European subsidies won’t influence tanker deal

WASHINGTON – The Air Force has decided not to consider the billions of dollars in illegal subsidies a European aerospace company received as it seeks new bids on a $35 billion contract to start replacing the nation’s fleet of aging aerial refueling tankers, members of Congress briefed on the contract said Thursday.

The decision not to take into account a recent ruling from the World Trade Organization that Airbus received $5 billion in illegal “launch aid” from four European governments for the A-330 and billions more for other aircraft was not unexpected.

But even so, it touched off an uproar on Capitol Hill.

“We argued and argued and argued,” Rep. Norm Dicks, D-Belfair, said. “I think it’s a mistake.”

Rep. Rick Larsen, D-Lake Stevens, said he was disappointed and has asked the White House to “make sure American taxpayers are not forced to foot the bill for illegal European subsidies.”

The Air Force draft request for bids, which sets the ground rules for the competition, will be released today. But lawmakers were briefed Thursday by Air Force Secretary Michael Donley and other top Pentagon officials.

Larsen, Dicks and Rep. Adam Smith, D-Tacoma, said after the briefing that the Air Force apparently has fixed the problems that led congressional auditors to overturn the earlier award of the contract to a team of Northrop Grumman and the European Aeronautic Defense and Space Co. over The Boeing Co. EADS is the parent company of Airbus, Boeing’s leading commercial aviation competitor.

“It’s a preliminary look, but it appears much fairer,” Smith said.

Dicks said the draft included several factors, including the costs to operate, maintain and base the plane, which should favor Boeing. “That’s all to Boeing’s advantage,” he said.

The tanker contract eventually could be worth $100 billion, as the Air Force needs to replace the 600 or so mostly Cold War-era tankers in its fleet. Boeing is expected to offer the 767 or the 777, and Northrop-EADS the A330.