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Posted at 4:56 PM ET, 11/22/2010

EADS' Sean O'Keefe says Air Force bid leak won't affect contest with Boeing to build tanker

By Dana Hedgpeth

The head of the European Aeronautic Defence and Space Co. in North America said he doesn't believe Friday's incident in which the U.S. Air Force said it mistakenly provided EADS and rival Boeing of Chicago with sensitive information about each other's confidential bids, will harm the competition to build the service a new aerial refueling tanker.

The competition to the Air Force's KC-135 refueling tankers has been going on since 2003. The Pentagon rebid the deal, and this most recent round has triggered an intense fight between Boeing, the major U.S. aircraft maker, and EADS, the European aircraft company. The initial deal is expected to be worth $40 billion and could be worth up to $100 billion if the Air Force replaces its entire fleet of aircraft tankers.

"They [the Air Force] responded to it promptly, and all the information was recalled," EADS chief executive Sean O'Keefe said Monday at a luncheon with journalists at the National Press Club.

O'Keefe said the tanker competition so far has been the "most above-board, fair, competitive process" that he's been involved with.

The Air Force has "offered an assessment, and they say it is not a compromising event," he said. "They believe neither competitor has a superior understanding of what the other's offer would be.

"They've been very, very straightforward," he said of Air Force officials. "It was a human error. ... We give them the benefit of the doubt. We'll trust that. If the past is a prologue, they've been very forthcoming."

Would EADS protest a decision for Boeing?

"We'll see what happens," O'Keefe said.

The Pentagon said it had expected to pick a winner before the end of the year, but it is now likely that a decision won't be made until next year.

For O'Keefe served as administrator of the National Aeronautics and Space Administration (NASA), as a Navy secretary, and as comptroller and chief financial officer of the Pentagon. It was his first media luncheon since returning to work three weeks ago after he was severely injured this summer in an airplane crash that killed Sen. Ted Stevens of Alaska.

With a neck brace sticking out from under his yellow dress shirt, blue V-neck sweater and blazer, O'Keefe reflected on his recovery. He joked about growing beard, which a friend said make him resemble Robert E. Lee. But he was also somber about his ordeal.

"You're listening to the luckiest person you've ever meet," he said. "Every doctor says I should not be sitting here. I take every day as if it is a bonus."

On budget cuts, O'Keefe said he believes the Defense Department's roughly $700 billion annual budget is sustainable if cuts in other areas such as "entitlement efforts" like Medicare are also considered. He said studies show the Pentagon can "sustain" its spending "very effectively" if other areas that include benefits are cut. But he said he recognizes that discussing those kinds of benefits cuts is a sore spot.

"If ever you had to pick a moment to say there's got to be a trade-off, we might just be at that edge," he said.

By Dana Hedgpeth  | November 22, 2010; 4:56 PM ET
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Patty Murray and her (Boeing) Wash. D.C. cronies are the ones here that need to be looked at for any illegalities with the awarding of the new tanker contract. Murray (D-Wash) and her Chicago-based Boeing (new HQ) buddies along with the Boeing manufacturing operations in her home state of Washington have lied, cheated and stole whatever information they could on the new tanker proposals. Boeing has several sub-contractors on their 767 payroll from foreign counties, including China, who are subsidized by their own governments. EADS should get out now because the "Chicago" fix is in! Where are AG Holder and the DOJ when you really need them?!?

Posted by: grumbie510 | November 23, 2010 7:19 AM | Report abuse

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