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Subject: Boeing wins KC-X tanker contract.
heraldabc    2/25/2011 4:19:55 AM
http://www.airforcetimes.com/news/2011/02/defense-boeing-win-tanker-contract-022411/ Boeing wins KC-X tanker battle By Dave Majumdar - Staff writer Posted : Thursday Feb 24, 2011 17:13:42 EST Boeing has won the long-running battle to supply the U.S. Air Force with a new aerial refueling tanker, the service announced today. The initial contract was a fixed-price incentive firm contract valued at over $3.5 billion for KC-X engineering and manufacturing development and the delivery of 18 aircraft, dubbed KC-46As, by 2017. The Air Force will eventually spend an estimated $35 billion to buy 179 planes. Based on the modern Boeing 767 twin-engine widebody airliner, the new tankers will replace many Eisenhower-era KC-135 aircraft, based on the Boeing 707. Deputy Defense Secretary William Lynn, along with DoD acquisition executive Ashton Carter, Air Force Secretary Michael Donley and Chief of Staff Gen. Norton Schwartz made the announcement during a briefing at the Pentagon this evening. In a Feb. 24 statement, the chairman and ranking member of the House Armed Services Committee vowed ?to continue the necessary oversight to ensure the evaluation was transparent and fair to each competitor.? ?We look forward to receiving more information from the Air Force as we review their decision-making processes. The Seapower and Projection Forces Subcommittee will hold a hearing on this issue as soon as enough information is publicly available,? said the statement by Reps. Howard P. ?Buck? McKeon, R-Calif., and Adam Smith, D-Wash. ?A Boeing victory means that the company retains a 50-year franchise in being the sole supplier of aerial refueling tankers to the U.S. Air Force. It?s worth tens of billions of dollars to the company and it also assures the commercial arm of EADS will not start building airliners in North America,? said Loren Thompson of the Lexington Institute. He said that Boeing?s victory caught most observers off guard; an EADS victory seemed all but certain. ?The Boeing victory suggests that the Air Force was concerned about the higher cost of building and then operating an A330, which burns a ton more fuel per flight hour than the Boeing aircraft,? he said. Thompson said service officials did not consider the industrial base when making their selection. ?This is purely about the price and performance of the competing aircraft,? he said. The program is likely to be the largest award during the Obama Administration, and a source of steady work for decades. If EADS decides to protest, the European firm may have the upper hand in a political battle, thanks to Republican control of the House of Representatives and their increased presence in the Senate, said Richard Aboulafia, an analyst at the Teal Group, Fairfax, Va. By contrast, Boeing?s political power seems to be waning. Still, he said, a lengthy battle is all but unavoidable. EADS sees the tanker contract as crucial for breaking into the U.S. military market, Aboulafia said. Despite EADS? participation, the tanker contract does not signal that the United States is necessarily more open to foreign companies acting as prime contractors for large military contracts. ?I don?t think this tells you much about the future access of foreign companies to the U.S. market,? Thompson said. ?This is a one-shot deal.? The analyst said there were unique factors surrounding the tanker contract. Because the Air Force wanted a competition, industry sources said, EADS received a number of waivers for several ?key performance parameters,? including the ability to take off from 7,000-foot runways, fitting into existing hangars, and refueling all types of Air Force aircraft ? it reportedly cannot pass fuel to Air Force V-22s. As well, the sources said, the contractor will not be required to integrate government-furnished classified hardware. EADS and Boeing have been battling over the tanker for nearly a decade. In the early 2000s, the Air Force tried to lease 767-based tankers from Boeing under a sole-source contract, then tried to appease critics by switching to a plan to buy 80 aircraft and lease 20. But opposition to the plan, led by U.S. Senator John McCain (R-Ariz.), torpedoed the deal in November 2003. The tanker contract was further marred with the revelation that a senior Air Force contracting official named Darleen Druyun had steered contracts at inflated prices to Boeing in exchange for employment for herself and family members. The contract was formally ended in January 2006. In January 2007, the Air Force launched the KC-X tanker competition, drawing bids from Boeing and archrival EADS, which partnered with Northrop Grumman. In February 2008, the Northrop-EADS team won the contract with their Airbus A330-based aircraft. The following month, however, Boeing protested, claiming the Air Force failed to evaluate the two proposals using the published criteria. That June, the Government Accountability O
 
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doggtag       2/25/2011 8:05:56 AM
.....
And that ends this chapter of a twenty year battle.

Round 5 coming up. It ain't over yet.

H.


Maybe a few politicos finally realized this is the only to finally get Boeing to STFU.
(and proof that, if you cry enough to the right gub/mint folks, you can eventually get your way. http://www.strategypage.com/CuteSoft_Client/CuteEditor/Images/emsmilep.gif" align="absMiddle" border="0" alt="" />  )
 
When all is said and done,
in the long run,
it probably would've favored the US to have done a split-buy of both tanker designs, at a slightly lower production rate,
but over a much longer period, to replacve both the KC-135s and KC-10s,
and by the time the final KC-10s are out of service and the first KC-X production batches are near the end of their useful lives, both lines will still be open for new-build replacements, rather than choking us on another contract competition.
 
The incentive here would be,
each gets a set minimum number to build in each awarded production block,
and the company that meets all production requirements (time, cost, reliability, etc) moreso than the other competitor, gets a higher production number for the next batch, and the loser gets fewer, giving the loser the opportunity to then devote more of their effort into overcoming their deficiencies (it encourages a performance-based system, and doesn't award failure)....
Now stretch that out over a longer period, and it's a win-win for a lot more people: more long-term career opportunities for the aviation sector, decent high-wage jobs that help shore up a strong tax base necessary to fund a on-the-highway-to-bankruptcy pissed-up US buget system (we sure as hell won't get the ecomony improved by allowing the outsourcing of more and more high-tech jobs for subcontracted components...).
 
Otherwise, judging by this program's performance,
this will be the last tanker aircraft the US will ever buy.
 
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doggtag    (sheesh...)   2/25/2011 8:08:16 AM
Christ-a-mighty I can't spell for sh*t yet today....typo city.
 
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heraldabc       2/25/2011 9:11:12 AM
Welcome to my corner of the woods as regards typos.
 
Seriously with democrats and labor unions, did you think NG and the right-to-work states had a chance here, Doggtag?
 
This is not capability. If it was, there would be a fly-off and it would be done.
 
This is politics, so expect lawyers. 

Never mind that the under-built Airbus A-330 is a flying maintenance nightmare, still full of unknown design faults that will bite its users in the ass as it ages. The 767 has crashed just enough so that we have a good idea of what the new tanker has to be designed to overcome. Besides, the next AWACs supplement may be another 767 derivative the way things follow from this debacle.     
 
H.
 
 
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Ispose    Best Thing   2/25/2011 9:48:47 AM
American tax dollars spent on an American product built here in the US
The Airbus bid only included Assembly in the US...all the parts built overseas..so the money goes there.
I don't see France or Germany buying Boeing as they as so tied into Airbus subsidies.
Keep the jobs here.
 
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eldnah       2/25/2011 9:58:43 AM
Unless a foreign military product is substantatively better than a US product, the US product should be chosen for econmic as well as technological purposes. If the foreign product is chosen it should be manufactured here under liscense not just assembled in the US. We don't need the French not supporting our tankers if they disagree with their use. The Europeans have no bitch about the US manufacturing its own weapons. Every article I've read and talking with users states the C-17 is superior in performance and now even in price to the Airbus A400M yet the Euros continue to maintain their manufacturing base. Isn't the US entitled to the same consideration.
 
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JFKY    A split buy   2/25/2011 10:02:14 AM
would have been the worst of both world's...two separate maintenance and training tails.  As long as they air frame is fulfilling the same role, the KC-130 doesn't compete for the KC-X role, then it's better to have ONE airframe rather than multiple airframes in that role.
 
I don't presume to know which plane was "better" but the decision to buy ONE was a good one...and this is a black-eye on the Air Force...this is two contracts they've managed to screw up, the CSAR helicopter debacle and the tanker fiasco.
 
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Phaid       2/25/2011 11:10:53 AM
Boeing is the correct decision.
 
Operationally it makes the most sense, the 767 is the right size to replace the KC-135.  A bigger aircraft would require major infrastructure changes which we don't want to pay for.
 
A split buy, as JFKY points out leads to two more sets of logistics pipelines, and still leaves us with infrastructure issues for some of the AC.
 
And economically it's the only right thing to do.  The KC-45 is not an American-built airplane, regardless of where final assembly takes place.  
 
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eldnah       2/25/2011 1:54:47 PM
I would also expect that the 767 will now also be the platform for the eventual E-3 Sentry, E-6 Mercury, E-8 J-Stars and RC-135, River Joint etc. replacements, probably another 50 to 75 planes.
 
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maruben    It is not finished   2/25/2011 1:58:02 PM
 
http://media.economist.com/sites/default/files/Clausewitz.jpg?1296752258" width="50" height="50" />

Defence, security and diplomacy

Clausewitz

America's air-tanker order

Home-team advantage pays off for Boeing

Feb 25th 2011, 12:58 by M.J.S.

http://media.economist.com/sites/default/files/imagecache/290-width/20110226_WBP506.jpg" />

SO THE rumours that EADS had managed to gain an edge over its rival, Boeing, on price in the long and bitter contest to supply the United States Air Force with a new generation of aerial re-fuelling tankers turned out to be wide of the mark. On February 24th the secretary for the air force, Michael Donley, announced that the home team had after all beaten the European defence firm that also owns Airbus to win a $35 billion contract to replace the 1950s-era Boeings (pictured above) that currently do the job.

It should not have come as a surprise, because this was a competition decided more by politics than the capabilities of the two aircraft on offer. In 2008 EADS and its then-partner in America, Northrop Grumman, pulled off a shock victory when its KC-45 triumphed over Boeing?s 767-based alternative. The air force had preferred the bigger plane based on the much more modern Airbus A330 mainly because of its ability to shift more fuel and other payloads. It was also in many ways a less risky option because the aircraft actually existed (see picture, below) and had been picked by other air forces, while Boeing?s offering, even now, will not make its first flight until 2015. There was also little difference in the number of American jobs that either plane would secure: about 50,000.

http://media.economist.com/sites/default/files/imagecache/290-width/20110226_WBP505.jpg" />But amid howls of rage on its behalf from (mainly) Democratic members of Congress, Boeing refused to take defeat lying down and exercised its right to protest at the award, coming up with 110 complaints about a bidding process that had been unusually fair and transparent (in part because of a scandal six years earlier when Boeing had first bid but had been disqualified on grounds of criminal collusion with an air-force official). The Government Accountability Office, a congressional watchdog, upheld seven of them. With a presidential election looming, the Pentagon decided to kick the can down the road.

In September 2009 the air force duly issued a new draft Request for Proposals (RFP) that, by making price the main criterion for selection, effectively undermined the case for the KC-45. A Northrop executive condemned it as a ?lowest-common-denominator approach designed to favour a less capable, smaller aircraft by turning the contest into a cost shoot-out?. Unless the RFP changed Northrop, he said, would pull out of the bidding, which it duly did in March last year. At the time, I wrote a piece with the provocative headline of ?The best plane loses?. It attracted a huge number of venomously furious e-mails, accusing The Economist of bias, ignorance and probably being in the pay of EADS. Quite a few of the correspondents had direct connections with Boeing.

As it happened, EADS was not ready to throw in the towel and it tried hard to find another American partner to help it carry on the fight. But one of the firm?s most senior executives told me that fears of possible political retribution had meant that no big defence company was willing to raise its head above the parapet. Even so, EADS soldiered on, partly because it still believed that the combination of its plane?s superiority and much lower procurement risk might still prevail, partly because it calculated that the campaign would help to establish its credentials as a serious competitor in America whatever the outcome.

In the end, Northrop?s concerns proved fully justifie

 
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doggtag    Boeing's "problem" it prefers remains hidden...   2/25/2011 2:59:24 PM
It isn't just the non-existent/vaporware KC-46A (SotAF Donley and Boeing say it will be designated such) that I'm not too keen on,
but rather Boeing's non-American parts suppliers,...
 
 
 Look at those chinese corporations involved in a good amount of Boeing's "American-made" airplanes' parts...
 
Nice to know that Boeing is actually helping china refine its composite construction techniques, so they can further enhance their military capabilities with assistance from US engineering knowhow...
Sure, maybe the J-20 is no competition for 5th gen US aircraft,
but Boeing's "technical assistance" didn't/won't just stay solely for civilian aircraft manufacture.
 
Anyone here want to place a wager as to whether the KC-46's parts will or won't be 100% Made in USA, like so many EADS-hating Boeing fanboys claim the KC-45 wasn't going to be?
 
I'm not saying Airbus/EADS has a clean conscience, not in the least.
But the fact remains, every counter-argument Boeing threw in its competition's face about the airplane not being built in the US,
Boeing themselves is just as guilty of.
American assembly of foreign-supplied parts was one of their key accusations against Airbus.
But parts assemblies imported from china for American military aircraft are acceptable?
Outstanding. http://www.strategypage.com/CuteSoft_Client/CuteEditor/Images/face5.gif" align="absMiddle" border="0" alt="" />
 
For THAT reason, we could never accept any new-build 737 types (hmmm, does that include P-8 parts? I wonder...),
 777 or 787-based aircraft into US military service, not if china is too likely a future adversary, as the crunch for a bigger share of the fossil fuels output (and other strategic resources) of the world
is becoming one of china's increasing concerns, with the US being its principle antagonist in that pursuit, as we each want/need a growing slice of that limited pie.
 
Perhaps Boeing feels that, if they play both sides of the Pacific field profitably enough, the fact they could make the US military as dependent on chinese labor as the American consumer is, that will, in some twisted shape or form, suggest Boeing is some kind of savior-peacemaker to the world, preventing these two powerhouse nations from clashing in the future...?
 
Still, I want to see Boeing stick to its "pledge" (which technically is not the same thing as a promise or commitment)
of delivering those first aircraft "on time, on budget", what was it? 18 planes by 2017? I'm going out on a limb here and assuming they mean actual flyable planes...
 
Mark my words, it's another setback-after-setback F-35 disaster in the making, considering they don't even have the thing flying yet.
Others may have bought the sales pitch,
but after observing the performance of every other major US defense program in the last quarter century, I have absolutely no faith whatsoever at all that Boeing will keeps it word and deliver these "on time, on budget".
If they had a few pre-production ones actually flying NOW,
genuine, solid, REAL aircraft that they could've legitimately (not theoretically) challenged EADS' claims about fuel offloads at range, reliability, etc,
 I might change my mind,...but where are they again?
 
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