US KC-X Tanker Competition: Just Once More, Please

Defense Professionals ^ | 2/25/2010 | By Nicolas von Kospoth

[ErnstStavroBlofeld]

Yesterday, US Air Force and Department of Defense (DoD) acquisition officials informed Congress and members of the press on the revised request for proposal (RfP) for the competition for a new aerial tanker. The officials claim that RfP for the controversial KC-X programme, which is now entering its second attempt of finding a solution for the future of US Air Force air-refuelling, is designed to promote fair, open competition. However, it is still questionable if there will by any competition, as the Northrop Grumman-EADS consortium, having been awarded a contract in 2008 which prompted a protest from rival bidder Boeing, threatened that it would not solicit a bid, should it be convinced that the competition is not fair.

The $50 billion programme to replace the ageing KC-135 Stratotanker fleet of the US Air Force, has turned out to be a political-industrial marathon, with an exceptionally strong focus on the basic parameters and proceedings, rather than on the aircrafts’ performance and . In particular the Air Force, which has an urgent requirement for a new refuelling aircraft, was pushed to the limit of its patience. Putting it in a nutshell, then-Commander of the Air Mobility Command (AMC), General Arthur Lichte, exclaimed: “I don't care which tanker wins, I just need a new tanker!”

With the long awaited release of the final terms of the competition, the US officials attempt to provide a more transparent process and answered 350 separate questions, as the Financial Times reported yesterday. The highly details RfP includes 372 mandatory requirements and incorporates 230 mostly technical charges in response to comments on a draft document issued in September. According to Deputy Defense Secretary William J. Lynn III, the new RfP recognises the high stakes in the determination in terms of jobs as well as revenues and “buffeting” from

[NewLand]

PING?

[MHalblaub]

Another possible threat by NG could be to offer quite the same NG offered last time and tell Air Force NG will protest in case of a Boeing win due to the inconsistent fuel cost calculations.

[Yo-Yo]

This is becomming a farce at this point. The USAF knows exactly what NG-EADS will offer, and exactly what Boeing will offer.

They just need to man up and decide which one they want, then sole source it.

[MHalblaub]

“They just need to man up and decide which one they want, then sole source it.”

Sole source is going to be very expensive this time because just the first two batches are fixed price. With Boeing as the only manufacturer I'll expect some price increase.

Therefore I support a split buy. A special split buy. I call it a
competitive split buy

Each year Air Force is going to buy 16 aircrafts. For each year both competitors have to make a offer. If the costs of both aircrafts differ less than 1 % each company can build 8 aircrafts. Between 1 % and 2 % the bidder with the lower costs gets the option to build one aircraft more and the other company can sell one aircraft less. Between 2 % and 3 % two aircrafts and so on…

This is just an example. You can set span to 0.2 % or 2.5 %. As long as one competitor can’t offer a complying aircraft the other competitor can build all aircrafts for that span of time (1.5 month per aircraft). Solutions offered by one competitor may be used for the other aircraft to avoid development costs (boom).

Taxpayers are going to have a competition for years and save money.

[Yo-Yo]

My proposal is a bit more straighforward:

We’ve dinked around long enough that we are way behind in replacing older KC-135Es, so let’s combine the KC-X and follow-up KC-Y programs, and buy 12 of each type per year, every year, until ALL of the KC-135s are replaced.

One a month should be enough to keep both production lines in business.

[MHalblaub]

A protest by NG seems likely:

We have reason to believe that there are still strong factions within the Northrop-EADS teams who support going forward with a bid.

There are equally strong factions who believe that a protest to the Government Accountability Office (GAO) that the RFP is unfair.

http://leehamnews.wordpress.com/2010/02/28/northrop-may-decide-on-kc-x-this-week-or-next/

[Yo-Yo]

For a contract the size of the KC-X, is there a requirement for a US lead partner?

Who Needs Northrop Grumman Anyway?

While we're all waiting for Northrop Grumman to decide whether it wants to play, let's consider what could happen if they don't submit a bid for the $35 billion tanker contract.

In the absence of a Northrop-led proposal, what would stop EADS North America from submitting its own bid for the KC-X deal?

I can think of reasons why they would. If price is such a factor in the competition, cutting out the US flag bearer and bringing systems integration in-house might save some money. EADS NA has demonstrated it can win an aircraft contract from the US military. The 100th UH-72 Lakota for the US Army rolls off the assembly line in Mississippi next week. The company believes its solid performance on LUH allows it to compete on fair terms with American-owned companies for other Pentagon contracts.

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