[Congressional Record (Bound Edition), Volume 154 (2008), Part 9]
[House]
[Pages 13154-13161]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              {time}  2100
                  GAO'S GOOD DECISION FOR WARFIGHTERS

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 18, 2007, the gentleman from

[[Page 13155]]

Washington (Mr. Inslee) is recognized for 60 minutes as the designee of 
the majority leader.
  Mr. INSLEE. Mr. Speaker, we come to the floor this evening to discuss 
this good news that we read yesterday for our warfighters doing great 
jobs for the U.S. Air Force and for the taxpayers who are providing the 
equipment for the Air Force and for a lot of working families in the 
United States. And that was the decision by the General Accountability 
Office to essentially allow the protests against the previous proposed 
decision by the United States Air Force to send a contract for the 
construction of 80 tankers which refuel our Air Force planes 
essentially overseas to a combination that is largely European by the 
Airbus Company.
  And we are extremely gratified and vindicated that the General 
Accountability Office has found that in seven very fundamental ways, 
the decision by the Air Force to send this American tanker using 
American taxpayer dollars for American warriors essentially overseas, 
and they have found that this was a decision that violated some general 
principles of procurement in issuing contracts using taxpayer dollars. 
In a very forceful and powerful and unambiguous decision, the General 
Accountability Office, we call it the GAO up here, concluded that this 
purported decision to send this contract away was a bad decision, 
bottom line. And this decision must be reviewed and we hope ultimately 
reversed.
  So we've come to the floor tonight to talk about why that decision 
was appropriate, why it is welcome, and why we hope the Air Force will 
move forward working with the bidders on this contract to really reach 
a decision that's going to be in the best interest of the country as a 
whole, including our warfighters and our taxpayers and our working 
families.
  And just if I can by way just as a matter of background, this is a 
contract for eventually 179 what are called KC-X aircraft. The first 
tranche would be 80 aircraft. These are the tankers that refuel our 
airplanes, and they are obviously the backbone of our Air Force. 
Without tankers, we don't have an Air Force. This is perhaps the most 
critical of the one type of airplane we have because this type of 
airplane has to be right for the job, competent, survivable, cost-
effective, or we don't have an Air Force that requires this refueling 
capacity.
  Now, the contractor that we'll talk about tonight, the Boeing 
Company, has been essentially the exclusive suppliers of these tankers 
for the United States Air Force for five decades and with incredible 
success. The KC-135 has been an enormously successful airplane, and the 
Boeing family of workers that have provided it have been proud to 
provide that background. And they were, of course, a bidder to provide 
the Boeing 767 as the platform, a very well-respected workhorse 
airplane that is converted for tanker purposes.
  And this bid was originally rejected by the Air Force and given to a 
consortium involving Airbus, and it is that decision that the GAO has 
found was illegal essentially and violated procurement policies.
  Now, the GAO, they're sort of a neutral referee, if you will. They 
don't have any dog in this fight. They reviewed this decision with 
intimate care and concluded in seven ways, which we will talk about 
tonight, this decision was grievously flawed and has to be revisited. 
So we felt vindicated by that decision because we had been arguing on 
this floor for a couple months now that that decision was grievously 
wrong.
  I'm joined tonight by at least two Members, Phil Hare of Illinois and 
Nancy Boyda of Kansas. And I would like to start by yielding to Phil 
Hare of Illinois about his observations about how we need to restore 
this American plane to an American manufacturer to take care of 
American warfighters.
  Mr. HARE. Mr. Speaker, yesterday was a victory for the American 
people. On Wednesday, the Government Accountability Office ruled that 
the Air Force broke its own contracting rules when it awarded a multi-
billion dollar tanker contract to the Northrop Grumman Airbus team and 
recommended that the Air Force reopen the competitive bidding process. 
The GAO said the Air Force made ``a number of significant errors that 
could have affected the outcome of what was a close competition between 
Boeing and Northrop Grumman.''
  Let me just touch on some of the main points of the GAO ruling.
  The Air Force did not assess the relative merits of the tanker 
proposals in accordance with the criteria that the Air Force 
established. The Air Force awarded Northrop's bigger tanker extra 
credit even though no consideration was supposed to have been given for 
exceeding key performance objectives. The record did not indicate, as 
the Air Force claimed, that the Northrop tanker could refuel all 
current Air Force fixed-wing aircraft.
  The Air Force conducted ``misleading and unequal decisions'' with 
Boeing by informing Boeing that it fully satisfied a key performance 
objective but later determined that Boeing had only partially met this 
objective.
  The Air Force unreasonably favored Northrop after the company refused 
to agree to help set up maintenance depots within two years of the 
first airplane delivery, and the Air Force miscalculated the life-cycle 
costs of Boeing's tanker and incorrectly concluded that the Northrop 
tanker would have lowered costs.
  The Air Force improperly increased Boeing's estimated nonrecurring 
engineering costs in accounting for program risk.
  The GAO found seven major flaws in this election process, Mr. 
Speaker. Not one or two, but seven.
  Mr. Speaker, most were doubtful that the decision would be 
overturned. Experts said it was highly unlikely that the GAO would 
uphold Boeing's protest because the GAO rarely sides with the 
protesting company. But fortunately for the American people, the GAO 
saw what Boeing had been saying all along: the competition was unfair 
and fundamentally flawed.
  The GAO ruling leaves the Air Force with only one option: recompete 
the bid. Now, the Air Force has the opportunity to conduct a fair and 
open competition. And I strongly encourage them to consider an American 
company. Our economic and national security depends on it.
  Mr. Speaker, while the GAO ruling in favor of Boeing is welcome, the 
GAO ruling does not address the broader economic and national security 
concerns raised by the tanker decision. The first, jobs, jobs, jobs.
  Over the last 5 months, a record number of jobs had been lost, most 
of them from the manufacturing sector. In May, the unemployment rate 
made a 22-year high jump, reaching its highest level in more than 3\1/
2\ years. But Air Force officials stated that employment effects were 
not considered in awarding the contract. And as a result, tens of 
thousands of good, high-paying jobs will be created in Europe.
  Mr. INSLEE. Will the gentleman yield for a moment?
  Mr. HARE. I will be happy to.
  Mr. INSLEE. I think you seized on a very important point. This was 
not a decision by the GAO that they're just going to change this 
decision because they decided to favor American jobs. Now, we think 
that's a really important point, but the really fundamental aspects of 
GAO is they concluded the rules were violated in making the decision of 
what the best airplane for the money was. They did not take into 
consideration American jobs. We essentially--the Boeing family sort of 
won this on the merits of the airplane without any sort of special 
consideration that we were the hometown team, and I think that's a 
really important point, and I appreciate you making that.
  Mr. HARE. I'm happy to.
  And let me say, Mr. Speaker, I refer my colleagues to an article 
titled ``Bailing Out On America'' out of the EPI Briefing Paper. It is 
a job analysis report on the tanker decision from the nonprofit, 
nonpartisan think tank, The Economic Institute.
  The report titled ``Bailing Out On America. Air Force tanker decision 
will ground at least 14,000 U.S. jobs,'' found that Boeing recreated at 
least twice as many U.S. jobs as the Northrop Grumman European Airbus

[[Page 13156]]

team. According to the EPI report, Airbus Northrop exaggerates its own 
job claims. Equally important, the report states that U.S. job losses 
are likely to grow in the future if the contract is awarded to EADS 
because it will give the company sizable cost advantages and will lug 
up the future competitions to supply tankers to the Air Force.
  Mr. Speaker, at a time when America is facing a recession, creating 
jobs in Europe is not in the best interest of the American people. We 
owe it to the American people to take advantage of the opportunity to 
create jobs right here in the United States and resuscitate our failing 
economy.
  Several other issues remain outstanding not addressed in the GAO 
which includes a pending case before the World Trade Organization 
against EAD, the parent of Airbus, for accepting illegal subsidies, a 
violation of international trade laws. This and other issues must be 
addressed before the tanker program can move forward.
  And let me just, if I could, my friend, just conclude by saying a 
couple of things.
  We're fighting two wars here. We just got through passing billions of 
dollars to fund them. Not too long ago, the guidance system for bombs, 
I don't exactly know the exact part that was manufactured in India, was 
shipped off to be manufactured in China. That work is gone. National 
defense is a risk, in my opinion, and those jobs aren't coming back; 
and now we have a company who wants to build tankers outside of this 
Nation not knowing if tomorrow this company or this country that we 
seek to have this plane made by is going to remain friends with the 
United States.
  I was on a talk show program and was amazed at the number of calls 
that I got from people saying, What are they thinking out there? How 
could they outsource national defense items to be manufactured by 
somebody other than the United States when we're at war? I have an 
arsenal in my district that made the Up-Armored Humvee doors that saved 
hundreds of lives, and I have to tell you, it makes no sense.
  All we asked for was a fair shake for Boeing. The GAO report, I 
think, will give Boeing the opportunity to compete on what is fair. I 
commend the GAO for doing this, but let me be clear. We have an 
obligation to protect this country when we're at war, and the products 
that we produce to protect our men and women and to fight and sustain 
this war, whenever possible, ought to be made in this country and ought 
to be made by American workers.
  And I thank my friends for inviting me this evening.
  Mr. INSLEE. I appreciate the comments. Again, the GAO decision was 
not based on job creation or job loss, but we, of course, think that's 
an important value. And this isn't just those of us who are from the 
Boeing kind of country who feel this. A study by the Economic Policy 
Institute studied the proposals of Boeing in the competing European 
Airbus and concluded that the Boeing project would create twice as many 
jobs, 14,000 more jobs in this country than the other.
  Now, we've seen a lot of these fancy ads by the Airbus contractors 
suggesting that it's an American airplane. But you can't have an 
airplane take off to Luce, France, as wonderful as that country is, 
land it here and slap an American decal on it and make it an American 
airplane. And the EPI study, I think, is the most dispositive in 
showing that 14,000 additional jobs were at stake in this decision.
  But again, Boeing wanted to win this on the merits on what's the best 
airplane. And that's what's so impressive about the GAO study that for 
seven, not just one sort of technical violation, not two technical 
violations, they concluded that this decision violated this sort of 
seven deadly sins of procurement policy. And every single one of them 
went against Boeing contrary to the law.
  So this was a very powerful decision. I was going to use the word 
``slam dunk,'' but I'm not sure that's a legal term of art. But that's 
what it was. This was not some sort of just minor technical decision.
  I would like to now yield to Nancy Boyda of Kansas who I appreciate 
joining us this evening.
  Mrs. BOYDA of Kansas. Thank you very much, Mr. Inslee. I appreciate 
being able to join this group.
  And it is a good day. I think it's a very good day for America. I 
know that it was a good day for Kansans when we got the news that the 
GAO report upheld the protest. There were certainly sighs of relief.
  Let me make it clear what we're relieved about. First and foremost, 
we're relieved about our own national security, and that's what 
everybody has ultimately been most concerned about. Outsourcing our 
national security, outsourcing our technology, we all know that it's 
very hard to keep secrets, to make sure that that intelligence stays in 
our own hands.
  So number one, the people of Kansas were very, very happy that our 
national security today would be stronger tomorrow because we did not 
outsource this important contract. It's a huge, huge contract and 
obviously the implications for our country are tremendous.
  When we look right now at the industrial base and we wonder sometimes 
why we're not getting enough equipment and why it has taken us so long 
to get equipment to Iraq and Afghanistan, our own industrial base is 
right here in America, and we need to keep it strong.

                              {time}  2115

  So, again, there was rejoicing in the streets of Kansas.
  Let me make it clear, the first reason was for our national security, 
and keeping that technology here with that intelligence right here at 
home.
  Mr. INSLEE. You used the word ``strong,'' and I think that's very 
important here, because the Boeing airplane, the Boeing 767 was found 
by the Air Force's own evaluation to have five times as many 
survivability discriminators as the Airbus plane. Now, that's a fancy 
term to mean it had five times as many characteristics that would allow 
the plane and its pilots and its crew to survive and complete its 
mission.
  It is a stronger airplane from the sense of survivability. You used 
that term, and I just want to use a quote by former United States Air 
Force Chief of Staff and Retired General Ronald Fogelman who stressed 
survivability as an asset of the Boeing plane. He said, ``When I saw 
the Air Force's assessment of both candidate aircraft in the 
survivability area, I was struck by the fact that they clearly saw the 
KC-767 as a more survivable tanker.'' This was a statement to the ARSAG 
in his role that he was serving in as a consultant of Boeing. He said, 
``To be survivable, tanker aircraft must contain systems to identify 
and defeat threats, provide improved situational awareness to the 
aircrew to avoid threat areas, and protect the crew in event of attack. 
The KC-767 has a superior survivability rating and will have greater 
operational utility to the joint commander and provide better 
protection to aircrews that must face real-world threats.''
  Now, this just isn't Boeing talk. This is the Air Force's own 
conclusions that the ``discriminators''--it's a fancy word used in this 
business--that Boeing included more robust surface-to-air missile 
defense systems, cockpit displays that improve situational awareness, 
better electromagnetic pulse hardening, automatic route planning and 
rerouting, better armor protection features for the flight crew and 
critical aircraft systems, and better fuel tank explosion protection 
features.
  The Boeing 767, according to the Air Force's own evaluation, 
concluded that Mrs. Boyda's comment that this is a stronger airplane is 
correct.
  Mrs. BOYDA of Kansas. I think what the American people are learning 
is that Boeing has been in the tanker business for decades. You know, 
50, 60 years, they have been the supplier of these tankers, and can you 
imagine what these tankers do. These tankers are refueling aircraft 
that are speeding across our skies. They're refueling them in midair. 
This technology is something that clearly has taken years to develop. 
It's been done extremely well and extremely safely right in Kansas in 
our Forbes Field in Topeka, Kansas, where we have the KC-135E model.

[[Page 13157]]

  We just retired the oldest KC-135E tanker in the country. It was 51 
years old, and quite honestly, with maintenance, it could have been 
maintained. It was time to put it to rest, to take it down to the bone 
yard. It had done its duty and it served its country very well. But 
that Boeing tanker has been out there making sure that our country is 
safe for the last 51 years, and that's what they brought to this.
  The fact that it has the safety and the survivability should not be 
any real shock to anyone. They have perfected this technology. They 
have embraced this technology, and they've provided this technology to 
our Air Force and to our entire military for the last 50, 60 years. And 
clearly, they had a lot to offer, just the fact they've had this much 
experience.
  So the survivability, you know, it's nice to see that there's data 
and the analysis shows that, but they've been doing this for decades. 
It's no big shock that the product that they were going to deliver was 
something that the United States can be more assured that it will be 
done on time and with the quality that's suitable for our military that 
are putting their lives on the line when they're up in the sky, doing 
this incredibly dangerous midair refueling.
  I also say, too, I have the honor of representing two Army bases: 
Fort Leavenworth and Fort Riley. I represent the headquarters of the 
National Guard there in Topeka, Kansas, which is where Forbes Field is. 
We have an Army and Air Force unit that are there, and then we have 
McConnell Air Force Base in Wichita.
  But what I hear from a lot of our military is just the statement that 
when you're behind something, when you're out there, whether you're in 
the Army, whether you're in the Air Force, whatever branch, that when 
you're picking up something, whether it's munition, whatever you're in, 
the fact that that's made in America means something to them. They want 
to know that what they're using to defend the country and to keep 
themselves safe, it means something. And I've heard from people that 
it's very unsettling to pick up something and to think that our 
military equipment or military goods are not made here in the United 
States.
  Clearly, if our Air Force had chosen Airbus, they would have gone out 
and done whatever it took to keep our country safe, but I've heard over 
and over again they'd like to be out there using American-made 
equipment, and it doesn't seem like too much to ask.
  Mr. INSLEE. Maybe the question is why not the best, and in this case, 
the Air Force's own conclusion is the strongest, most survivable 
airplane essentially is the Boeing 767. So I appreciate this comment 
about strength from Kansas.
  Now, I want to turn to my friend Earl Blumenauer from Oregon who's 
been a leader on a number of high-tech issues. I don't know if Mr. 
Blumenauer wants to address the fuel efficiency issues or other 
matters, but I'd appreciate his comments.
  Mr. BLUMENAUER. Thank you, Congressman Inslee. It's a pleasure to 
join with my colleagues from Illinois and Kansas for this conversation 
this evening.
  This is serious business, and in a time when energy impacts are 
devastating our airline industry and when there is no part of the costs 
for the Air Force going up faster than fuel efficiency, I think we 
could spend the rest of the evening talking about the relative merits 
there and the advantage that this means in terms of operation and in 
terms of budget.
  But I really wanted, if I could, just to circle back here for a 
moment because I appreciate the focus that we're hearing from my 
colleagues about the merits of the issue.
  Now, I come from a little sliver of the northwest. We're not the 
epicenter of that, but there's 1,000 high paying, family wage jobs just 
in my little district that are involved with this and is going to make 
a difference. But candidly, the way that the other proposal was 
structured, there would be a little residual benefit. It was sort of 
politically engineered, and there was a little bit, not nearly as much 
as the Boeing proposal, and Congress can and should consider that. It 
has huge impacts in some parts of the northwest, in the Midwest, and it 
has ripple effects throughout the economy.
  And at the end of the day, this is something I think policy-makers 
have an obligation to be aware of and comment, and I appreciate my 
friend from Illinois talking about pending disputes with the WTO. There 
are serious allegations about unjustified subsidy for Airbus that 
really do need to be resolved, because we are in an anomalous situation 
where if we rush ahead with this and grant the award, perhaps on a 
basis that wasn't justified, we could end up further undermining the 
position of American industry by somebody who's not playing by the 
rules and further undercut us, which is something that, going back to 
the drawing table, allowing that challenge to work its way out, I think 
has great merit.
  But I appreciate what my colleague from Kansas was talking about in 
terms of the end of the day we're talking about a critical component of 
our defense establishment. And while there's lots of complaints, and 
some that I think are merited that we need to review our military 
approach to make sure that we're not spending too much money fighting 
the Cold War, clearly there is no argument, no argument that we can 
afford to not have a robust and effective exercise of our air power, 
and the air refueling is essential to warfare today, things that are 
going on today and are going to go on tomorrow.
  And when we're looking at a strategic, critical component of our 
ability to supply our troops, that is already averaging almost half a 
century, and before anybody could move forward it will pass that 
critical 50-year mark, this raises I think to a critical level.
  And I hope that every single Member of Congress in the House and the 
Senate takes the time to review this GAO report because I think it's 
going to raise serious questions in their mind, as it did with GAO. We 
want to make sure that that evaluation is done in the most cost-
effective manner--big questions about whether the bid does that--and we 
want to make sure we are treating, given the troubled history of this 
project--and some of us, Congressman Inslee, we've been around a little 
bit. We've watched the bumpy ride to get to this point. This has got to 
be done letter perfect. We can't afford to have any questions or 
errors. And boy, any objective reasoning suggests that what we've 
heard, the way the Air Force handled it doesn't meet the bill.
  Mr. INSLEE. I really appreciate again reiterating that we want this 
decision to be made on the merits, and one of those merits I want to 
point out just that I find incredible about this decision--and that's 
why I'm so happy about the GAO decision--is the recognition that the 
Air Force totally failed to consider accurately the lifecycle costs of 
these two proposals.
  Now, obviously there's the up-front costs, but to the taxpayer, it's 
the lifecycle cost or the whole cost of maintaining and operating and 
parking the airplane that you really have to look at. And according to 
the GAO and the United States Air Force, they made a mistake in 
evaluating what the lifecycle costs were.
  Just reading from a Reuters article June 12--it was a few days later 
confirmed by GAO--the U.S. Air Force has conceded that Boeing Company's 
proposed KC-767 refueling tanker would cost less over time than what 
was then the winning plane by Airbus.
  And this is what the taxpayer has at stake in this thing, and this 
comes--we need to get down in the weeds a little bit--by the failure to 
take into consideration several things accurately. Number one, the 
Boeing airplane uses 24 percent less fuel. It's 24 percent more 
efficient. So you save, it's about somewhere between--I'm looking for 
my number here--according to a pretty good study, over the 40-year 
operational life, the Boeing plane would save $30 billion in projected 
fuel costs, $30 billion.
  I'd like to yield to Mr. Blumenauer for a comment.
  Mr. BLUMENAUER. I appreciate you zeroing in on this, Congressman 
Inslee, because you, as much as anybody in Congress, have been spending 
the

[[Page 13158]]

time looking at the consequences of our current use of energy. I think 
the evidence is not only in terms of the percentage that you 
referenced, almost a quarter less over a 40-year period, the evidence 
would suggest that the trend line for energy costs are likely to be 
understated.
  Who would have thought, frankly, 6 months ago that we'd be bumping up 
against $140 a barrel oil and with the likelihood that it could go to 
$200 before it gets down below $100?

                              {time}  2130

  So the costs are magnified over time.
  And given the fact that these planes have actually stayed in service 
far beyond their design life, that that is further--what if these are 
going to be operational for another 50 years? I think that projection 
just pales; it makes it all the more important that we do that.
  I appreciate your focus. And I appreciate having a chance to join you 
in this discussion.
  Mr. INSLEE. And by the way, there seems to be no doubt, these 
statistics we're giving are essentially inarguable. Airbus is not 
contesting the fact that the Boeing airplane is 24 percent more fuel. 
This is just fact. The GAO find that this is, I believe, one of the 
reasons of life cycle cost.
  And by the way, it's just not fuel. Because the Airbus plane is so 
gargantuan, it's going to cost taxpayers an additional $2 billion in 
military construction to rebuild the hangers to hang them in and places 
to park the things. It will also cost $13 billion in additional 
manpower over the life cycle. So there are numerous reasons why the 
Boeing plane is a better deal for the taxpayers.
  Mr. HARE. Will the gentleman yield? You know, you just mentioned $13 
billion. We've tried now on two occasions to insure 10 million children 
for $6 billion. So if you take a look at the cost overrun just on the 
hangers and you look at the amount of money that we're spending--I 
think what's really important to also note here is the GAO rarely does 
this. Normally, the expectation would be that they were going to go 
with what they had. And when you read this report, and as my friend 
from Oregon said--and I hope that every Member of this Chamber will 
read it because I think it's critical if you're going to make an 
informed decision on this--if you read this, you will see that, indeed, 
Boeing didn't have a chance to compete fairly, you had tremendous cost 
overruns into the billions of dollars, you have thousands of American 
jobs. But again, I go back to my friend and say, this is a Nation at 
war fighting two wars, and we cannot allow the outsourcing.
  My friend from Kansas mentions with great pride that she has bases, 
and these soldiers need and expect the best equipment, and Boeing can 
give that to them. But most importantly in this whole process is the 
whole question of fairness. We said this before. When I met with the 
Boeing people, they said, look, we don't want favoritism here, we just 
want some fairness brought into this process so we can compete. You 
can't complete when you change rules in the middle of the game. I liken 
this, and I was telling one of the Boeing people, it's like tying 
somebody's hands behind their back, putting a blindfold on, and 
fighting for the Heavyweight Championship of the world, you're at a 
slight disadvantage. And that's what happened in this report.
  So I'm pleased. And I really appreciate my friend from the State of 
Washington for inviting me to be here tonight to talk about this 
because this is critical, this is critical for our national defense, 
it's critical for our jobs. And as you said, when you think of the 
billions of dollars that we're going to be wasting on this project that 
we could save, that we could be spending on other things, it really 
just makes a whole lot of sense. So again, I yield back and thank you 
very much.
  Mr. INSLEE. Well, I appreciate that. And just so people know who may 
be listening to this--and maybe even a couple of our colleagues, you 
never know, it's a slow night--I'll just read finding number six by the 
GAO. And they said, ``The Air Force's evaluation of military 
construction costs in calculating the offerer's most probable life 
cycle cost for their proposed aircraft was unreasonable. When the 
agency, during the protest, conceded that it made a number of errors in 
evaluation that, when corrected, resulted in Boeing displacing Northrop 
Grumman as the offerer with the lowest, most probable life cycle cost, 
the GAO concluded, and ultimately after they fixed their mistakes, 
concluded that the Boeing airplane is a better deal for the American 
taxpayer.'' Now, to me, if you've got a stronger airplane and a better 
deal for the American taxpayer, and peripherally, but not 
unimportantly, 14,000, at least, more jobs in America, this ought to be 
a slam-dunk decision. We hope that it will be, ultimately.
  I will yield to Mrs. Boyda.
  Mrs. BOYDA of Kansas. I was just thinking, I think the American 
people are beginning to understand by now that specifications for this 
tanker, this refueling aircraft that is so important to us, there were 
some specifications that were given, this is what we want. And all of a 
sudden, here they come with this great big airplane, and now they want 
to be congratulated for not coloring in the lines, for not doing what 
they were asked to do. It kind of reminds you of a teacher that says 
you can write a paper, but it can only be 10 pages, and somebody wants 
extra credit for writing 13. Well, it was a 10-page paper assignment 
not a 13-page paper assignment.
  So it's interesting that it has taken this long for the Air Force to 
understand that it was going to take this much more money to take this 
big tanker--it wasn't what the Air Force had asked for. The Air Force 
had asked for a tanker of the proportions and the specifications, and 
that's what Boeing did. They said, this is what you want. By the way, 
we've done this for the last 50 years, so we understand why you're 
asking for this. And they went about putting together a tanker that was 
the best deal with the very best equipment for the American people and 
for our military. And they did what they were asked to do. And all of a 
sudden, then all of this kind of bizarre math, this fuzzy math starts 
to come out, and some way or another it's going to be cheaper. It just 
never made any sense.
  And let me finish by saying, I really applaud the GAO. I think many 
of us thought, well, it's going to be difficult for them to overturn 
that. But they sharpened up their pencils and they said, well, no, this 
doesn't make any sense. And so we've got to applaud the GAO for 
standing up and saying this is the right thing to do.
  Mr. HARE. Well, I think the gentlelady from Kansas brings up a great 
point. Here's a company that's been manufacturing this for 50 years. So 
they're not the new kid on the block, they've been there and they've 
done that. And every time they've produced it, they've produced it with 
quality. And you don't have the WTO looking at them and all kinds of 
different things.
  The bottom line here is this is a great product. And giving the 
opportunity for this company to be able to compete on a level playing 
field, that's all they were asking for, and now they're going to get 
the opportunity to do so. And I think at the end of the day, when that 
happens, I think the taxpayers will benefit, I think the American 
people will benefit, I think our troops will benefit. And, you know, as 
my friend said, when you start talking, as the late Senator Dirksen 
said, a billion here and a billion there, pretty soon you're talking 
about a lot of money.
  So again, I thank the gentlelady for yielding, and I yield back.
  Mr. INSLEE. And just to back up what Mrs. Boyda said, she's not just 
whistling Dixie--or Kansas in this case--she has backed up what the GAO 
said. They said specifically, in finding number four of seven deadly 
sins, they said, ``The Air Force conducted misleading and unequal 
discussions with Boeing by informing Boeing that it had fully satisfied 
a key performance parameter objective relating to operational utility, 
but later determined that Boeing had only partially met this objective. 
And then there's a bunch of other language that's pretty technical.
  But what happened here is, for some reason that I don't know for 
sure--I

[[Page 13159]]

have some suspicions of what happened here, and that doesn't really 
matter--but for some reason the Air Force decided bigger was better. 
And they went and in their original decision opted for a bigger 
airplane and violated, in several different ways, the procurement rules 
in order to reach that conclusion.
  Now, we've said that the Air Force has already recognized that their 
life cycle cost decisions were in error. But we really hope in this 
rebidding that they will not be persuaded that bigger is always better. 
And what we have found, and some of the things we've talked about 
tonight, why bigger is not better, it's actually worse in this 
particular case because when you build a plane that's that much bigger, 
that exceeds your real requirements, you end up spending a quarter more 
fuel and you end up spending $2 billion on construction costs.
  And here's something that I think is important. The Airbus airplane 
can only use half as many airfields around the world as the Boeing 767. 
Now, you think of all the places we can end up in a military conflict 
around the world and all the relatively little airports that we may 
want to get involved in, I mean, who knew we were going to be flying 
from airports in Iraq 20 years ago when we made some procurement 
decisions? We have to be ready to fly these airplanes anywhere in the 
world. Yet the Airbus decision, if you buy this larger airplane, it can 
only use--I think it's either 200 or 400 airports that the Boeing plane 
can use that the Airbus plane cannot. I think that's really important, 
and one of the disadvantages of size. Plus, if you look at the 
requirements, the Boeing airplane fulfills the requirements that they 
asked for on how much capacity they had to have for refueling, Boeing 
met it.
  So that's one of the things that Mrs. Boyda was alluding to that GAO 
said, just because you do more than the requirement, it doesn't do you 
any good. Why give extra bonus points to something that just costs more 
money and eliminates half the airports in the world where you can land? 
That doesn't make sense. And I think that was one of the reasons that 
GAO decided.
  And I yield to Mrs. Boyda.
  Mrs. BOYDA of Kansas. And as I understood it, too, one of the GAO 
findings was that the Airbus tanker wouldn't refuel all types of 
aircraft, too. So you had something that certainly was bigger. But what 
was found out was that bigger wasn't better in this particular 
instance; you needed longer runways to be able to land them. And so 
that limited the number of places.
  But this Airbus tanker also wasn't even able to refuel as many 
different kinds of aircraft as the Boeing aircraft. And I will go right 
back on message of saying, I wonder why. Well, Boeing has been doing 
this for 50, 60 years, and they knew what they were doing. And so they 
understand the intricacies of what needs to be done and why you need to 
be flexible, and that flexible is finding that optimum way to do this. 
And the KC135Es were replaced by the Rs. They've been doing this and 
making these tankers and optimizing the whole process of making these 
tankers for decades.
  Mr. INSLEE. And as a result of this decision that has now been 
reversed, thankfully--at least by the GAO, they're calling for a 
reversal--what really happened is that the original decision, the Air 
Force decided to buy excess capacity that was not needed and gave up a 
capacity that was needed, which was refueling all our types of 
aircraft. And the GAO concluded--this isn't just Boeing talking, it's 
the GAO concluded--that the Airbus cannot refuel some of the airplanes 
we have in stock right now.
  So you sort of paid more money for more life cycle cost for the 
Airbus airplane, you bought capacity you did not need, and you gave up 
the one thing you do need, which is to be able to refuel every kind of 
airplane. What are we supposed to tell the pilots of the Tilt-Rotor 
aircraft; sorry, you don't get to fuel? We've made a procurement 
decision that, you know, you'll just have to take the long way around? 
It was a serious, serious misjudgment because they concluded, for 
reasons that escape me, frankly, why bigger is better. And I think 
that's really the fundamental decision that was made in that regard.
  I would like to, if I can, talk about something else that is 
important that was not in the GAO decision that I do think bears on 
this, and I think we, as Members of Congress, have a responsibility to 
look at, and that is this issue of whether or not it should be Federal 
policy to reward countries and companies that are violating 
international law on our trade agreements.
  Right now, the United States Government has concluded that the Airbus 
company has been the recipient of billions of dollars of illegal 
subsidies, illegal subsidies from the governments in Europe, and has 
concluded with such force that the United States Government, the U.S. 
Trade Representative, has filed a claim, a lawsuit of sorts, against 
Airbus because of these illegal subsidies. So the United States 
Government has determined that this contractor has received illegal 
subsidies violative of international and consequentially United States 
law. But then what did the other agency of the U.S. government turn 
around and do--or tried to do before the GAO blew the whistle? They 
turned around and tried to give a $40 billion contract to the very 
company that's violating the trade laws. Now, how does that make us 
look in international law if we're suing them, saying there's illegal 
subsidies, and we turn around and give them a $40 billion contract 
while taking away 14,000 jobs here away from a very well known and 
successful contractor, the Boeing company? It's ludicrous. Talk about 
the right hand not knowing what the left hand was doing here.
  This is an issue that the GAO did not review and the Air Force did 
not review because some people in the Senate did not allow them to do 
that--that's a whole other story how that happened--but it seems to me 
that we, as Members of Congress, should stand for the enforcement of 
these trade laws and not reward companies and contractors who we 
ourselves have concluded violated the law. And I think that's an 
obligation on us. It's beyond the obligation of the GAO. That wasn't 
their job, but I think it is our job.
  Mr. HARE. Will the gentleman yield?
  Mr. INSLEE. Yes.
  Mr. HARE. Well, I'm a new Member here, but I ran on this whole issue 
of trade and fair trade, as you know. And you look at this, and here is 
a company--and I don't mean to be picking on them this evening, but 
facts really are facts, so let's see if we can get this straight. 
Here's a company who is in violation of trade laws, who was about to 
receive a $40 billion contract that would have cost us thousands of 
jobs to build a tanker that can't land at some airports.
  Mr. INSLEE. Half the airports in the world.
  Mr. HARE. Half the airports, and cannot fuel the necessary planes 
that we might have when we go to war. Now I may not be the sharpest 
knife in the drawer here, and I know this has been a long day, but 
again, I think clearly we had a company, as my friend from Kansas says, 
a company that's been doing this 50, 60 years, a stellar reputation, 
they could have produced a smaller craft that could land where it's 
supposed to land, fuel what it's supposed to fuel, and not reward this 
corporation for violating Federal trade laws.

                              {time}  2145

  So to me, this is really a no-brainer. And I think that every Member 
of the House, not only should they read the report, which I think is 
important, but I think they should listen to what my friend said just a 
few minutes ago, about do we really want to get down the slope of 
rewarding a company with a $40 billion or $4 million or whatever the 
contract is when they are in violation of Federal trade laws? I don't 
believe that is what the people sent us here to do. We're supposed to 
protect this country.
  This is a great day. Yesterday was a great day for the GAO report. 
But we have to be vigilant here. We have to keep pushing on this. And I 
have to tell you, as long as we're here, I think we

[[Page 13160]]

have an obligation to hold the Air Force's feet to the fire on this. 
People make mistakes. But let's don't make it again, and let's don't 
make it again, and let's don't make it to the tune of a $40 billion 
contract to a company that can't produce what we really need.
  Mrs. BOYDA of Kansas. I would just say when it comes to the issues, 
and clearly it just was nonsensical. Again I really appreciate the fact 
that before we're talking about these kinds of issues, we're talking 
about the plane on the merits. Because I think that's the main thing 
that the American people, they want a plane that works. So I think we 
have established that that was the better choice. But what just 
absolutely cooks people back in Kansas is the concept that we have 
agreements, and there is no real enforcement of them. It's just like 
they're not even worth the paper that they're on. And to just blow it 
off and to say that, yes, we're in the middle of a disagreement, we're 
in the middle of a trade violation with the same company, just as you 
were saying, I agree with you in what you have said. I would just add 
the one thing that in Kansas, people do not understand why we put 
together policies, why we pass laws right here and then we fail to 
follow through on implementing them or enforcing them, whether it's 
issues of trade. Certainly that is just a very, very raw one in my 
district, whether it's issues of just, I won't go in any myriad of 
issues that we probably ought not to start down that path tonight. But 
that is just what really chaps people.
  We have these agreements. Why do we even bother to do them if we're 
not going to implement them? Not only within the letter of the law, but 
the spirit of the law.
  And so certainly we have an enormous aircraft industry in the State 
of Kansas. And again I would as much as it's a huge economic impact for 
us, first and foremost, we have so much military in Kansas, and I would 
again come back and say that this was ultimately about making sure that 
we have what we need to keep our country safe and to keep the men and 
women who are serving in our military safe. That was first and 
foremost.
  Mr. INSLEE. And in making these arguments, I don't think any of us 
are apologetic for the fact that our constituents and families have 
been very active in the Boeing Company. My uncles and cousins, I 
remember my best friend growing up in south Seattle, his dad had the 
job of breaking Boeing airplanes. And his job was to try to figure out 
what you had to do to break a Boeing airplane. And when you were a kid 
growing up, to think that your job was to get to blow up things was 
pretty fun.
  Mr. HARE. Sounds like my son.
  Mr. INSLEE. One of his coolest jobs was they would take a Boeing 727 
and put a jack underneath it, and jack that wing up and see how far 
they could jack that wing up before it failed. And when they failed, 
they would literally explode because of the tension. And those things 
get up almost 35, 45 degrees. They have incredible flexibility as well 
as strength. So I grew up with Boeing as part of my blood and family, 
in the interest of full disclosure. But I think the arguments we're 
making here tonight go well beyond our sort of familial and constituent 
interests and duties because I think what we're portraying is a 
decision that it was so far out of kilter that you had the GAO now 
blowing the whistle on it, and the GAO is like the referee. They had an 
instant replay. They had it right on videotape. And they concluded this 
was a decision that was way, way out of bounds. And we are now hopeful 
that the Air Force will fully and fairly re-evaluate this. And I think 
that they will conclude in something that all of us Members conclude, I 
think tonight.
  And I was counting on what Mr. Hare said, five inarguable truths 
about this contract. I just want to list them, that nobody can argue, 
everybody would agree, even our Air Force colleagues would have to 
admit this. Number one, the Air Force's own conclusions showed that 
there were more survivable discriminators to show the survivability to 
the Boeing airplane helping the warfighter survive and do their jobs; 
Number two, the life cycle costs, when you include all the costs for 
maintenance and reconstruction of the hangars and everything, are less 
expensive in the Boeing airplane than the Airbus airplane; third, that 
the fuel life cycle costs are going to be less for the Boeing airplane 
than the Airbus airplane, in the billions of dollars; and fourth, and 
this wasn't in the GAO report but we know it to be true, if we go with 
the Airbus product here, we're going to be spending $40 plus billion of 
American taxpayer dollars rewarding a company that our own Federal 
Government has concluded is guilty of very serious violations of 
Federal trade rules in the billions of dollars; and fifth, and one that 
is maybe closest to our hearts at the moment, the Boeing airplane will 
have at least, and probably more than this, 14,000 families more 
employed doing high quality work than the competitor.
  So the GAO said there were seven major errors, which is extraordinary 
by the way, not just one, seven major fundamental errors. We will say 
tonight that there were five strikes and you're out, those are the five 
strikes that all of us can agree on I think. So we're hopeful that the 
GAO is heeded, if it is not by the Air Force, we will be doing our job 
here in Congress, and we will be finding the right avenue in the 
appropriations process to not allow this decision to stand to make sure 
that the right decision is made.
  Mrs. BOYDA of Kansas. I would like to add just one other aspect, too, 
that we haven't really touched on too much. I serve on the House Armed 
Services Committee. And earlier this year, we had a hearing with the 
National Industrial Security Program we started back in 1993 to take 
the intelligence, again, and the intellectual property and to make sure 
that we were keeping classified information classified when it to came 
to the purchase and interaction with foreign companies.
  And I asked the question, did they participate, what was their 
participation in this whole tanker contracting process, to make sure 
that this classified information about these tankers was being secured. 
And they really weren't very involved. I said, ``Well who is going to 
maintain the security? Who is going to see that there are trade 
secrets, there are national security aspects that are being, that 
should be maintained?'' And during the course, they didn't say this 
about the Boeing contracts specifically, but their own, the assessment 
was that the NISP had been so underfunded and so dismantled over the 
last several years that they said that their services overseeing 
foreign military contracts, they described it as Swiss cheese. So we 
have to look at the big picture here tonight and just throw that in as 
one additional thing.
  There was not any real oversight for what we're going to do to 
maintain that intellectual property and to maintain that security, that 
classified and secure information I didn't see. And I was allowed to 
ask in a few instances, but there was no, I didn't at least find out 
what we were doing in order to keep or maintain that classified 
information. And the people that certainly seemed to be the ones that 
should be doing it said, no, they really weren't up to it or they 
weren't doing it. So another reason on top of everything else. I 
certainly appreciate the gentleman from Washington including me in this 
discussion tonight.
  Mr. INSLEE. I appreciate your contributions on this and so many other 
things. And I want to say that this, I think, has opened many Members 
of Congress' eyes to the procurement policy. There are some issues we 
have to think about in general going forward of our procurement policy. 
But this is one we have to get fixed to start with before we act 
holistically. I would like to yield to Mr. Hare for closing comments.
  Mr. HARE. I would like to thank the gentleman from Washington and my 
friend from Kansas for allowing me to be here tonight to talk about an 
issue that is incredibly important, not just in the State of Kansas, 
although it is important to every State and important to this world. So 
as you said, and I commend my friend, Mr. Inslee, when he said, if we 
have to, and this continues, there is an appropriations process. 
Hopefully we don't have to go

[[Page 13161]]

down that road. But I have to tell you. I think we have a 
responsibility for companies that violate international trade laws. I 
don't think you reward them. I certainly don't think you reward them 
with a $30 billion contract, as I said, to build a plane too big to 
land and not adequate to fuel the aircraft that we need.
  So once again, let me just thank you, Congressman Inslee, for your 
hard work and your leadership on this. To my friend from Kansas, we 
will do everything we can. And you have been wonderful. And the people 
of your State are fortunate to have somebody who stands up not only for 
the service people but for the people of this country. So thank you 
very much.
  Mr. INSLEE. And thank you Mr. Hare. Our thoughts are with your 
flooded constituents in Illinois. We are thinking about them tonight.
  Just a closing comment, where this goes from now, the Air Force is 
required within 60 days to respond to this protest. They will have 60 
days within which to plan their next action in this regard. We know 
what we would like them to do. Following that, if decisions are not 
made as they should be, Congress can act in a variety of ways to make 
sure that this decision is right. And we stand ready, willing and able 
to do so.
  And the longer this goes on, the more our colleagues frankly 
understand that something was not right in this decision and needs to 
be reversed. So as time goes on I think we will get closer.
  Let me also say in criticizing the decision by the U.S. Air Force, I 
hope it goes without saying, we have undying respect for the people who 
serve in the United States Air Force. These are decisions that are hard 
fought, a lot of technical issues. A decision was not made here 
according to Hoyle. But do you know what? We have a process of fixing 
these things. And at the end of the day, the U.S. Air Force is going to 
be something we always admire. And we are going to get them the right 
airplane for the job. We know what that is, and we are going to get 
that job done for them.
  Mrs. BOYDA of Kansas. I would like to thank my good friend from 
Illinois (Mr. Hare). We are freshmen together. And it's at times like 
this that I really am glad to be part of this freshman class and add 
our voices together. We've worked on so many things, whether it's 
trade, so many issues that our districts have a lot in common. And so 
it's actually a pleasure to stand up and work with the good people here 
tonight. And I really appreciate both of you and our friend from Oregon 
(Mr. Blumenauer). So thank you again to you both.

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