Pentagon Projects Tanker Program Award

[bdk]

Pentagon Projects Tanker Program Award in March 2010

By Tony Capaccio

Nov. 6 (Bloomberg) -- The U.S. Defense Department has a target of March 2010 for awarding the contract for an aerial refueling tanker program worth about $35 billion.

Deputy Defense Secretary Gordon England projects the date in an Oct. 31 memorandum to the service secretaries, Joint Chiefs of Staff and other senior Pentagon officials. The memo outlines the fiscal 2010-2015 budget plan that the Bush administration will leave for President-elect Barack Obama.

England didn't explain the rationale for the March 2010 date. His spokesman Kevin Wensing had no immediate comment.

The tanker program has been delayed for years. Northrop Grumman Corp., based in Los Angeles, and Airbus SAS parent European Aeronautic, Defence & Space Co. won the 179-plane program in February, but losing bidder Chicago-based Boeing Co. successfully protested the award. U.S. Defense Secretary Robert Gates on Sept. 10 delayed the re-bid until the next presidential administration, citing a lack of time to conduct a ``fair and objective competition.''

The new Democratic administration faces decisions on $125 billion in major weapons programs, John Young, the Pentagon's chief of acquisitions, told reporters on Oct. 30.

These include the replacement of the Air Force refueling tankers and combat search-and-rescue helicopters; the purchase of additional Lockheed Martin F-22 fighter jets and Boeing's C-17 transports; the acquisition of a new satellite communication system; and a decision on whether to curtail buying the Navy's DDG-1000 Zumwalt class destroyer, jointly built by Northrop and General Dynamics Corp. and buy more older DDG-51 type destroyers. Raytheon Co. makes the radar for the DDG-1000.

Tanker Funding Shifted

The current Air Force budget called for delivery of the first five tankers in fiscal 2010, with 12 more in fiscal 2011. The aircraft were to be ready for initial combat operations by early 2014.

England, in his memo, ordered the Air Force to shift from the stalled tanker project to other programs about $3.3 billion planned for aircraft purchases through fiscal 2012, including the entire $1.8 billion for fiscal 2010.

``A March 2010 award means the Air Force won't receive any new tankers this decade,'' said Loren Thompson, a defense analyst at the Lexington Institute in Arlington, Virginia. The service has spent ``a vast amount of time and energy to produce virtually nothing.''

The Air Force with Boeing first proposed a tanker replacement program in late 2001 to the Senate defense appropriations subcommittee. The current fleet has been in use since 1956.

http://www.bloomberg.com/apps/news?pid=conewsstory&refer=conews&tkr=BA:US&sid=aHaCvE14WFzo

[jtramo]

I guess they are giving Boeing enough time to produce a KC777 proposal. Either way I hope Boeing wins.

[bdk]

I guess they are giving Boeing enough time to produce a KC777 proposal. Either way I hope Boeing wins.

777 is larger than the Airbus offering though (which was larger than the 767). The USAF needs to decide what they really want.

[JDK]

Shesh, you couldn't make it up. What a way to do business or run government.

I guess they are giving Boeing enough time to produce a KC777 proposal. Either way I hope Boeing wins.

I have no axe to grind for/against either company, and little / no understanding of current 'defence' but Boeing's main achievement here so far has been to stop the air force getting any tanker, and then refusing to play after that - hardly putting the US State and US forces interests on their agenda. Hardly anything to be proud of, and effectively 'anti-American'. Also, like the much-promised Dreamliner, jam tomorrow isn't much cop when you need bread today.

Military aircraft procurement right back to 1914 is a saga of incompetence and graft that you'd be laughed at if you put the same amount of it in a novel.

Just my 2d.

[RyanShort1]

Shesh, you couldn't make it up. What a way to do business or run government.

I guess they are giving Boeing enough time to produce a KC777 proposal. Either way I hope Boeing wins.

I have no axe to grind for/against either company, and little / no understanding of current 'defence' but Boeing's main achievement here so far has been to stop the air force getting any tanker, and then refusing to play after that - hardly putting the US State and US forces interests on their agenda. Hardly anything to be proud of, and effectively 'anti-American'. Also, like the much-promised Dreamliner, jam tomorrow isn't much cop when you need bread today.

Military aircraft procurement right back to 1914 is a saga of incompetence and graft that you'd be laughed at if you put the same amount of it in a novel.

Just my 2d.

Personally, while I appreciate the old Boeing company in our country, I hope they lose the contract. They've made so many mistakes in the process that a loss might do them some good and shake them up a bit. Their Dreamliner progress certainly doesn't inspire confidence in their business skills.

Ryan

[Robbie Roberts]

Do you REALLY want to wish an American company will lose a big contract when they employ thousands of Americans, whom they may have to lay off some of, during a economic time when everyone needs to keep working to get OUR economy back on its feet?(Not that there is anything REALLY wrong with the economy that shutting up the TV people won't help!)

Robbie

[RyanShort1]

Do you REALLY want to wish an American company will lose a big contract when they employ thousands of Americans, whom they may have to lay off some of, during a economic time when everyone needs to keep working to get OUR economy back on its feet?(Not that there is anything REALLY wrong with the economy that shutting up the TV people won't help!)

Robbie

It's not like the other contract wasn't going to employ American's either... That's one of the most annoying arguments Boeing was using.
I have a friend who just quit working at Boeing after I think more than 10 years because of things he didn't like that were going on their ethically. Just because they're American doesn't mean they aren't wasting taxpayer dollars or doing shoddy work.
Besides, if they actually had to stand up to the unions and be competitive to make money it might actually do them some good, and the taxpayers as well. Maybe they could build cheaper aircraft and cost the taxpayers less.
If the manufacturers could do away with unions and stupid lawsuits we could afford to buy a lot more planes for the money.

Ryan

[bdk]

I have no axe to grind for/against either company, and little / no understanding of current 'defence' but Boeing's main achievement here so far has been to stop the air force getting any tanker, and then refusing to play after that - hardly putting the US State and US forces interests on their agenda. Hardly anything to be proud of, and effectively 'anti-American'. Also, like the much-promised Dreamliner, jam tomorrow isn't much cop when you need bread today.

Just my 2d.

Whoa, dude! You need a refund!!!!

Boeing already won the contract twice, once as a lease arrangement and once as a sale. It was overturned the second time by an Airbus protest. Airbus refused to play in the last one unless a larger plane could be considered. Just as in Airbus' case, why play if you don't have a viable contender? The Pentagon's problem is that you cannot have a competition with only one player- and there is only one player in whatever size range they select. The Pentagon messed up the selection by using different selection criteria than was agreed to in the RFP, hence the Boeing protest.

As for the Dreamliner, let's review the schedule delays from the A380 and A400 and compare. The 787 uses a completely new system architecture and is an order of magnitude more technically advanced than the A380. I can't make any excuses for the schedule, but a modern jetliner is a complicated beast. You can't know up front every technical challenge you will encounter before the aircraft is even designed.

[JDK]

Hi bdk,
First off, fair call on the Dreamliner / A380 issues - I wasn't aware that they were different generations of airliners. (And now having wasted 20 min of my life reading about d@mn tubes, I'd like a 'refund'.)

As I was trying to indicate, despite the one eyed fandom of some for Boeing or the other tenderer, both companies have little to be proud of (IMHO) in closing the deals.

Moreover, it seems to me, those patriotic Americans need to address an (arguably) corrupt and certainly broken tendering system with the government and USAF - due to American failures, the USAF doesn't have what it wants and it's not looking like it's going to turn up in any reasonable time-scale either - noise about jobs is still talking about jam, maybe, tomorrow.

No one but Americans can be blamed for the problem, can they?

This wikipedia page* is an interesting read about the competition between Airbus and Boeing.

http://en.wikipedia.org/wiki/Competitio ... and_Boeing

As before, if you were to delete the names and avoid a personal or nationalistic bias, it's hardly edifying reading either way up. (Here in Melbourne we have a Boeing subsidiary which is building Airbus parts among others.)

I'd tip my hat to Boeing for the 707, 737 and critically the 747 - the last being one of the most important aircraft in history, and a clear example of betting the company. However, today's Boeing doesn't get much credit if it can't buy the road in Congress without getting caught and if it gets beaten by an overseas competitor that's caught it up and is, in areas, overtaking it.

The British operated an Empire preference scheme - one effect of which was developing second-rate aircraft due to being able to avoid real competition. There are parallels - what do you want - domestic preference, or the best, or now? You can't have 'em all.

As someone who knows little and cares less about current aviation business, a cursory examination show that the more things 'change' the more they are just the same. There are more zeros after the numbers, companies in question are multi-nationals rather than in red barns, but otherwise, all human sins and failures with occasional triumphs are here.

Ah, well it's easy to be a smart@ss.

Just another 2d, which was refunded.

*While Wikipedia isn't an infallible source, it's a darn sight more factually reliable than ~say~ most WIX posts for a ~ah~ random comparison.

[262crew]

I have no axe to grind for/against either company, and little / no understanding of current 'defence' but Boeing's main achievement here so far has been to stop the air force getting any tanker, and then refusing to play after that - hardly putting the US State and US forces interests on their agenda. Hardly anything to be proud of, and effectively 'anti-American'. Also, like the much-promised Dreamliner, jam tomorrow isn't much cop when you need bread today.

Just my 2d.

Whoa, dude! You need a refund!!!!

Boeing already won the contract twice, once as a lease arrangement and once as a sale. It was overturned the second time by an Airbus protest. Airbus refused to play in the last one unless a larger plane could be considered. Just as in Airbus' case, why play if you don't have a viable contender? The Pentagon's problem is that you cannot have a competition with only one player- and there is only one player in whatever size range they select. The Pentagon messed up the selection by using different selection criteria than was agreed to in the RFP, hence the Boeing protest.

As for the Dreamliner, let's review the schedule delays from the A380 and A400 and compare. The 787 uses a completely new system architecture and is an order of magnitude more technically advanced than the A380. I can't make any excuses for the schedule, but a modern jetliner is a complicated beast. You can't know up front every technical challenge you will encounter before the aircraft is even designed.

I know this is not a military matter but since you brought it up... IMO Boeing's first and biggest mistake was to announce such an aggressive schedule for this airplane. It takes years to develop the traditional aircraft construction type, so the only thing I can think of that may have been their reasoning was they were trying to take the wind out of the A380 sails? The Sonic cruiser may have also been a pawn it the chess game?

[JDK]

Yesss... I found this interesting (well sort of - it was more attractive than working, which is what I should've been doing... )

Former USAF Secretary Michael W. Wynne was asked by the Military Times "How did the Air Force botch the tanker selection process so badly?" Wynne replied that,

I think the Air Force overcomplicated it. They really wanted both competitors to be almost even so everybody had the best chance of [winning]. ...I think here is one of those cases where Boeing had probably assessed that their prospects were dimming. ... I would say they systematically began to build a case [for a protest], and I’m not sure that they shared everything that they could have shared with the Air Force along the way and essentially were building ... a “Pearl Harbor” file that could be used later [in a protest]. ... There’s a feeling in the Air Force that maybe we were as transparent as we could be and maybe Boeing wasn’t.[7]

John Young, the DoD's undersecretary for acquisition, technology and logistics, stated on September 17, 2008 that Northrop's proposal had been $3 billion less than Boeing's, $12.5 to $15.4 billion. "Frankly", Young said, "Boeing's tanker was smaller and should have been cheaper... A member of the American public might conclude that Boeing sought to charge more than the Defense Department reasonably expected to pay".[8]

http://en.wikipedia.org/wiki/United_Sta ... ent_effort

I should add my comments re- American's being responsible, wasn't an anti American comment; h*ll, there's similar political and military issues everywhere, but with friends like that in the companies, government and air force, who needs enemies?

[CAPFlyer]

I think Wynne's comments are probably close, but the source of the dimming prospects slightly off. As the GAO report stated, the USAF wasn't transparent. The project management made comments and suggestions to NG/EADS that weren't also made to Boeing and not revealed to them. In addition, that his mention about the USAF wanting to make it as even as possible was the crux of the matter. Everything they did made it impossible for either airplane to meet the actual mission that the KC-X was designed to fulfill. On one hand they had 2 aircraft, the B767 and A300 that were "right sized" for the mission, but one had a clear advantage over the other in that one was already well progressed in a boom tanker conversion program. The A300 is also less fuel efficient than the B767, so it had a disadvantage there as well. NG/EADS didn't want to bid it and made it clear to the USAF that they didn't want to bid it. So the project managers decided to disregard the rules and allow the A330 to be submitted and it be weighted in direct conflict with the bid grading process outlined in the RFP to "make it even".

As Secretary Gates pointed out in his removal of acquisition authority from the USAF and then the USCG, the problem is that these competitions are not supposed to be "even", they are supposed to get the user the best product that fits the job needed and not everything but the job needed. This is what happened in the CSAR-X, the KC-X and the various USCG programs that highlighted how badly flawed the defense acquisition system is.

Also, Young's comments are about as BS as they can get. NG/EADS's bid was "less" because they didn't include everything that Boeing did in their bid. When the GAO looked at the numbers as part of the review, they found that NG/EADS's numbers substantially deviated from the numbers available from other sources, including the data that they provided to the USAF to evaluate the life cycle costs for both their own and Boeing's submissions. This was the crux of the GAO's finding against the USAF in the contract award.

[muddyboots]

Whatever happened to set a standard and buy teh cheapest airpplane taht meets taht standard? JFC guys! This isn't something that has never been done, ya know?

I would like to see Boeing punched in the nose regardless of what Americans lose their jobs. If, like our auto companies, they fall out of business due to incompetant leadership, well, tough. THose employess should maybe look to talking Airbus into opening a franchise here, without all the 50+ yeaar old traditions of stealing and bribing our congress, or air force, and without all those old costs like the unions have shoved down their throats over the years.

I am pro union, but not when it drives my country into the tubes. And I am pro made in America. And I am pro work in America. But we can't be STUPID about it anymore.

[262crew]

Whatever happened to set a standard and buy teh cheapest airpplane taht meets taht standard? JFC guys! This isn't something that has never been done, ya know?

I would like to see Boeing punched in the nose regardless of what Americans lose their jobs. If, like our auto companies, they fall out of business due to incompetant leadership, well, tough. THose employess should maybe look to talking Airbus into opening a franchise here, without all the 50+ yeaar old traditions of stealing and bribing our congress, or air force, and without all those old costs like the unions have shoved down their throats over the years.

I am pro union, but not when it drives my country into the tubes. And I am pro made in America. And I am pro work in America. But we can't be STUPID about it anymore.

This situation with the tanker has been a cluster f. from the start, all parties involved have repeatedly dropped the ball and hid it in various orifices that I cant say on this site but I think you get my drift? I may be one of those employees that get the ax in the near future. I really cant speak about any program at the company except the programs I work on, and I can tell you that our leadership is fantastic and by far this is the best company I have ever worked for! Do I trust them 100%? No, and I darn sure don't trust the union! This is business after all. Believe me no one wants this tanker deal done more then me the average employee. It sounds like the UAW guys don't want to make any concessions in pay, if it came down to pay cut or lose my house and live in the car with my kids, pay cut doesent sound that bad if it meant having an income. I have a friend who works for Frontier airlines and they are in real bad shape they have already cut pay and benefits to the mechanics, but they are employed...for now. So IMO saying you hope people lose their jobs is crap the UAW situation p!sses me off but the ramifications of the big three going out of business is un-sat! Socialism is no way to go I don't agree with any bail outs but it looks like that is the only option, if we bail out the big three then we should get a discount in the amount of the "loan" we give them to go towards the purchase of a new vehicle. That's fair? As far as I know Boeing is not standing next to the free way off ramp with a sign saying they need a hand out. bdk's statement was correct Boeing already won the contract twice and had it pulled away. Once due to some unethical people who were dealt with, and Boeing's response to the unethical dealings was to have mandatory ethics training for all employees, it sucks having to renew our ethics training every year but its a condition of employment. That is the small end of the spectrum and it goes way beyond ethics training. The second time the contract was taken away was due to more unethical dealings this time it wasn't Boeing, it had more to do with a certain former presidential contender.

[jtramo]

So when we outsource all our manufacturing including aircraft and cars, what will our great country build? I'm sorry but a few "technicians" merely assembling Hondas, Toyotas and AIRBUS aircraft here in the US is cut rate at best. All the high paying intellectual jobs along with the vast majority of the profits stay overseas. I dont care that your Honda or Airbus is assembled in the US, its still a foreign product sending money and jobs overseas.

But non of this matters in this debate. The final GAO report showed nearly 10 ways the USAF unfairly favored the Airbus bid. Nuff said.