In news guaranteed to increase sales of Bud Light and tequila across Everett this evening, the Government Accounting Office has upheld Boeing's protest of a Pentagon decision to buy $35 billion worth of Airbus tankers.

This caught a lot of people off guard. As I noted recently, most of the 767 people I know thought that Boeing's protest - while just - was doomed to failure. Scuttlebutt was that many of the key tanker program managers in Everett have already been re-assigned to work on other jets.

Down in Alabama, the EADS and Northrop Grumman folks were planning a groundbreaking ceremony for their new KC-30 factory for next weekend. And most inside-the-Beltway pundits figured that auditors would find a few minor problems but let them slide.

Boy were we all wrong.

The full GAO report isn't available yet, but the executive summary is pretty damning, finding that the Air Force made seven pretty significant errors along the way to awarding EADS and Northrop the contract for the first 179 tankers. A lot of it's written in government-speak, and some of the details have been hidden to protect information the two bidders deem to be proprietary, but I'll try to translate:

1) The Air Force didn't follow its own rules for evaluating the strengths and weaknesses of the two proposals. (Not a good start.)

2) In one specific case, which ended up being important to the final outcome, the Air Force again failed to follow its own evaluation processes by giving the EADS/Northrop tanker extra points for going beyond the minimum requirements - even though the rules didn't allow for giving anyone extra credit. (Oops.)

3) The Air Force never really showed evidence that the EADS/Northrop plane was actually capable of refueling all the Air Force's planes. (Which, I don't know, seems a pretty important point.)

4) The Air Force, and we'll quote from the report here, "conducted misleading and unequal discussions with Boeing," telling the company that it had "fully satisfied" a key requirement, but later decided that Boeing had only partially met it after all. It didn't tell Boeing it had changed its mind - but it did tell EADS/Northrop and talked with them about how they could meet the new criteria. 

(Boeing, you may recall, screamed loudly when the Pentagon said a major reason it picked the EADS/Northrop tanker was because it was bigger than the Boeing plane. Boeing had offered to build a larger model - based on its brand-new 777 freighter - but the Air Force told it not to bother, because it liked the smaller 767. I suspect this finding has to do with that issue.)

5) The Air Force improperly downplayed the fact that EADS/Northrop had refused to agree to meet specific requirements relating to establishing a maintenance program for its tankers - calling it a simple "administrative oversight" - even though the maintenance program was a specific requirement of the bid. (Apparently their dog ate their maintenance plan.)

6) The Air Force made a number of mistakes computing the "life cycle costs" of the relative planes - that is, the cost of operating and maintaining them over their expected years in the fleet. The Air Force awarded the contract to EADS/Northrop in part because it calculated that its planes would have lower costs, but once it went back and corrected all its mistakes, it turned out the Boeing planes were better values. (Use Excel next time!)

7) Finally, the Air Force seemed to arbitrarily add on additional dollars to Boeing's estimates of one-time engineering costs connected to its tanker bid, because it didn't understand how Boeing had come up with a number it thought was too low. (Hmm ... )

The GAO wants a do-over. "We recommended that the Air Force reopen discussions with the (bidders), obtain revised proposals, re-evaluate the revised proposals, and make a new source selection decision, consistent with our decision," the agency reports.

The Air Force could ignore that recommendation, but it's far more likely to go along with it, go-to analyst Richard Aboulafia and tanker guru Loren Thompson are telling the national media this afternoon. That probably means we're in for yet another year of political posturing from the various factions - the pro-Boeing crowd here and the pro-Airbus crowd in Alabama. In fact, the Buy-American contingent already is calling on the Pentagon to just go ahead and award the contract to Boeing already.

"If the Air Force doesn't get it right, I'm going to reserve all my options as a member of the (House) Appropriations Committee to offer amendments and do anything I can to stop this thing from going forward," said my brother's Congressman, Rep. Norm Dicks, D-Sunset Beach.

And don't forget the potential ramifications for presidential politics - John McCain has been a loud public critic of Boeing's tanker bid, while his aides have been persistent behind-the-scenes supporters of the Airbus effort. Democrats were quick to put out a statement this afternoon attacking McCain for the way he, according to them, "intervened at key steps in the process, echoing the arguments of the EADS/Airbus consortium each time."