Senate to investigate KC-X Tanker data incident

U.S. Sen. Maria Cantwell yesterday secured a commitment from Senate Armed Services Committee (SASC) Chairman Carl Levin to investigate the release of proprietary data by the U.S. Air Force in the $35 billion KC-X tanker competition. The agreement requires the SASC to investigate whether inappropriate and unauthorized proprietary data gave Airbus an unfair advantage in preparing its bid for the tanker contract. Sen. Levin said the committee will hold at least one hearing before Feb. 1 as part of the investigation.

"In the last competition, the GAO (Government Accountability Office) found multiple instances of uneven treatment that when compiled showed a pervasive bias in support of EADS/Airbus," said Sen. Cantwell in a written statement. "I am respectfully requesting that the Chairman of the Armed Services Committee initiate an investigation into the particular release of proprietary data to determine whether or not laws and fair competition regulations have been appropriately followed."

Sen. Patty Murray added, "The Pentagon has already allowed an illegally subsidized foreign company to compete, has refused to take the WTO's ruling on those illegal subsidies into account, and has repeatedly delayed this competition to accommodate Airbus. We cannot afford for the Pentagon to continue bending rules for a company that doesn't play by them. Not when thousands of American jobs are on the line."

Boeing issued the following statement in response to Sen. Cantwell's actions.

"Boeing appreciates Sen. Cantwell’s desire to ensure fairness and transparency in the U.S. Air Force tanker competition. We’re prepared to answer any questions from the Senate Armed Services Committee, in hearings or otherwise, that may result from the commitment Sen. Cantwell received from Sen. Levin to examine the recent release of our proprietary information to EADS/Airbus. We remain concerned about the implications of the release of our proprietary information and we feel some unresolved questions remain. Until we’re satisfied we have a complete picture, we’re keeping our options open for how we go forward. Meanwhile, we can assure Sen. Cantwell and her congressional colleagues, the American taxpayers and the men and women of the Air Force, that we will continue to work hard on our final bid. Our airplane is more advanced and will satisfy all 372 mandatory requirements, while saving billions over the lifetime of the program in operating costs. Given a level playing field we absolutely believe we can win, which is why we have consistently raised concerns about the ability of a heavily subsidized Airbus/EADS to accept levels of financial risk -- and provide pricing -- that a commercial company such as Boeing cannot. We regret that these concerns will not be addressed in the bid evaluation, despite what the U.S. government proved at the WTO and the strong support Congress expressed on this issue.”

We'll keep you posted on this emerging development in the coming weeks.