate description of Merkley's position here.

    Personally I don't have a big problem with protectionism. After NAFTA and CAFTA, I'm much more open to countervailing points of view on globalism than I used to be. I think a hell of a lot of working stiffs in America feel the exact same way.

    It's worth noting here that if this Airbus frame is so much better than the submitted Boeing frame then the Air Force should have no problem meeting the challenge of Rep. Murtha's insistance that they make a compelling case for why the Airbus frame is the way to go.

  • mlw (unverified)

    Well, because, frankly, that's not what Congress has said it wants. The rules say that DoD gives a briefback to the bidders regarding the reasons for the selection privately, so that the bidders can decide whether or not to protest. If Congress wants a public accounting (other than that already given), they should change the rules to make that the way it's done.

    Let's not kid ourselves here, folks. The FAR and DFARs blatantly favor the contractors, because that's exactly what Congress wanted and passed laws to ensure. Contractors have money to contribute to campaigns. Attempts to reform them to make the government actually get a fair deal are routinely rebuffed by Congress for exactly the same political reasons we see in this discussion.

  • Marvin McConoughey (unverified)

    Kevin says, in part, "if this Airbus frame is so much better..." The airframe quality difference in favor of Northrup is marginal, though distinctly positive in my mind. Each bidder had individual points of superiority and highly informed technical and strategic judgment played a large part in the final choice. The narrowness of difference between close competitors is what gives Boeing a chance to argue for a change of decision. Absent clear and compelling evidence of Boeing superiority summed across the full spectrum of judging criteria, the bid winner should remain as decided. The procurement process offers an orderly way to decide bids and is likely to be as objective, or more so, than the political judgments now being hastily marshaled.

  • John (unverified)

    I am really suspicious of a bunch of the posts on here. If you lack the ability to think, I can see why don't think there is a problem and Merkely was just up to ... what did you call it? Jingoism?

    It is appalling to use billions of our tax money to buy military stuff from overseas when we have unemployed people all over the place and a national economy tanking.

    I am sure you are happily employed or rich. Some of the rest of us just might be desperate for any job. At least we know you are in favor of outsourcing American jobs.

    By the way, I don't like military spending to begin with, but if it going to be spent...spend it here.

    I hope Novick was happy with your post... or maybe it was Novick himself. I am happy somebody is at the very least concerned about this.

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