Boeing wins another one

Rico says there's an editorial in The New York Times about the resolution of the new Air Force tanker issue (finally):

The Air Force’s decision to award Boeing the multibillion-dollar contract to replace its fleet of Eisenhower-era KC-135 refueling jets appears to have been based on a fair assessment of costs and capabilities rather than favoritism for the home team over its European rival EADS, the maker of Airbus.
A fair outcome for this decade-long, deeply marred procurement saga is a relief. We hope the Air Force and all of the military services have learned the right lessons; not just about avoiding possible corruption, but also about the need to ensure that every step of the process is transparent to all bidders.
The problems date to 2004, when it was discovered that an Air Force official involved in the tanker bidding was angling for a job at Boeing. Senator John McCain rightly scuttled the Air Force’s plan to lease Boeing jets.
In a second round, the Air Force decided to buy the jets from a consortium made of EADS and Northrop Grumman. Boeing successfully challenged the decision, arguing that EADS had been given extra credit for offering a much larger jet when the original specifications didn’t award points for size. It also charged that the Air Force— perhaps trying to make up for its previous embarrassment— had provided more guidance to Airbus.
The Air Force did a better job the third time. It called for a jet that could meet 372 specifications with no extra points for extra bells and whistles, reducing the space for favoritism or other contestable mistakes. But in its eagerness to protect itself from another challenge, the Air Force was less able to make trade-offs between the cost of the tankers, their performance and capabilities, and the risks that a project of this size entails.
This meant that the competition was decided mostly on price, including the jets’ sticker price plus the cost of operating them. Boeing’s smaller 767, which consumes much less fuel, was the predictable winner. The new specifications so clearly favored a smaller jet that Northrop abandoned the contest, leaving EADS to bid alone.
As budgets are sliced around the globe, competition for military contracts is likely to keep getting fiercer, with losers increasingly challenging the outcomes. To address this risk, the Pentagon could craft procurement contracts with narrow, rigidly refined specifications. Unfortunately, that could discourage future bidders from innovating and aiming to exceed expectations.
A better route would be simply to avoid the kind of dumb mistakes made by the Air Force. All it had to do was avoid conflicts of interest, keep the rules clear and not move the goal posts midway through the game. The military today may be high-tech, but that approach to business has been around for a long time.