KC-135 Air Refueling Tankers

Floor Speech

Ms. DeLAURO. Madam Speaker, I rise to address the Air Force's recent decision to award Northrop Grumman and its partner, European Aeronautic Defense and Space, EADS, the $40 billion contract to replace the KC-135 air refueling tankers. The Air Force chose against a Boeing team that included Connecticut-based Pratt & Whitney as the engine supplier.

After the contract was awarded, the Connecticut congressional delegation requested a briefing from the Air Force on the source selection process and learned that the two competitors were essentially on par in their bid to win the contract. By all objective measures there was no clear winner, and so the contract award and all the American jobs associated with it were ultimately given to Northrop-EADS for seemingly subjective reason by unidentified personnel within the Air Force. That begs the question: why did the tie not go to the home team?
The Air Force was unable or unwilling to delve into extensive detail as to why Boeing lost the award. Boeing filed a protest with the General Accountability Office shortly after it lost the bid.

What I find particularly troubling in this case is that the Air Force--despite the $40 billion price tag--is not required and does not consider U.S. jobs or the economy in its decision-making. Even more disconcerting is the fact that the Air Force does not seem to be concerned with the security risks of having foreign companies and their employees work on such a major defense project.

Our national economy and our national security are significantly affected by this decision. We have a responsibility to take all the potential consequences into account and in addition, examine the international context in which this decision is being made. The fact is that the impact of this contract will not occur in a vacuum.

For example, the Office of the United States Trade Representative is aggressively challenging in the World Trade Organization, WTO, the millions of dollars in European government subsidies that Airbus--EADS is its parent company--is receiving. The United States accuses Airbus of taking advantage of ``launch aid''--grants and loans at unfairly favorable rates. And so, during a recent hearing, U.S. Trade Representative Susan Schwab told the Senate Finance Committee that the USTR had briefed the Air Force some time ago about the pending U.S. trade case against Airbus at the WTO. Nevertheless, Air Force officials told the Connecticut delegation there is nothing in their rules that call for them to consider the dispute. They ignored it, just as they ignored concerns over their decision's effect on the economy and the likely off-shoring of good paying jobs and our defense industrial base.

Madam Speaker, I believe that this decision will have a deep, long-term negative impact on the aerospace industry and supporting industries in this county, which are so critical to both our national security and our economy. At a time when our Nation faces a recession and a rising unemployment rate, it is wrongheaded to award such a major contract to another nation rather than utilize our own skilled workers and keep scarce resources here at home. The decision will not only continue but also accelerate the erosion of our industrial base and skilled workforce--jeopardizing both our national security and economic prosperity.

Indeed, Connecticut alone stands to lose thousands of jobs at Pratt & Whitney, along with many more from small vendors and suppliers who would have benefited from the award. For Pratt & Whitney's Middletown operations, this news is especially hard to bear, for the company had been planning to use the tanker award to transition away from the old C-17 engine systems.

Labor leaders, businesses, policy experts and others agree that the Air Force made the wrong decision. Organizations such as the Center for Security Policy argue that awarding the contract to an international consortium threatens U.S. national security. And they are joined by organizations like the AFL-CIO and International Association of Machinists in opposing the award.

Finally, I would like to point out that this contract has no contingency plan for dealing with potential cost overruns and schedule delays--problems currently facing the Marine One presidential helicopter program. Defense projects that have been outsourced to foreign countries have experienced significant delays and excessive cost overruns. The Pentagon recently acknowledged that the current helicopter contract awarded to Lockheed Martin and its British-Italian Partner, AgustaWestland-Finmeccanica, is significantly over budget--$11.2 billion, up from an initial estimate of $6.1 billion--and will breach the cost threshold set by Congress.

I am deeply concerned by the fact that, like the Marine One contract, the Air Force has given almost no consideration to the myriad security and economic implications underlying the award of a multi-billion dollar contract to a foreign company. It is déja 2 vu all over again with the American worker, taxpayer and military likely to come out on the losing end.

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