A federal government watchdog has concluded that the U.S. Air Force made “significant errors” when it evaluated competing bids for a massive aerial refueling tanker contract, a finding that throws fresh uncertainty over plans for an aircraft assembly plant that had been expected to bring jobs to the Mobile area.
The U.S. Government Accountability Office (GAO), the federal agency tasked with auditing and investigating how government money is spent, backed up complaints raised by Boeing that the Air Force’s math and methodology were flawed when it scored the competing proposals for the multibillion-dollar tanker deal. Boeing had publicly argued the Air Force miscalculated key figures during the evaluation process, and the GAO’s review reached the same conclusion, going so far as to call the errors “significant.”
The dispute traces back to February, when the Air Force awarded a $35 billion contract for a new generation of refueling tankers to a partnership between Northrop Grumman and the European aerospace company EADS, the parent of Airbus. That decision passed over Boeing, the longtime supplier of the Air Force’s aging refueling fleet, and set off a fierce protest.
For Mobile, the stakes go well beyond a corporate rivalry between two aerospace giants. The Northrop Grumman-EADS team had proposed building a final assembly line for the tanker aircraft at Brookley Field in Mobile, a project local officials and business leaders hoped would deliver hundreds of aerospace manufacturing jobs and cement the region’s growing foothold in the aviation industry. A reversal of the contract award, or a new round of bidding, could delay or upend those plans.
Although the Air Force is not legally bound to follow the GAO’s recommendation, the finding carries significant weight in federal contracting disputes of this size. The GAO has recommended that the Air Force reopen discussions with both bidding teams and re-evaluate the proposals, a step that could lead to a new round of competitive bidding for the tanker contract. Defense industry observers say that outcome is considered likely given the strength of the GAO’s findings.
News of the ruling moved markets, with shares of Boeing trading sharply higher as investors bet on the possibility the aerospace giant could still win a piece of the tanker business, while shares of Northrop Grumman slipped modestly on the uncertainty.
The tanker competition has been closely watched in South Alabama for its economic development implications. Aerospace and aviation manufacturing has been identified by regional leaders as a key growth industry for the Mobile area, building on the region’s existing shipbuilding and heavy manufacturing base. A large-scale assembly operation at Brookley would represent one of the most significant industrial development wins in the area’s recent history, and local leaders are expected to continue pressing federal officials and the winning bidders to honor commitments to the Mobile site regardless of how the contract dispute is ultimately resolved.
For now, the contract remains in limbo as the Air Force weighs its response to the GAO’s findings, leaving Mobile’s aerospace ambitions tied to the outcome of a Washington, D.C., dispute over bid scoring and government contracting procedure.