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The Air Force tanker drama continues...

The ongoing saga between Northrop Grumman/EADS, Boeing, the Air Force, Congress, and the Government Accountability Office (GAO) continues to languish on in the face of an aging tanker fleet. Northrop Grumman/EADS formally won the contract earlier this year -- the $35B contract would have given the Air Force 179 Airbus A330-based KC-45 aircraft to replace 531 KC-135 tankers.

Boeing filed an official protest of the deal with the GAO in early March and received redemption in mid-June when the GAO agreed that errors were made during the selection process. "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," said the GAO at the time.

It now appears that Boeing isn't quite satisfied with just having the competition reopened -- according to the Wall Street Journal, it now wants more time to design a suitable aircraft to meet the Air Force's needs or it is threatening to walk away from the competition altogether. Boeing now wants an additional six months to submit a proper bid that the Air Force would be willing to accept.

"I think the option we would have if we were not given the six months, there is a really high likelihood that we would no-bid the program," said Boeing defense unit head Jim Albaugh.

The Defense Department is already considering giving both Northrop Grumman/EADS and Boeing two additional months to submit new bids for the competition according to close sources, but Boeing's Albaugh said that is not enough. "This is an airplane that's going to be in the inventory 40 years. What we're asking for is an additional four months to have a meaningful competition."

For Boeing, the request for more time and the threat of a "no-bid" is somewhat of a payback to Northrop Grumman/EADS which performed a similar feat back in 2007. The maneuvering by Northrop Grumman/EADS forced the Air Force to make some changes to the requirements for the competition that put Boeing's entry at a disadvantage.

Boeing's current proposal is based around a 767-200 airframe -- it is simply too small and doesn't meet the fuel capacity requirements of the Air Force. Albaugh acknowledges that without the extra time to bid a larger version of the 767-200, it will lose the contract.

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RE: This is getting ridiculous...
By JasonMick on 8/22/2008 11:49:52 AM , Rating: 5
Well an old fact of life is that sometimes the squeaky wheel gets the grease (unfortunately).

RE: This is getting ridiculous...
By Solandri on 8/22/2008 2:51:43 PM , Rating: 5
From what I read in the GAO report, what happened is: Air Force gave some performance requirements the plane had to meet. Boeing asked if they would be given credit for exceeding some of those requirements (size, range). Air Force said no. Boeing submitted a bid which met those requirements. EADS submitted a bid which exceeded those requirements. Air Force awarded the contract to EADS partially based on it exceeding the requirements of size/range, factors it had told Boeing would not affect the decision.

Boeing cried foul. GAO reviewed the process and told the Air Force you can't do that. Do it again and do it right this time. Air Force gave both competitors new requirements, but now these requirements are for a larger plane with more range. EADS bid already matches the new requirements. Boeing plane does not. Boeing (understandably) asks for more time to redesign its plane to match new requirements.

Anyhow, I don't believe the Air Force is allowed to award a contract without at least two bidders. So Boeing is going to get the time it wants. EADS did the same thing (threatening to withdraw its bid) during the first bid. It's just the way these things work. Wasteful perhaps, but I would rather the decision be made based on the best design each bidder can put forth, not based on some half-assed design rushed to meet an arbitrary deadline. So in this case I think oiling the squeaking wheels is going to result in a better outcome for the Air Force.

RE: This is getting ridiculous...
By mezman on 8/22/2008 5:02:13 PM , Rating: 1
That's exactly right. The Air Force decided on it's selection criteria during the pre-award survey and then didn't follow it's own criteria and selected NG/EADS by giving credit for exceeding the requirements when the USAF said it wasn't gonna. It's good that Boeing is getting a second, fair, shot I think.

RE: This is getting ridiculous...
By FITCamaro on 8/22/08, Rating: -1
RE: This is getting ridiculous...
By Screwballl on 8/23/2008 11:09:28 AM , Rating: 2
This is something that affects me locally... we have Eglin AFB, Tyndall, Pensacola NAS (in Florida) and Mobile, AL within range that will be dealing with much of the work as long as EADS gets the bid. There are a lot of civilian and military contractors here, and each one of them that were familiar with this situation stated pretty much that same thing:
Boeing cannot come up with a qualifying product without severely going over the proposed budget AND outsourcing a majority of the work outside of the US. Boeing submitted a design that was based on the bare requirements only. EADS chose to go above and beyond and submitted a better design and won the contract. The original contract was awarded properly but this is just a case of Boeing being a big baby and delaying the inevitable.

Let Boeing handle the commercial sector and EADS/Northrup/Grumman to the military. The military can award a bid for only one bidder if there have been previous bids that did not meet the current requirements, such as in this case. They gave Boeing several months and if they cannot comply or come up with a design within the requirements, then they lose the bid, even with a "no-bid".

In this case, oiling the squeaky wheel will not help, the tire is flat.

RE: This is getting ridiculous...
By Solandri on 8/24/2008 12:35:22 PM , Rating: 2
The original contract was awarded properly but this is just a case of Boeing being a big baby and delaying the inevitable.

Of all the government branches, the GAO has been the most reliable and unbiased in my experience. If they say something was done properly or improperly, they're usually right.

Let Boeing handle the commercial sector and EADS/Northrup/Grumman to the military.

Boeing is usually the Department of Defense's #2 contractor in terms of dollars awarded (Northrop-Grumman is usually #3).

I do appreciate that you gave disclaimers for your stance. If I do the same: I have no connection to any of this. I interned for Lockheed while in undergraduate school, and I did some contract work on simulators for the USAF at a previous job.

RE: This is getting ridiculous...
By EarthsDM on 8/22/2008 3:17:39 PM , Rating: 4
Well an old fact of life is that sometimes the squeaky wheel gets the grease (unfortunately).

Sometimes the squeaky wheel gets replaced.

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