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Boeing Wants Answers on Air Force Tanker-Data Error

Dec. 1 (Bloomberg) -- Boeing Co. asked the U.S. Air Force for details on how data on its bid to build an aerial refueling tanker was handled by competitor European Aeronautic Defence & Space Co., after the military mistakenly sent information from each company to its rival.

“We are not sure how much our data may have been exposed,” Dennis Muilenburg, chief of Boeing’s Defense, Space and Security unit, said in an interview today at Bloomberg’s New York headquarters. “We just have some unanswered questions, and we have asked the Air Force those questions and until we get a response, we keep our options open.” He declined to specify the options.

The Air Force disclosed Nov. 19 that it mistakenly provided Chicago-based Boeing and EADS with “a limited amount” of data on the other’s offer proposal for the $35 billion tanker program. Those bids are now under government review. The single page of data released included combat-mission analysis, not price information, the Air Force said last week.

Boeing and EADS, which has headquarters in Paris and Munich, are vying for a contract to replace 179 of the Pentagon’s fleet of more than 500 KC-135 tankers. The jets are pivotal because the U.S. military depends on in-flight refueling to extend the range of combat and transport planes.

Boeing should address its questions to the program office that’s handling the tanker competition, David Van Buren, assistant secretary of the Air Force for acquisition, said today in an interview in New York.

Program Office

“If either one of the parties had any discussion items, then it’s appropriate for them to go to the program office,” Van Buren said. “I have confidence” in the program office.

Boeing’s team didn’t open the Air Force e-mail containing the data after noticing that the file name mentioned the EADS airplane, Muilenburg said.

Boeing doesn’t know how EADS responded, he said.

“As we said, and the Air Force has affirmed, the moment we knew we had the data in error, we secured it and contacted the Air Force,” Guy Hicks, a spokesman for EADS, said in a phone interview. “The Air Force has validated that fact.”

The Air Force said on Nov. 19 that it would delay picking a contest winner until early 2011.

Asked about the relative value of the tanker program in the context of Boeing’s defense portfolio, Muilenberg said the program is “a high priority for our Air Force customers and we’ve been leaning forward on that front but in terms of our overall business base, it’s not a needlemover for us.”

“It’s important to us but it’s not something we are dependent on,” Muilenberg said.

To contact the reporters on this story: Gopal Ratnam in Washington at gratnam1@bloomberg.net; Tony Capaccio in Washington at acapaccio@bloomberg.net.

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net

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