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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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RE: That's not quite how it works...
By FITCamaro on 6/19/2008 2:15:54 PM , Rating: 2
Airbus's A400 isn't doing any better in terms of delays either.

RE: That's not quite how it works...
By Amiga500 on 6/19/2008 2:18:47 PM , Rating: 2
Very true.

I believe that delay is engine related.

RE: That's not quite how it works...
By aeroengineer1 on 6/19/2008 4:46:58 PM , Rating: 2

While I am impressed at your tenacity in posting about the subject, I think that your emotions about either the posters or the fact that the ruling did come in favor is somewhat causing you to loose credibility.

The basis of your arguments seem to center around the fact that bigger is better. If this was unilaterally true, then Airbus would have offered the A380. Clearly what is at stake here is that the US government offered a contract and set performance terms. It specified that exceeding those performance terms did not merit extra consideration. Basically here is the job that we need done, if you do other things that is not important, we just need this job done. It is not to say that there could be a better method of giving contracts. With this in mind, had the USAF specified they wanted a larger aircraft, with more payload capacity, then a 777 derivative may have, and may still be offered.

Now to some fact checking of your previous statements about the fact that the A330 is beating the B767 in the market place. I think that you need to recheck your numbers here as there are some errors and misinformation. While yes it is currently selling at a faster rate than the B767, the A330 has not been anywhere near as successful. Airbus has currently delivered about 543 aircraft (this number is different by now, but I could not find the most current number, this number is accurate as of May of this year), while Boeing has delivered about 962 aircraft. Before it is said that the B767 is 9 years older, and hence it should have delivered more, we can normalize the numbers to see average annual rates. If we look at that the B767 has some clear advantages. (numbers rounded to nearest whole number)

Airframes delivered average per year: 40
Average orders per year: 34

Airframes delivered average per year: 36
Average orders per year: 44 (though unable to confirm if order number included A340 orders as well)

Time to reach over 543 deliveries
B767: 13 (560)
A330: 15 (543)

When we look at these numbers we can see that the Boeing line we understand that the B767 is being phased out with the B787 about to enter into service. The A330 will see the same fallout here in the next few years as the A350 takes over that product range.

So what does this all mean in relation to the GAO ruling? The GAO found that the USAF decided that it wanted something different later in the bidding process and did not let the other party know. Now that the contract probably will get rebid, it will be interesting to see how the airforce offers the new contract. It is possible that the contract gets split, that Boeing offers a mix of 767 and 777 versions, which should still mean that Airbus still gets the contract.

By Solandri on 6/19/2008 5:33:43 PM , Rating: 2
I looked into those B767 and A330 delivery numbers too. The 767 is an older design based on older technology. At the time it was introduced it did better than the A330 when it was introduced. But in head-to-head competition with the A330 it was indeed beaten hands down. And that's essentially what the USAF is doing here - putting the two in head-to-head competition.

I do wonder though how much of the A330's commercial success is due to technical superiority as Amiga500 claims, and how much is due to it being able to take the larger LD3 cargo containers two-abreast (the 767 can only take LD2s two-abreast, or a single LD3 with lots of waste space). Airlines like to standardize on one size ULD so they can quickly switch it to a different plane, so the larger LD3 is more ubiquitous. However, I would imagine the USAF doesn't really care about LD2 or LD3 capacity on a refueling tanker.

By Amiga500 on 6/19/2008 6:52:27 PM , Rating: 2
Regarding size. As with all things aeronautical, there is a compromise, here it is between bigger aircraft versus more aircraft. There is a happy medium, the B767 is too small, A380 too big.

Or conversely, the A330 has a total of 943 orders (A340 and A330 orders are around 1330), while the B767 (with 8 more years) has a total of 1010... :-)

The A330 is still selling strong (especially the freighter variant) with the A350 just around the corner. With Boeing's Dreamliner woes, the gap between B787 and A350 being introduced is ever shrinking.

Yeap, the USAF did change requirements. I have seen Boeing's press releases at the time that stated they were happy with it. Then they lose and the toys get chucked out of the pram.

I don't believe the contract will be split. There is already KC-Y on the horizon, and the USAF will want to avoid a possible mix of 3 different aircraft (as I mentioned elsewhere, the A330 will still be around for that, 400 a/c still to be delivered not including the USAF deal. The 767 won't be around for that contract - a consideration for the USAF).

By FITCamaro on 6/19/2008 4:49:40 PM , Rating: 2
Well assuming it kept its current pace when I worked on it, the network system that interfaces the entire plane is behind schedule too.

"I modded down, down, down, and the flames went higher." -- Sven Olsen

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