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.
With Northrop based in California, this means 7,500 jobs for California, which will be producing all the parts for these aircraft.
Northrop Grumman’s KC-30 Tanker Team Will Support 7,500 California Jobs and Generate Economic Activity Exceeding $360 Million Annually
http://www.northropgrumman.com/kc30/benefits/impact.html
Boeing is not “the country”. And anyone who implies that is no patriot. I would sooner trust the USAF to speak for “the country”, particularly on the subject of what organization is the most qualified to refuel USAF planes, than boobs like yourself.
Wrong- read the post I gave you...all parts will be produced in Europe-only assembly and modification in Alabama. No jobs for California.
It appears that this will create a few thousands more jobs in California, than in Alabama.
Boeing is an American company. Shafting American business for profit is indeed unpatriotic.
Let's start with Alabama.
Northrop Grumman, EADS and the KC-30 Supply Base Contributes $875 Million to Alabama's Economy Annually A KC-30 Win Will Result in a Total Economic Impact of More Than $1 Billion Annually A KC-30 Tanker Win Would Create an Additional 5,000 Jobs for Alabamians
I have 27 other states to list.
Really, where is the evidence?
Nah. Boeing has a huge backlog in commercial aircraft.
Really, where is the evidence of this?
http://www.northropgrumman.com/kc30/benefits/impact.htmlCalifornia
Northrop Grumman’s KC-30 Tanker Team Will Support 7,500 California Jobs and Generate Economic Activity Exceeding $360 Million Annually Dec 17, 2007—Northrop Grumman Corporation's KC-30 Tanker team will generate economic activity exceeding $360 million annually and support more than 7,500 direct and indirect jobs in California if the KC-30 Tanker aircraft is selected by the U.S. Air Force. "As you know, California has a long history of supporting our armed forces and fostering the defense and aerospace industries that sustain our nation’s military,” said California Gov. Arnold Schwarzenegger. “If selected for production of the KC-30 Tankers, Northrop Grumman will add the next generation of military technology and aircraft to its already
Well jobs will be lost in Kansas.
Reference your remarks about the fuel bladders on the lower lobe of the 747 they were built that way for the Imperial Iranian Air Force ( 3 aircraft ) when the Shah was in control they used to fly the Atlantic with a boom under the tail and refuel every bodys aircraft gaining expertise for there crews. They would ron at McGuire in the 70s and the crew would take 16 containers to the Sears store in wrightstown and buy every electronic thing and fill the containers and put them back in the aircraft and fly a few missions with the USAF back to Iran drop the containers off and go do it again. The beauty of that aircraft was it totally was interchangable with the civilian 747 part for part. Boeing used 2 freighters that were awaiting sale to a asian country and Iran offered them cash with a few extra bucks and they were sold to The Shah.Once in a while they the IIAF would hire off duty PanAm mechanics to come to McGuire to fix there aircraft.
A great aircraft still in high demand today.....
This is an advertisement. The plane will be made mostly in Europe.
http://www.irconnect.com/noc/press/pages/news_releases.html?d=137410
I believe these are all American companies save for EADS North America, which is the local subsidiary of that European firm.
Only assembly and modification in Alabama. Part will be made in Europe. Northop is a front man so it can be claimed to have been made in America.
-- Goodrich Corporation; Phoenix
-- Honeywell; Phoenix, Tempe, Tucson, Ariz.
-- L3 Communications; Phoenix
-- American Aerospace Tech Castings; Phoenix
-- Intec EDM; Tempe, Ariz.
-- Parker Seal - CSS Division; Tempe, Ariz.
I can do 26 more states if you would like.
Well of course the Bush Administration Air Force gave the bid to foreigners!
Imagine a U.S. military where only Boeing aircraft ever existed and these Northrop/Grumman aircraft never did.
F6F Hellcat
A6 Intruder
F-14 Tomcar
FA-18 Hornet
B2 Spirit
Northrop Grumman is as American as Motherhood, Apple Pie and the American flag raising at Iwo Jima (during which battle their aircraft provided air cover).
We just heard last night, all the parts for this aircraft will be produced in Cal, creating over 7,500 jobs here. The company’s link has the same number.
You asked for evidence, I gave it to you.
Actually to say that jobs will be lost in Kansas is a little misleading. More specifically jobs won't be "generated" in Kansas.
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