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Originally published Friday, November 19, 2010 at 2:15 PM

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Air Force mixes up refueling-tanker bid information

The Air Force informed members of Congress on Friday that about two weeks ago it accidentally provided Boeing with detailed data on the Airbus bid, and vice versa.

Seattle Times aerospace reporter

Boeing bid at a glance

Contract: 179 planes in first phase.

Boeing's entry: Based on 767; details undisclosed.

Employment: 2,000 direct jobs in Everett, 6,000 support jobs statewide.

Assembly: Contract would keep Everett's 767 line running until at least 2027.

Source: Boeing

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The Air Force has stumbled again in the long drawn-out competition in which Boeing and Airbus are battling for a $40 billion air-refueling tanker contract.

About two weeks ago, due to a "clerical error," the Air Force provided Boeing with detailed data on the Airbus bid — and gave the corresponding Boeing data to Airbus parent company EADS.

Col. Les Kodlick, Air Force spokesman, said it was "unfortunate, a clerical error" but that the mistake "basically leveled the playing field, providing each offerer with the same information."

The data includes crucial pricing information on each bid; knowing the other side's bid could allow either contender to adjust its own price accordingly.

But Kodlick insisted the incident would not delay the award of the contract.

U.S. Sen. Maria Cantwell, who was briefed Friday, called the mistake "an inexcusable mishandling by the Air Force of very sensitive, proprietary data relating to the tanker competition."

"The sensitive data inadvertently shared with the two competing companies is important not only for this contract award, but for potential foreign military sales," she said.

However, it's unclear how damaging the glitch is at this stage of the competition and how the data disclosure might affect the outcome. The bid information was provided to the two manufacturers on computer disks, and the Air Force doesn't know for sure "whether either party has viewed the other party's detailed data," said Cantwell spokesman John Diamond.

Both Boeing and Airbus "immediately realized the error and contacted the Air Force," said Kodlick. "They did absolutely the right thing, professional and responsible."

The data switch happened after the Air Force took the detailed specifications of the two jets and ran them through a software program that models how the aircraft will perform in a variety of real-world tanker missions.

Analyst Scott Hamilton said that after that evaluation, the rules allow for a "Final Proposal Revision" (FPR). At that point, EADS and Boeing can make their best and final offers, including adjusting the price.

"If either company looked at the other's pricing, this FPR provides each with the opportunity to out-price the other with proprietary knowledge," Hamilton said. "This could have serious ramifications."

The tanker competition was originally expected to have been decided this month, but Kodlick said the award has already slipped into "early next year" because of "other aspects of the source selection that have taken longer than anticipated."

However, he said the latest glitch won't push the schedule out any further. Cantwell expressed concern about any further delays.

"My hope is that since the Boeing and Airbus bids are already in, the damage caused by this mistake will prove manageable and will not delay a decision by the U.S. military on this vitally important defense program," Cantwell said.

But another potential derailment is that the data disclosures could provide the losing bidder with grounds for an appeal.

"That would be up to the bidders," said Kodlick.

Both Boeing and EADS declined to comment Friday, referring all questions to the Air Force.

Dominic Gates: 206-464-2963 or dgates@seattletimes.com

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