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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 Connoisseur on 8/22/2008 12:14:43 PM , Rating: 2
I believe boeing, in building the Dreamliner, outsourced many of the individual parts (wings, tails, fuselage etc.) to other technologically advanced nations and is assembling the full aircraft in the US. This is based on the fact that some companies (local and foreign) can simply make certain parts faster/better. So no, it's not 100% american. But in the end, the revenue for the full aircraft goes to an american company.

RE: This is getting ridiculous...
By Spuke on 8/22/2008 12:46:18 PM , Rating: 5
But in the end, the revenue for the full aircraft goes to an american company.
So the other contractors are doing it for free?

RE: This is getting ridiculous...
By bohhad on 8/22/2008 2:14:55 PM , Rating: 2
no, the contractors received revenue for their parts, which boeing bought. he's saying boeing then assembles the parts, and receives all the revenue from the sale of the completed plane

By foolsgambit11 on 8/22/2008 6:17:39 PM , Rating: 2
Except that the revenue for many of the workers on the plane. What you seem to be saying is, "It's okay as long as it's an American CEO gets the big paycheck. Screw the assembly line workers whose jobs were outsourced. We'll still call it American made."

Don't get me wrong. I, personally, am all for outsourcing. Each company is responsible to its shareholders for maximizing value. How they do that, within the confines of the law, is their business. I just wanted to point out a common confusion found in your statement. I also support the lifting of all restrictions on the free movement of labor. That way I could follow my job to India, or China, or whatever, if I wanted to.

RE: This is getting ridiculous...
By rudolphna on 8/22/2008 10:25:43 PM , Rating: 2
yes, and they have to do that. Airlines from other countries may be more willing to buy the planes if it provides their countries with jobs.

RE: This is getting ridiculous...
By NYBandits on 8/26/2008 8:47:47 AM , Rating: 2
Other countries would buy our Air Force planes/jets in a second if our government would allow them too (we have very good reasons to restrict the sales). Just look at the recent sales of the P3 internationally.

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