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WASHINGTON: A U.S. watchdog office cleared the way on Friday for new bids for a potential $15 billion Air Force contract for combat search-and-rescue helicopters initially awarded to Boeing Co..
The Air Force cheered the decision by the Government Accountability Office, saying it set the stage for reopening talks with all three original competitors to supply the 141 helicopters designed to rescue downed flyers.
On Feb. 26, GAO, Congress's nonpartisan audit and investigative arm, sustained protests by the losing bidders — Sikorsky, a United Technologies Corp. <UTX.N> unit, and Lockheed Martin Corp. <LMT.N> — and recommended re-opening the bidding.
In so doing, it cited what it deemed inconsistencies in the Air Force's evaluation of operations and support costs for the planned new fleet.
GAO, which referees contested federal contracting decisions, passed at the time on addressing the losing companies' other complaints since they would be academic if the Air Force took its advice and resumed the competition.
The Air Force said last week it would follow GAO's nonbinding recommendation, but would only issue an amended bid solicitation after GAO addressed the remaining two dozen or so protest grounds — which the Air Force expected by mid-June.
In a quicker-than-expected response, GAO said in a statement it had denied all the additional arguments raised by Sikorsky and Lockheed, “finding that none furnished an additional basis for sustaining the protests.”
Boeing's contract surprised experts when it was awarded on Nov. 9 because industry observers had expected one of its rivals to win with their lighter offerings.
After the GAO decision, Lockheed was confident its team's US101 helicopter would win after any “full and open re-evaluation,” said spokesman Greg Caires. He said Bethesda, Maryland-based Lockheed would meet the original September 2012 target for initial operational capability with a proposal “at least $3 billion less expensive for the taxpayer.”
If evaluation of revised bids changes the Air Force's determination that Boeing's HH-47 represents the best value, the service said it would make “the necessary changes in the contract award decision.”
“This is good news for the Air Force,” added Brig. Gen. Michelle Johnson, an Air Force spokeswoman. “It allows us to focus on the GAO's Feb. 26 recommendation and move forward with our No. 2 acquisition priority.”
Its top acquisition priority is mid-air refueling tanker aircraft. They were derailed more than two years ago in a procurement scandal that sent the former second-ranking Air Force acquisition official to prison on conflict-of-interest charges. Boeing's then-chief financial officer, Michael Sears, later was convicted of illegally recruiting the Air Force weapons buyer, Darleen Druyun.
Chicago-based Boeing said it was pleased GAO had found that the protest issues not specifically addressed in its Feb. 26 decision were, as Boeing put it, “without merit.”
Boeing remained confident its twin-rotor HH-47 Chinook — the dark horse candidate — was the “most capable, lowest-risk and most cost-effective platform for this important mission,” said Kerry Gildea, a company spokeswoman.
Sikorsky, based in Stratford, Connecticut, said the Air Force had made “material errors” in addition to the one involving inconsistencies in weighing operations and support costs for its HH-92 helicopter.
“GAO has chosen not to sustain our protests about these errors, but the interest of the warfighter and the taxpayer should lead the Air Force to correct them,” said Paul Jackson, a company spokesman. “We will continue to urge them to do so.”
