May 4, 2004

POGO letter to Members of Congress in response to Boeing's full page ad in the Washington Post
May 4, 2004

Dear Member of Congress:

We were appalled to read a misleading and inaccurate full-page Boeing Company ad in Tuesday's Washington Post touting the merits of a proposal for the Air Force to acquire tanker aircraft from Boeing. We wanted you to know the true story of the plan to lease and purchase up to 100 Boeing 767 tankers, a plan that is neither good for our military nor for the taxpayers.

In the ad, Boeing claims that the company and the Air Force worked together for two years to "deliver the tankers expeditiously to the warfighter and provide the best possible value for the U.S. taxpayers." The ad also claims that the tanker deal was in effect forced on the Air Force by Congress, that the tanker's requirements were developed independently by the Air Force, that a "commercial" acquisition process streamlined the acquisition process, and that the deal will provide "unprecedented protection for taxpayers."

These claims are either misleading, untrue, or both. Several government agencies, including the Government Accounting Office, Congressional Budget Office, Congressional Research Service, and the Office of Management and Budget, have been highly critical of the deal.

Most recently, a March 29, 2004, report by the Department of Defense Inspector General, "Acquisition of the Boeing KC-767A Tanker Aircraft" (D-2004-064), was highly critical of the merits of the "commercial" tanker lease proposal and the events surrounding the negotiations for the deal. The Inspector General stated that the DoD should not proceed with the program until it "resolves the issues pertaining to the procurement strategy, acquisition procedures, and statutory requirements."

Here are a few of the Inspector General's conclusions:
  • The Air Force did not tailor the operational requirements document to the military's needs for future air refueling aircraft, but instead tailored it to "correlate closely with the capabilities of the Boeing 767 tanker variant that Boeing was producing for the Italian government."
  • The Boeing KC-767A Tanker Program does not meet the statutory definition of a commercial item, nor does it provide the proper contracting transparency. The Air Force did not establish an appropriate acquisition strategy for acquiring the tanker aircraft, nor did it demonstrate best business practices.
  • The deal cost between $2.5 billion to $4.4 billion more because the Air Force decided to procure the tankers as a commercial item, Reuters has reported. (This estimate has been redacted from the Inspector General report.)

We agree with the Inspector General's conclusions, and urge you to require the Air Force to first justify a need for new tanker aircraft, and then if a need is established, conduct a formal Analysis of Alternatives to determine the best course of action. The Air Force should then proceed with an appropriate acquisition strategy that employs a best business approach.

So far, the events surrounding the controversial tanker deal have lead to a felony plea by Darleen Druyun, the Air Force's former chief acquisition officer who negotiated the contract, as well as the resignation of Boeing's chief executive officer and firing of the company's chief financial officer. Recent events, including public reports of an expanding federal grand jury investigation, suggest that the extent of the lawbreaking did not stop there.

The need for the tankers is still in question. It is expected that a Defense Science Board report due to be made public as early as this week will discredit the Air Force's claims that the existing tanker fleet has widespread corrosion problems.

We hope you will recognize that this costly lease proposal has had little to do with helping the nation's fighting men and women, and everything to do with padding the bottom line of an already prosperous defense contractor. Those who are pushing to gain quick approval of the lease continue to steer debate away from the plan's original announced intent: a bailout for Boeing after it complained in published media accounts of a post-9/11 drop in commercial aircraft orders.

POGO, as a national watchdog that investigates waste, fraud, and abuse, has since its inception been working to protect the interests of the military and the taxpayers. Since, November 2001, POGO has been concerned with the Boeing tanker leasing deal. If you have further questions about the tanker lease, please feel free to contact POGO Senior Defense Investigator Eric Miller at (202)347-1122.

Sincerely,

Danielle Brian
Executive Director
Project On Government Oversight

www.pogo.org
pogo@pogo.org
fax: (202)347-1116

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