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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 masher2 (blog) on 6/19/2008 2:34:40 PM , Rating: 5
> "As long as the aircraft works I would rather have the $35+ Billion stay in the U.S. economy"

First of all, the Boeing proposal is only slightly "more American" than Northrop-Grummond's. Second of all, in matters of defense, you want the best capabilities you can get. Our present tankers "just work". If that's the metric we're going to use, why ever replace anything? Hell, we could save a bundle if our fighter pilots were still flying P-51 Mustangs.

The fact remains that Northrop's offering carries 50% more fuel, and does so on a platform that is cheaper and more maintainable. That translates into more fuel delivered on the spot, a critical need in a wartime situation where lives are at stake.


By 1078feba on 6/19/2008 3:40:02 PM , Rating: 4
I have to admit, I'm a little torn about the "Buy American" argument.

As a 2ndLt Air Frames Officer at the I-Level, I was in charge of making sure that a bunch of squadrons of F-18's had enough MLG shock absorbers. The supply system was in very short supply due to the number that had been deemed to far gone to fix at our level (too technically demanding), and thus had to be sent elsewhere. After months of this, I find out the reason why...

The original contract, back when the first Hornets were rolling off the assembly line, to build the MLG absorbers went to a French company. They went belly up. It then went to an Israeli firm, which was having a significant amount of trouble with the technical details within the French design specs and drawings (never understood that, but that was the reason givien). It then went to a third foreign firm, who eventually managed to meet demand. But all of this took place over a period of 18 months. I can't tell you the number of man-hours used for cannibalization of those absorbers. How ridiculously tenderly we had to treat them. And this is obviously a war-fighting machine. We use them primarily to support the grunt on the ground. Ask any grunt how wonderfull the sound of jet engines are when they are in really deep shit. And here we are, contracting, for what I surmise was probably purely political reasons, parts production of a national defense asset out to a foreign company.

How smart is that?

The logical side of me is all for laissez-faire world economics, but in some situations, I wonder if we have our priorities straight.


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