The Air Force's $15 billion rescue helicopter and $35 billion aerial-tanker programs, both delayed by protests, will be among the first subjected to a new review system that may make it harder for losing bidders to overturn contracts.
The Air Force’s $15 billion rescue helicopter and $35 billion aerial-tanker programs, both delayed by protests, will be among the first subjected to a new review system that may make it harder for losing bidders to overturn contracts.
The new process will require Army and Navy officials to conduct peer reviews of the Air Force programs before, during and after contract decisions, Shay Assad, the Pentagon’s director of procurement, said in an Oct. 24 interview. The Air Force, in turn, will help review contracts for the other branches. The new process began Sept. 30 for all programs worth $1 billion or more.
“We are using this as a tool in getting things right and get the taxpayers a better deal,” Assad said. “If contractors have a sense that ‘these guys have gone through a review process’ so there are independent eyes, they’ll probably have a higher degree of confidence” in the decisions and file fewer protests.
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The Air Force Combat Search and Rescue helicopter program was delayed after United Technologies and Lockheed Martin objected to the 2006 decision to award the contract to Boeing. This year, Boeing successfully protested an Air Force decision to award a $40 billion aerial-tanker program to a team made up of Northrop Grumman and Airbus parent European Aeronautics Defense & Space. Rebidding on both has been pushed into 2009.
“Make no mistake — with the next tanker buy, there will be a peer review before that request for proposals ever goes out,” Assad said. “There will be a peer review during” the negotiations.
Some question the change, however. The addition of a peer review process “will result in minimal success and add another layer that slows the process down,” said Jon Kutler of Admiralty Partners, a Los Angeles-based firm that invests in defense companies.
Military services examining each others’ decisions “may help them spread the pain and lead to a ‘scratch my back and I’ll scratch yours’ ” mentality, he said.
Instead, the Pentagon ought to break up multibillion-dollar weapons contracts into smaller deals and hold more competitions that include international companies, he said.