KC-767A Tanker Program
Report No. OIG-2003-171
Boeing wanted to get in on the economic fuel Cash which Congress was spreading around in 2001, and offered a lucrative job to a current Assistant Secretary for Air Force Acquisition, in order to get in on the Cash Cow benefits in the Y2002 Budget. The currently-deployed Tanker force (KC-135s) were not nearing their Life expectancy (41 years), and actually Maintenance Costs of the current fleet were exaggerated. Boeing and the Air Force Assistant Secretary came up with a Lease Agreement, which would pay Boeing a fortune yearly for little Up-front provision. The full complement of 100 KC-767A Tankers were not to be provided until after 10 years, with Lease rates set to pay for the Aircraft as they were built according to a Boeing schedule. The CBO quickly notes that regular Acquisition policies were not followed in the Request procedure included in the Y2002 Budget, that the Military was not satisfied with the military capability of the aircraft, and that purchase of the aircraft would be much cheaper than leasing the craft.
The real Scandal is not that it happened, but that the Appropriation made it into the Y2002 Budget, even though it required the evasion of standard Defense acquisition policy at numerous levels. This evasion could only come through active intervention of senior-level Management through multiple levels. The real Crime committed comes in that senior officials at Defense, Congress, and White House have retarded the Investigation into Wrong-Doing, suppressing News coverage of the Scandal, and intends to let the Incident pass without any criminal Indictments.
PGL quotes a Washington Post article at Angry Bear about the Lease deal, which will provide much greater insight. It gives some detail on the inefficiency of the commercial aircraft for military use, and describes how Boeing intended to have its Cake, and eat it too. lgl