Sen. John McCain (R-Ariz.), in a letter to Deputy Defense Secretary Gordon England, has taken issue with Air Force insistence that the two qualified companies vying for the new aerial refueling aircraft contract should divulge the extent of their government subsidies, reports the Mobile Press-Register. The Northrop Grumman-EADS team requested a rule change shortly after USAF indicated it would exact subsidy information, since EADS, as maker of the commercial Airbus, receives large subsidies from European governments. Some lawmakers were pleased to see the provision, since they believe the EADS has an unfair advantage over Boeing in defense contracts. (The subsidy issue—with complaints from both sides—has been before the World Trade Organization since 2004 and officials say it will be sometime in 2007 before the WTO renders a verdict.) McCain says the issue is far too complex for the Air Force, saying its inclusion in the tanker award process “injects into what should be a full and open competition an element of arbitrariness and capriciousness.”
The Air Force and Boeing agreed to a nearly $2.4 billion contract for a new lot of KC-46 aerial tankers on Nov. 21. The deal, announced by the Pentagon, is for 15 new aircraft in Lot 11 at a cost of $2.389 billion—some $159 million per tail.