[Congressional Record (Bound Edition), Volume 154 (2008), Part 4]
[Extensions of Remarks]
[Page 5622]
[From the U.S. Government Publishing Office, www.gpo.gov]




                      KC-135 AIR REFUELING TANKERS

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                          HON. ROSA L. DeLAURO

                             of connecticut

                    in the house of representatives

                        Wednesday, April 9, 2008

  Ms. DeLAURO. Madam Speaker, I rise to address the Air Force's recent 
decision to award Northrop Grumman and its partner, European Aeronautic 
Defense and Space, EADS, the $40 billion contract to replace the KC-135 
air refueling tankers. The Air Force chose against a Boeing team that 
included Connecticut-based Pratt & Whitney as the engine supplier.
  After the contract was awarded, the Connecticut congressional 
delegation requested a briefing from the Air Force on the source 
selection process and learned that the two competitors were essentially 
on par in their bid to win the contract. By all objective measures 
there was no clear winner, and so the contract award and all the 
American jobs associated with it were ultimately given to Northrop-EADS 
for seemingly subjective reason by unidentified personnel within the 
Air Force. That begs the question: why did the tie not go to the home 
team?
  The Air Force was unable or unwilling to delve into extensive detail 
as to why Boeing lost the award. Boeing filed a protest with the 
General Accountability Office shortly after it lost the bid.
  What I find particularly troubling in this case is that the Air 
Force--despite the $40 billion price tag--is not required and does not 
consider U.S. jobs or the economy in its decision-making. Even more 
disconcerting is the fact that the Air Force does not seem to be 
concerned with the security risks of having foreign companies and their 
employees work on such a major defense project.
  Our national economy and our national security are significantly 
affected by this decision. We have a responsibility to take all the 
potential consequences into account and in addition, examine the 
international context in which this decision is being made. The fact is 
that the impact of this contract will not occur in a vacuum.
  For example, the Office of the United States Trade Representative is 
aggressively challenging in the World Trade Organization, WTO, the 
millions of dollars in European government subsidies that Airbus--EADS 
is its parent company--is receiving. The United States accuses Airbus 
of taking advantage of ``launch aid''--grants and loans at unfairly 
favorable rates. And so, during a recent hearing, U.S. Trade 
Representative Susan Schwab told the Senate Finance Committee that the 
USTR had briefed the Air Force some time ago about the pending U.S. 
trade case against Airbus at the WTO. Nevertheless, Air Force officials 
told the Connecticut delegation there is nothing in their rules that 
call for them to consider the dispute. They ignored it, just as they 
ignored concerns over their decision's effect on the economy and the 
likely off-shoring of good paying jobs and our defense industrial base.
  Madam Speaker, I believe that this decision will have a deep, long-
term negative impact on the aerospace industry and supporting 
industries in this county, which are so critical to both our national 
security and our economy. At a time when our Nation faces a recession 
and a rising unemployment rate, it is wrongheaded to award such a major 
contract to another nation rather than utilize our own skilled workers 
and keep scarce resources here at home. The decision will not only 
continue but also accelerate the erosion of our industrial base and 
skilled workforce--jeopardizing both our national security and economic 
prosperity.
  Indeed, Connecticut alone stands to lose thousands of jobs at Pratt & 
Whitney, along with many more from small vendors and suppliers who 
would have benefited from the award. For Pratt & Whitney's Middletown 
operations, this news is especially hard to bear, for the company had 
been planning to use the tanker award to transition away from the old 
C-17 engine systems.
  Labor leaders, businesses, policy experts and others agree that the 
Air Force made the wrong decision. Organizations such as the Center for 
Security Policy argue that awarding the contract to an international 
consortium threatens U.S. national security. And they are joined by 
organizations like the AFL-CIO and International Association of 
Machinists in opposing the award.
  Finally, I would like to point out that this contract has no 
contingency plan for dealing with potential cost overruns and schedule 
delays--problems currently facing the Marine One presidential 
helicopter program. Defense projects that have been outsourced to 
foreign countries have experienced significant delays and excessive 
cost overruns. The Pentagon recently acknowledged that the current 
helicopter contract awarded to Lockheed Martin and its British-Italian 
Partner, AgustaWestland-Finmeccanica, is significantly over budget--
$11.2 billion, up from an initial estimate of $6.1 billion--and will 
breach the cost threshold set by Congress.
  I am deeply concerned by the fact that, like the Marine One contract, 
the Air Force has given almost no consideration to the myriad security 
and economic implications underlying the award of a multi-billion 
dollar contract to a foreign company. It is deja vu all over again with 
the American worker, taxpayer and military likely to come out on the 
losing end.

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