Posted on 03/04/2011 9:54:55 AM PST by Yo-Yo
EADS North America will not protest the U.S. Air Force’s award of its aerial refueling tanker contract to rival Boeing, company executives said Friday.
“After meeting with the Air Force and the Department of Defense and evaluating the information they provided to us … EADS North America has decided not to protest the KC-X tanker award,” EADS North America Chairman Ralph Crosby Jr. said Friday. “The outcome was decided by price, and Boeing’s offer was at a lower price than ours.”
He also suggested it might be hard for Boeing to deliver tankers on the Air Force’s timetable and make a profit on the contract.
The Air Force chose Boeing’s 767-based NewGen Tanker (now called KC-46A) Feb. 24, calling it “a clear winner” over EADS North America’s larger Airbus A330-based KC-45 tanker. The tanker criteria were set up to choose the cheaper offer, assuming both met 372 mandatory requirements, if it was more than 1 percent cheaper, after adjusting for fuel costs, required airbase modifications and a battlefield assessment.
EADS’ advantage in the battlefield assessment was about equal to Boeing’s edge in the other two adjustments, Crosby said. “So, essentially, what determined the outcome here was one simple thing: It was the price.”
And Boeing’s total evaluated price was $20.6 billion, $2 billion less than EADS North America’s, Crosby said. Boeing’s offer, he said, “is much lower than we would have gone” and about $16 billion lower than Boeing’s first tanker price in this long-running saga.
What was originally a $40 billion tanker program in 2007 becomes a $20.6 billion tanker program.
Even though McCain's favored EADS didn't win the contract, he was right that competition would save the taxpayers money.
I am sure that the location of Boeing HQ (Chicago) had nothing to do with it.
The competition was a sham and it cost the American Company Northrop Grumman lots of money in proposal costs.
There was no room for Chicago Style bidding.
No protest.
Smart move.
Majors in the Pentagon are referred to as “Iron Majors,” meaning they know their stuff and stand up to senior officers all the time.
Or are you inferring these officers are dishonorable men?
Majors in the Pentagon are referred to as “Iron Majors,” meaning they know their stuff and stand up to senior officers all the time.
Or are you inferring these officers are dishonorable men?
I am sure you would not be concerned about Boeing and their proposal costs if they lost. And by the way, apparently you are not aware that Northrop Grumman did NOT bid. They withdrew from EADS. The bid was FRENCH EADS all the way. NG was not a part of this bid.
EADS, the french company that would build the parts to be assembled in the US, doesn't care about the US, and the french won't let us bid on their jets. . . and that is “fair.”
And it is always a bad thing to turn over our national security to another nation, especially the french. We get involved in another war somewhere and they think it wrong, bang, the french suspend deliveries and we have our tankers shut-off. Trust the french? No way.
I am concerned that Boeing cannot deliver at the proposed price. The airplane does not exist even in a full design. I understand that the price is firm but I think the taxpayer is still at risk. I would have preferred a split order. Both planes have some distinct advantages. I understand that a split order was not on the table but I think that it should have been considered.
I am sure you would not be concerned about Boeing and their proposal costs if they lost. And by the way, apparently you are not aware that Northrop Grumman did NOT bid. They withdrew from EADS.
Apparently you are unaware that Northrop Grumman was the prime on the first bid.
B&P costs are recovered from the taxpayers as an indirect cost...
This thread is about this bid and your comment about NG, absent any reference to previous bid, makes it clear you were unaware of who the bidders were during this bid. Unless, of course, you were not clear about your post.
What are the chances that a $20.6 billion tanker program actually stays a $20.6 billion tanker program and doesn’t bloat its way into a $40 billion tanker program?
Indeed. Please see Post 4 for context of my remark reference B&P costs.
I’d say talk to Lockheed Martin about that sort of thing. JSF is a great example.
Is this a scam to underbid and then triple the price?
The concept of a split-buy was considered but the cost for such an acquisition approach was extraordinarily high. You see, you would have to set up two completely different acquisition programs, program management, sustainment processes, support protocols and AGE equipment, training centers for crew and maintainers, as well as different logistics programs. That makes the concept cost-prohibitive.
Buying two different tankers is a world apart from, say, buying two different cars for your home. Much more involved and some much more costly.
Being in aerospace, we will see who they go to work for when they leave the service.
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