Posted on 03/01/2008 7:42:30 AM PST by jdm
The Air Force snubbed longtime partner Boeing and awarded a lucrative contract to Northrop and EADS, the European maker of the Airbus, to build a fleet of refueling aircraft. The decision stunned Boeing and elected officials in the Northwest, who immediately objected to the decision to reject the all-American option. However, officials claim that Boeing’s submission simply didn’t measure up — literally:
Air Force officials offered few details about why they choose the Northrop-EADS team over Boeing since they have yet to debrief the two companies. But Air Force Gen. Arthur Lichte said the larger size was key. “More passengers, more cargo, more fuel to offload,” he said.
“It will be very hard for Boeing to overturn this decision because the Northrop plane seemed markedly superior” in the eyes of the Air Force, said Loren Thompson, a defense industry analyst with Lexington Institute, a policy think tank. And as the winners of the first award, EADS and Northrop are in a strong position to win two follow-on deals to build hundreds of more planes.
Boeing spokesman Jim Condelles said the company won’t make a decision about appealing the award until it is briefed by Air Force officials. Boeing believes it offered the best value and lowest risk, he said.
Stifel, Nicolaus & Co. analyst Troy Lahr said in a research note it was surprising the Northrop-EADS team won given the estimated $35 million per-plane savings offered by Boeing. Lahr estimated the Boeing aircraft would have cost $125 million apiece. “It appears the (Air Force) chose capabilities over cost,” Lahr said.
In short, Boeing gave a better price, but Northrop/EADS gave more capabilities. It can deliver more fuel or carry more personnel and/or cargo, depending on configuration. That may be a rational trade-off, and the Air Force is the organization best positioned to make that choice. They understand what their missions require and should know which airframe best complements them.
Appeals rarely if ever work, as the GAO assumes the client (Air Force) knows what it’s doing. It will only have a chance of succeeding if Boeing can demonstrate that the Northrop/EADS offering does not meet the specifications demanded in the RFP, or if the competing bid has unfair pricing or other violations of the process. And even then — as I know from personal experience — Boeing is unlikely to succeed, and could damage their chances for future contracts.
In the mid-1980s, the FAA put out an RFP for a system to completely replace the air-traffic control system across the nation. Two companies got selected to compete for the prime contractor position, IBM and Hughes Aircraft. The spec had three bedrock requirements: the system had to use all-new components in the ATC suite, it had to be functional at the time of submission (no mock-ups), and it had to use IBM’s computer as its core. IBM was required to give Hughes its at-cost pricing to ensure fairness.
IBM won that contract, as it bid significantly lower costs than Hughes. After the debriefing, Hughes found that (a) IBM had priced its core higher for us than for them, (b) their model reused existing components in the ATC suite, and (c) they didn’t have a working system. Hughes appealed the decision, which was considered something of a scandal in its own right at the time, but got overruled.
Three years later, IBM gave up on the contract, admitting that it could not produce the system. By that time, Hughes had sold its system to Canada, as well as other nations, while the US remained reliant on ATC computer systems dependent on tubes.
If that deal didn’t cause Congress to demand a redirected result, this one won’t, either. Congress may have the Air Force explain their decision to send some of their procurement budget to Europe rather than employ Americans, but unless someone turns up corruption or compromised safety, the decision will likely stand — and it might just be the best decision in any case, at least in terms of support for the missions the Air Force has to accomplish.
Speaking of self destruct...only the GOP would do something like this in an election year. Don’t they watch the news? Haven’t they heard The Dems promise to review Nafta and other free trade agreements in order to win votes in the crucial state of Ohio?
Heck if that's the only thing the Air Force wanted then stick a bunch of fuel bladders in and a boom on a 747.
Am I to understand that not a one of the planes has flown, even as a modified model for testing?
Yep
My husband says this is the case. He is an engineer. He says there is no evidence that the design will really work.
Have you ever tried to review lines of code to look for mistakes?
I dabbled breifly in programming a few years ago, and it was tough to find mistakes in a couple hundred lines of code.
Now, think of the millions of lines of code it’d take for operating one of those jets. Even if we did review it, something might be missed. The enemies of the United States are sneaky, and despite what we’d like to think, we aren’t invincible...and we can be fooled.
(I personally hated typing that, but that is the truth.)
I flew Boeing refueling for years, great planes a big mistake here, there will still be a fight although they need their peepee whacked. Mrs. Daschle is very disappointed
I have heard this free trade lingo for too long. Whenever jobs are awarded to foreign companies...the claim is American companies don’t make the grade. Baloney, the GOP accepted big money one way or the other and got one dinky plant and sold out their country. Patriotism does not mean making speeches and singing pro-American songs. A true patriot does not support screwing his country for money and does not defend the practice.
We also have no control over who works on these planes. I don’t trust Europe -completely politically correct- to make sure no bad guy gain access to the code and/ or to the planes. If it’s not made here by an American company, we have no control over these matters.
You’re welcome.
was gonna post this myself and stir up a hornet’s nest!
Ironic, considering that John McCain probably played a major part, back in the shadows, in making sure this decision went the way it did.
I did answer my own question after several dozen more searches. The Scarebus did fly tests. http://www.northropgrumman.com/kc45/
You live by the sword...you die by the sword. He may also be forced to accept public financing because of one the provisions in McCain-Feingold. Now, there is poetic justice!
Earlier thread didn’t make this so clear. $40 billion going to Euros instead of USA. Seems like poor timing, as if there would be a good time for this kind of thing.
Northrop Grumman is a U.S. company. Tanker will generate jobs in 28 states.
You don't know what you are talking about.
The plane in question is a derivative of the plane tested-not the same thing at all. Wow, I see European companies buying this plane and support their manufacturing-go figure.
Look, the plane will be built in Europe mostly-one small plant in Alabama; this has been documented. What you say is untrue.
Air Force officials offered few details about why they choose the Northrop-EADS team over Boeing since they have yet to debrief the two companies.
I don't recall hearing of any problems with in-flight refueling which limited our "reach, vigilance or power", even during the height of the Cold War. This decision smacks of typical federal government procurement politics. You know... like spending 30% more for something because the vendor company is minority or woman-owned.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.