Sen. Johnny Isakson

Rep. Jack Kingston

Georgia lawmakers said a contract to replace the Air Force’s aerial refueling fleet that revived concerns about foreign manufacturing of U.S. defense equipment is likely to pass a legislative review prompted by controversy over how the military branch chooses its suppliers.

The Air Force awarded a contract worth up to $100 billion over the next 30 years to Los Angeles-based Northrop Grumman Corp., over Chicago-based manufacturer Boeing Co.

Northrop Grumman partners with Schiphol-Rijk, Netherlands-based manufacturing group European Aeronautic Defense and Space N.V., or EADS, and critics of the deal say that the trans-Atlantic cooperation will divert job growth from the U.S. during an economic downturn. 

As the deal heads for further federal review, Georgia lawmakers involved with the process said that it is possible the selection process was flawed, but they doubt the deal will be overturned.

Rep. Jack Kingston, a Savannah Republican on the House of Representatives defense appropriations subcommittee, which held hearings on the deal March 5, told GlobalAtlanta that the contract will likely not be torpedoed by the committee because public outcry is not overwhelmingly against it.

“The defense committee could not overturn the decision but we could de-fund it, and that would effectively kill the contract,” he said.  “I don’t think the defense committee is moving in that direction.”

Mr. Kingston added that Northrop Grumman plans to source 42 percent of the manufacturing to Toulouse, France-based EADS member company Airbus S.A.S., but that it is common practice for defense contracts to include foreign-made components.

“In this age of globalization, just about every major defense contract has some part that’s made outside the U.S.,” he said, adding that the majority 58 percent of the manufacturing would be done domestically.

A March 11 release from Northrop Grumman says that up to 48,000 jobs are to be created by the deal, which will be dispersed between its Mobile, Ala., facility and others to be built in West Virginia as the project progresses.

There is evidence that the Air Force changed its criteria for the tankers to favor Northrop Grumman over longtime aircraft manufacturing powerhouse Boeing, prompting a review by the U.S. Government Accountability Office, which Mr. Kingston said will continue until June.

Speaking at Emory University in Atlanta March 25, Georgia Sen. Johnny Isakson said that during the bidding process for the contract “there were a couple of glitches that gave Northrop an advantage.”

Boeing fired the latest salvo in the controversy March 26, taking out full-page advertisements in several U.S. newspapers including the New York Times and Washington Post attacking the Air Force selection process.

The company’s formal protest issued to the accountability office March 11 says that the Air Force changed the required size and software systems for the new tanker without informing the company’s designers.

Mr. Kingston said that there had been changes made, but that they did not make the bidding process less competitive.

“It wasn’t completely apples to apples because there were some changes made, but it was all aboveboard,” he said.

Mr. Kingston also said that, due to memorandums of understanding signed between the U.S. Department of Defense and a number of U.S. allies including France, defense products manufactured there are granted “Made in America” status, allowing them to bypass laws meant to favor American companies.

Chris Isleib, a spokesman for the Defense Department, said that the military has signed these memorandums with 21 nations to bypass the Buy American Act, which imposes fees on government contracts not awarded to U.S.-based manufacturers.

Mr. Kingston said that if any policy change were to come out of the refueling fleet controversy, it could concern these memorandums.

“Maybe we need to change it so when the Defense Department makes an important decision they consider its impact on the American base and expertise,” he said.  “To compete globally we need to keep a good domestic industrial base, and right now the Air Force doesn’t have to take that into account when making a decision.”

The refueling fleet contract became a Congressional matter March 5 when defense subcommittee chair Rep. John Murtha, a Pennsylvania Democrat, issued a statement demanding an explanation as to why the Air Force would award such a large contract to a foreign company, especially in a time of U.S. economic uncertainty.

“When I look at our banks being bailed out by foreign countries … a rising trade deficit with China and the rest of the world and … our Treasury and other U.S. agencies (owing) China $922 billion in debt, I think it’s imperative that the Air Force explain to this committee its decision to award a major U.S. weapons system to a foreign company,” he said.

Mr. Kingston said that the contract will be allowed to pass because it is not eliciting the level of public outcry that accompanied the February 2006 proposal by Dubai, United Arab Emirates-based Dubai Ports World to buy the operating rights to six U.S. ports from London-based Peninsular and Oriental Steam Navigation Co.

Opponents of that deal feared U.S. security would be undermined if the government-owned U.A.E. company was allowed the purchase. A special Congressional committee voted to block the sale 62-2.