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Aug. 9, 2010—The Defense Department is standing, for now, by its timetable to award the KC-X tanker contract later this year, despite the legal protest filed last week by US Aerospace that threatens to derail the process.

"We will award this contract in the fall, as we always said we would," said Geoff Morrell, Pentagon spokesman, when discussing the company's protest during a press briefing last week. "In the fall" is believed to be DOD's way of saying after the mid-term Congressional elections on Nov. 2.

Morrell's comments came three days after US Aerospace, an industry newcomer based in southern California, lodged its protest with the Government Accountability Office against the Air Force. The company acted after USAF officials declared the company's KC-X bid ineligible for arriving at Wright-Patterson AFB, Ohio, near Dayton, five minutes after the 2:00 p.m. (East Coast time) filing deadline on July 9. Wright-Patt is home to the KC-X program office.

The company disputes this, saying its courier was at the base in time and that a late handover—if one actually occurred—was the Air Force's fault, not its. Further, the company goes so far as to accuse some Air Force officials of intentionally derailing its bid due to lingering Cold War-era bias. That's because US Aerospace is teamed with Ukrain’s state-owned aerospace giant Antonov on KC-X. They are offering the Antonov AN-112 tanker design.

Morrell called such accusations of bias "absolutely absurd" during his briefing. Rather, he asserted, this issue is simply a case of DOD adhering to federal acquisition laws that strictly prohibit the Air Force from considering late bids.

GAO has until Nov. 10 to rule. If GAO sides with US Aerospace, the Air Force may have to consider the company's bid after all, which likely would eat up some time and potentially push back announcement of the contract award.

So what happened that fateful day? Charles Arnold, senior advisor to US Aerospace's board of directors, claims that the company's bid was "clearly" in the government's possession by 1:30 p.m. when the company's courier arrived at the Wright-Patt gate.

However, Arnold told the Daily Report in an interview Aug. 5, Air Force personnel initially denied the courier entry to the base and later provided incorrect directions to the drop-off location. Once the carrier did arrive at the proper building for the handover, he was told to wait for Air Force personnel to come meet him.

"He at all times complied with the instructions of Air Force personnel, from the time he arrived at the installation until the proposal was taken by Air Force personnel at the program building," said Arnold of the courier.

Arnold maintains that the company's bid was under Air Force control before the 2:00 p.m. deadline, even though it was time stamped as having been received at 2:05 p.m.

The Pentagon sees it differently. "This is a $30 to $40 billion contract. This is not a high school homework assignment, Okay? These deadlines count, and any professional contractor understands that," Morrell said during the briefing.

The two other KC-X hopefuls—Boeing and EADS North America—went to "great measures" to make sure their bids were in on time, Morrell explained. EADS not only flew its bid to Dayton the day before, but also drove a second copy to the Wright-Patt in case poor weather delayed the aircraft or "God forbid, there had been a plane crash," he said.

And Boeing delivered its bid by 9:00 a.m. July 9—five hours before the deadline, Morrell noted.

Federal competitive acquisition laws do state that companies are responsible for submitting proposals by the time specified in the solicitation.However, "late" proposals may be accepted if "there is acceptable evidence to establish that it was received at the government installation designated for receipt of offers and was under the government's control prior to the time set for receipt of offers," according to the text of the federal statute.

(Morrell briefing transcript)