Alabama Aircraft Industries Inc (AAIIQ)

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U.S. rejects part of Pemco protest on tanker support


WASHINGTON, May 5 (Reuters) - The Government Accountability Office said on Monday it had rejected part of a protest by Alabama Aircraft Industries (AAII.O: Quote, Profile, Research), formerly Pemco Aviation, against a renewed Air Force decision to award a $1.2 billion contract for maintenance of KC-135 refueling aircraft to Boeing Co (BA.N: Quote, Profile, Research).

The GAO, the nonpartisan congressional agency that reviews federal contract disputes, said it continued to review the merits of Alabama Aircraft's larger case.

It is due to issue a ruling on that matter by June 19.

Alabama Aircraft, which won its first protest against the Air Force in December, filed a second protest with the GAO in March after the Air Force again awarded the contract to Boeing.

In the decision released on Monday, the GAO rejected a supplemental protest filed by Alabama Aircraft, which argued that the Air Force had significantly increased the number of KC-135 aircraft to be maintained to 36 from 24 a year and that competitors should be allowed to submit updated proposals.

Alabama Aircraft also said the Air Force had changed the required schedule for the maintenance work.

The GAO said it dismissed those issues after the Air Force said the servicing requirement for the number of aircraft remained unchanged, and that no firm decision had yet been made about shortening the maintenance cycle from five to four years.

"Until the agency has made a decision regarding a potential change in contract requirements, a protest based on the protester's anticipation of the agency's subsequent course of action is speculative and premature," the GAO said.

If the Air Force subsequently did make those changes, Alabama Aircraft could resubmit its protest, it said.


The GAO said it did not even consider Alabama Aircraft's claim that Boeing had "advance knowledge" of the proposed Air Force changes, since it was dismissing that part of the protest.

Alabama Aircraft was known as Pemco Aviation Group Inc until January, and the GAO papers refer to Pemco throughout.

The Air Force said in March it had reviewed the source selection materials, as required by the earlier GAO ruling, and concluded once again that Boeing deserved the contract.

In December, the GAO ruled against the Air Force's initial decision to award the contract to Boeing, saying the service had not documented a required analysis about the potential risks of Boeing's final proposal revisions. (Reporting by Andrea Shalal-Esa; Editing by Ted Kerr)