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  (Source: Northrop Grumman)

Northrop Grumman/EADS KC-45A tanker  (Source: Northrop Grumman)
Boeing wins the battle, but the war continues with the controversial Air Force tanker program.

It looks like the ongoing battle between Northrop Grumman/EADS and Boeing over the $35B Air Force tanker contract will go on for at least another year. Northrop Grumman/EADS won the KC-X tanker competition earlier this year and it was announced that the Airbus A330-based KC-45 would replace the Air Force's existing fleet of 531 KC-135 tanker aircraft.

With foreign hands having a part in the design and construction of the KC-45, some in Congress weren't too happy with the move. "We should have an American tanker built by an American company with American workers. I can't believe we would create French [and British] jobs in place of Kansas jobs," said Todd Tiahrt, a congressman from Kansas.

Boeing filed a formal protest against the Air Force's decision with the Government Accountability Office (GAO) in March. Boeing contended that it deserved the contract due to numerous errors and concessions made during the competition and noted that it provided "75 years of unmatched experience building tankers" and "offered the Air Force the best value and lowest risk tanker for its mission".

It looks as though Boeing has quite a bit of pull in Washington, because the GAO sided with Boeing’s protest. "Our review of the record led us to conclude that the Air Force had made a number of significant errors that could have affected the outcome of what was a close competition," said the GAO in a statement.

"We recommended that the Air Force reopen discussions ... obtain revised proposals, re-evaluate the revised proposals, and make a new source selection decision, consistent with our decision," the GAO continued.

Further stacking future proceedings in Boeing's favor, the GAO reported that the Air Force performed "unreasonable" cost/performance analysis with regards to the Northrop Grumman/EADS entry versus Boeing's competing entry. Had those errors not have been made; the GAO concluded that Boeing would have been the low-cost champion of the competition, and likely the overall winner.

The Air Force will in essence have to start the competition all over again to satisfy the GAO's requests – in the mean time; the aging KC-135 fleet will still take to the skies. "In theory, the air force has 60 days to answer. But in reality, it's obvious they're going to have to start over," said Lexington Institute military analyst Loren Thompson.

EADS, as expected, wasn't exactly elated with the GAO's decision. "Though we are disappointed, it's important to recognize that the GAO announcement is an evaluation of the selection process, not the merits of the aircraft," said EADA spokesman Louis Gallois.

"We will support our partner Northrop and remain confident that the KC-45 is the aircraft best suited to make the Air Force's critical mission requirements, as demonstrated by four previous competitive selections."

Not surprisingly, Boeing is ecstatic about the ruling. "We welcome and support today's ruling by the GAO fully sustaining the grounds of our protest," said Boeing tanker group VP Mark McGraw. "We look forward to working with the Air Force on next steps in this critical procurement for our warfighters."

Supporters of Boeing's protest in Congress also welcomed the GAO's decision. "The GAO's decision in the tanker protest reveals serious errors in the Air Force's handling of this critically important competition. We now need not only a new full, fair and open competition in compliance with the GAO recommendations, but also a thorough review of -- and accountability for -- the process that produced such a flawed result," said Senator Carl Levin (D-Michigan).

"The GAO did its work, and the Air Force is going to have to go back and do its work more thoroughly," added Representative Ike Skelton (D-Missouri).

You can read the GAO's full report including seven areas in which it found the Air Force's decision to be flawed here.

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Won't Boeing be dissapointed...
By Amiga500 on 6/19/2008 11:43:52 AM , Rating: 1
When the USAF again picks the KC-45 ahead of the 767.

Boeing really need to offer the 777, but as far as I understand it, they are capacity restrained.

RE: Won't Boeing be dissapointed...
By Proteusza on 6/19/2008 12:07:29 PM , Rating: 2
No, I'm sure the USAF will understand what the "correct" decision is.

Go corruption! Yeah. Keep it in the family, as they say.

By Amiga500 on 6/19/2008 1:21:05 PM , Rating: 2
Here is an even better one.

The USAF will now have to extend the (now quite substantial) contracts to keep the archaic KC-135 in the air...

Who benefits from that one?

Oh, shock (and awe) horror... Boeing.

RE: Won't Boeing be dissapointed...
By ElFenix on 6/19/2008 12:41:07 PM , Rating: 2
the 777 is too big. no point flying a bunch of airframe around that's not needed.

RE: Won't Boeing be dissapointed...
By Solandri on 6/19/2008 5:38:21 PM , Rating: 2
That's kind of a non-sequitor, since the primary argument for the A330 seems to be that it's bigger than the 767.

RE: Won't Boeing be dissapointed...
By ElFenix on 6/19/2008 11:42:48 PM , Rating: 2
that doesn't necessarily mean that an even larger aircraft is better. the optimum configuration for the AF may be somewhere between the 767 and A330.

or it could be that the AF doesn't really know what the hell it's asking for, as the GAO report suggests. was it asking for a tanker? was it asking for a cargo plane?

By ikkeman2 on 6/20/2008 2:39:28 AM , Rating: 2
The 777 is (IMHO) the sole contender for the spot to replace the KC-10's. This will be competed in the KC-Z Competition in a decade or so.
This competition (KC-X) and the next (KC-Y, isn't that cute. They know the alphabet) are geared to replacing the KC-135's

RE: Won't Boeing be dissapointed...
By GGT on 6/20/2008 11:10:53 AM , Rating: 2
That's a very real possibility. However, the Air Force will have to stipulate in their requirement's details the basis that will drive that the decision. If a cargo hauler is their goal, which would fly in the face of the role the KC-135R fills now, then the A330 is a good fit.

Of course, Boeing will offer the 777, which is only slightly larger than the A330. The A330 is not really a match for the 777 so now we could be talking about an A340 tanker and the situation is getting a little carried away.

The 777 is a hot product, but for this contract, I have no doubt that Boeing would open another line to build these beasts for the Air Force.

By ikkeman2 on 6/24/2008 5:01:45 AM , Rating: 2
The 777 is indeed a Hot Product, but it's much bigger than the 330. I think Boeing is keeping it in pocket to compete in the the KC-z competition to replace the KC-10's in about a decade. The 777 line will than be closer to closing, and Boeing will have the room to build the AF airframes without having to invest in more capacity.

kc135 MTOW 322,500 lb
B767 MTOW 450,000 lb
A330 MTOW 500,000 lb
B777 MTOW 775,000 lb

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