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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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why back out of bidding
By Enkur on 8/22/2008 11:59:15 AM , Rating: 2
what I dont understand is what is the problem with Boeing backing out of bidding altogether if they dont get the time. Then by default Northrop Grumman wins the contract anyway which they originally had in the first place. Am I missing something?

RE: why back out of bidding
By masher2 on 8/22/2008 12:55:24 PM , Rating: 2
Remember that Northrup/EADS was only brought in originally because the government was (rightly) leery about awarding such a huge contract without at least some degree of competition.

If Boeing pulls out, they're right back where they started.

RE: why back out of bidding
By GGT on 8/22/2008 2:53:06 PM , Rating: 2
There actually isn't a problem with Boeing backing out. More likely than not, if Boeing backs out, the Congress will step in. Northrop/EADS will win and get exactly $0 on the contract. Such is the power of Congress and such is the power of politics. Boeing proved its point with the GAO victory and it is very unlikely Congress will just stand by and give over the money.

RE: why back out of bidding
By mmatis on 8/23/2008 6:59:23 AM , Rating: 2
The government REALLY likes to have at least two potential sources. If they only have one, and if another potential source backs out for a valid reason (like Uncle changing the Statement of Work to specifically favor one of the bidders who already submitted in a successfully disputed contracting effort, and then failing to give the other potential bidder adequate time to revise their bid to meet the new SOW), the government regulatory types tend to give the agency hell. Not that there could even REMOTELY be any reason to give them hell, of course. I mean, just because the agency was found to have failed to act properly in the first procurement effort is no reason to look carefully at their most recent activity. Why verify? They say she's 16, and why would they ever lie about it? Bet there's a bunch of guys in prison who wish they could have had the IOC run their trials.

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