Northrop completed its debriefing with the Air Force on Monday, and said the Air Force called its winning bid "more advantageous to the government" in the key areas of capability, past performance, cost and refueling performance.
Under its plan, EADS will assemble Airbus A330 freighters at a new plant in Mobile, Alabama, while Northrop turns them into military tankers at an adjacent facility.
On Monday, Los Angeles-based Northrop said the assembly and militarization of the tankers would create 1,500 jobs in the United States. EADS has said assembly work in Mobile would create 1,300 jobs.
The first of the tankers will be assembled at a plant in Melbourne, Florida, but that work will be transferred once the Mobile facilities are up and running, probably around 2010, a Northrop spokesman said. The first tanker is due to be delivered to the U.S. Air Force in 2013.
According to Northrop, its handling of the work will create 14,000 direct jobs and 34,000 indirect jobs in the United States. Major suppliers to the Northrop/EADS team include General Electric Co (GE.N: Quote, Profile, Research), Honeywell International Inc (HON.N: Quote, Profile, Research), AAR Cargo Systems, Sargent Fletcher and Knight Aerospace.
Another interesting article:
Here’s another perspective from the March 21, 2008 of the Aerotech News, Vol. 23, Issue 8:
“Why did Boeing lose Air Force tanker contract?
By Les Blumenthal, McClatchy Newspapers
It was a question that had been whispered around Capitol Hill corridors in the days following the Air Force’s selection of a European plane rather than a Boeing one to replace the nation’s fleet of aging aerial refueling tankers.
Rep. Norm Dicks finally asked it.
“Some people are saying Boeing was arrogant, discourteous?” the Washington state Democrat asked Air Force Secretary Michael Wynne.
“All my dealings with Boeing were objective and professional,” Wynne responded.
Wynne didn’t elaborate, Dicks didn’t press.
At congressional hearings over the past two weeks, Wynne and other Air Force officials defended the $35 billion tanker contract, insisting the competition was fair, open and legal.
But plenty of questions remain unanswered about how Boeing lost a contract it was heavily favored to win. They include:
1. Did the Air Force make critical changes in the final bid proposal and a computer model used to evaluate the bids that ended up throwing the contract to Northrup Grumman and the European Aerospace Defense and Space Co., the parent company of Boeing’s rival, Airbus?
2. Did Boeing misread crucial signals about the contract becase of a strained relationship with the Air Force in the wake of a 5-year-old procurement scandal that sent two people to jail and led to the resignation of the company’s chief executive?
3. Was Boeing’s commercial plane division so fixated on the new 787 Dreamliner that producing 12 to 15 767s a year for the Air Force tanker program became secondary?
4. Did the Boeing defense team, so convinced it would win, get outhustled by Northrup-EADS, which according to Air Force officials, brought its “A” game to the competition?
5. Did the Pentagon buckle to pressure from Sen. John McCain, R-Ariz., who demanded that there be more than one bidder even if it meant the Air Force couldn’t consider the estimated billions of dollars in possibly illegal government subsidies the European plane manufacturer received?
In early summer, the Government Accountability Office will rule on Boeing’s protest of the tanker contract and answer some of the questions. Until then, many details remain cloaked in confidentiality or can’t be released since they may involve proprietary information.
Boeing, its supporters on Capitol Hill and the defense community were stunned when the Air Force announced it was awarding the contract for 179 tankers to Northrup-EADS. The contract eventually could be worth $100 billion as the Air Force replaces nearly 600 Eisenhower-era tankers.
Nothrup-EADS will use Airbus A330s for the tankers. Boeing would have used the 767.
The A330s are built in Toulouse, France, with major sections manufacturednby the British, Germans and Spanish. The tanker version of the A330 will be assembled at a new plant planned in Mobile, Ala. Boeing was prepared to build the 767 tanker in its Everett, Wash., plant. Tanking equipment was to be added and flight testing conducted at the company’s plant in Wichita, Kan.
The Airbus A330 is newer, larger and can carry more fuel, passengers and cargo. The 767 is smaller, cheaper to operate and can land in more places closer to combat zones.
Initially, the Air Force seemed inclined to favor Boeing. Air Force officials told Congress they were looking for a medium-size tanker to replace the KC-135s. Cargo- and passenger-carrying capabilites were not a top priority, and Boeing and others were convinced their 767 would be a better fit than the Airbus A330.
Because it was smaller and lighter, the 767 tanker would be able to fly into more air bases in places like Central Asia, the Horn of Africa and the Persian Gulf.
In issuing its draft request for proposals, the Air Force raised the issue of government subsidies and a pending World Trade Organization ruling. By some estimates, the A330 and its companion A340 received $5 billion in research and development subsidies, or “launch aid”, from European governments.
McCain reacted quickly when he heard the subsidy issue would be a factor in the competition. The Arizone senator had been the lead opponent of an earlier $23 billion deal that would have allowed the Air Force to lease up to 100 Boeing 767 tankers. The lease deal collapsed amid a major Pentagon procurement scandal.
In a Sept. 8, 2006, letter to Defense Department officials, McCain said he was concerned about the subsidy issue becoming part of the tanker competition and told the Air Force to drop it.
At the time, Republicans still controlled Congress, and McCain was in line to become chairman of the Senate Armed Services Committe.
McCain said there was no precedent for including the subsidy issue in a procurement competition and that if the Air Force persisted, it would risk eliminating a competing bid for the tanker. The subsidy issue was dropped.”