The Pentagon is not the Welfare Department

The Pentagon recently awarded a contract for air tankers, the huge aircraft that conduct in-flight refuel operations. The award went to a group with French connections and the airframe is the French Airbus. The group, Northrop Grumman/EADS, beat out Boeing for the contract. There are several lawmakers who are upset with the Pentagon’s decision to select the EADS group over Boeing.

I don’t know the particulars of the deal and I am not familiar with the company that makes the Airbus. That seems to be a decent airframe and considering that Boeing was opting to use an airframe that was older and being retired, the EADS groups seems a sensible choice. If Boeing wins the contract and uses an older airframe that no one else uses, then there is a lot of potential for abuse in the supply of parts. There might also be a problem getting parts at a reasonable cost, or at all.

Several Republicans have indicated that they want to be debriefed on the selection and are upset Boeing did not win.

“We should have an American tanker built by an American company with American workers,” said Republican Representative Todd Tiahrt.

“I cannot believe we would create French jobs in place of Kansas jobs.”

Boeing, the second leading US defense contractor after Lockheed Martin, had been considered the heavy favorite for the contract and according to its website is the largest employer in Kansas.

Perhaps Representative Tiahrt (from Kansas) should look at the contract. Part of the aircraft will be assembled in Alabama and will create 300 jobs there and Northrop claims that 25,000 jobs will be created in the US. However, even if the airplane was going to be completely built in France, why should that matter. The goal of the defense department is to procure the best equipment at the best price from all available sources. The Pentagon is not a social welfare program where contracts are awarded on the basis of how many jobs Americans will be provided. My advice to these companies and these politicians who are upset about this is start building good products at a reasonable cost and you will win the contracts. The DOD should not be required to buy from companies that have screwed over the taxpayer before or have built inferior products. In other words, Todd, the DOD is not in the business of “creating” jobs.

Boeing paid a $615 million settlement to the government in 2003 for procurement fraud. Additionally, their choice of airframes means the government would be the sole consumer of parts because the airframe will retire. A system like this is wide open for corruption and price overruns. Even without corruption, if one company is the only one making parts that the government [contractor] needs and the government is the only that needs them, this company can really have an impact on the price which in turn affects maintenance costs.

I know that these members of Congress like to see contract awarded to companies in their districts so that their constituents get jobs and they can crow about creating them. However, when taxpayer money is being used then the contracting office has an obligation to be fiscally responsible and ensure that contracts are awarded to the company that can provide the best service at the best cost. Sometimes it costs more for quality so price should never be the sole factor however, how many jobs it brings to America should not play into the equation unless one of our enemies is the only other entity that can provide what we need.

I will say it once again. If American companies want to win contracts here in America then they need to build quality products at competitive prices. If they have to build in costs to cover union workers, benefits and all kinds of other overhead then they are going to lose. This is particularly true about a company like Boeing that decided to use an airframe that is near the END of its useful life rather than thinking about the future.

Did Boeing think they had this one in the bag because of some shady back room discussions? It does not matter because the Pentagon selected the company they thought best to build the tankers. Once the politicians can figure out that the Department of Defense is not a social welfare program and that it is not designed to give jobs to Americans then perhaps things will start to run more efficiently. One thing is certain, members of Congress should keep their noses out of the procurement process. There are skilled contract people who deal with this so let them do their jobs. They are, after all, more disinterested than a Congressman trying to get reelected.

Besides, if there are people out there who think the DOD is in the business of creating jobs, you are in luck. The DOD has a great job program. All it takes is a visit to your local military recruiter.

The Weekly Standard

Big Dog

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3 Responses to “The Pentagon is not the Welfare Department”

  1. Kurt P says:

    Didn’t Nancy Pelosi have something to do with Boeing (and her husband) getting that last refueling contract?

    Something about leasing instead of buying tankers.

    Kurt P’s last blog post..Some things just aren’t right

  2. Oh No!!! I find myself disagreeing with the Big Dog for the first time I can remember.

    Airbus is considered by many to be inferior to Boeing. However I am sure that that particular debate is one that is highly politicized and subjective.

    There are quite a few problems with the EADS contract. First and foremost Airbus was subsidized by the governments of France and Germany with the express purpose of undermining the U.S. Airline industry. The design being used for the refueling tanker is the product of those subsidizes. Not only do the subsidies put Boeing at a competitive disadvantage to Airbus but the loans the received were illegal.

    The cost of the plane may look to be better on the onset but you are missing the point that the Boeing design is more fuel efficient and won’t require all the infrastructure costs that will be incurred because the Airbus has a bigger wingspan. Runways, terminals and facilities have to be altered to accommodate the new plane adding to much extra costs that are not being figured in.

    This is just the tip of the iceberg. Yes, Boeing did have issues that should be scrutinized but that doesn’t mean we shouldn’t scrutinize Airbus in the same manner. France and Germany have done exactly what they planned to do. This most certainly undermines U.S. economies and a major player in the U.S. airline industry.

    Lastly though I don’t consider $100 billion in taxpayer money welfare if it creates jobs that require hard work and research. It wouldn’t have been a giveaway. At a time when the U.S. economy suffers from unfair trade with overseas companies it would be nice to see the government do something to keep jobs here for once. I’m not advocating that they get a pass. The government does have to do their job appropriately and provide adequate oversight.

    I wrote about the issue here:


  3. Big Dog says:

    I am not disagreeing with anything you said Trip. As I stated, I don’t know much about Airbus or the company that makes it. The arguments YOU put forth make sense and should certainly be looked at.

    I do not agree with the idea (put forth by politicians) that a contract should be awarded because it creates jobs. If that is a byproduct then fine.

    If the deal is a problem or there were issues that made this a bad deal it should certainly be looked at but the sole determiner of awarding a contract should not be whether or not it provides jobs. If the politicians had put forth the argument you did it would have been a non issue with me (in regard to the jobs part). I think they use the jobs as a fear factor rather than spelling out the points like you did.

    Perhaps they feel that we are not bright enough to understand all that.

    In any event, if what you say is correct it should be looked at but this should be irrespective of any jobs that might be created.

    If Boeing is the best for the contract they should get it though relying on a retiring airframe is not a smart thing to do.