ST. LOUIS, June 18, 2008 – Boeing [NYSE: BA] was informed today that the Government Accountability Office (GAO) found in Boeing’s favor on a number of issues related to its protest of the U.S. Air Force’s award of a $35 billion contract to supply the service with its next-generation aerial refueling aircraft – or KC-X tankers – to begin replacing the current fleet of KC-135 tankers.
In response to the ruling, Boeing released the following statement from Mark McGraw, vice president, Tanker Programs:
“We welcome and support today’s ruling by the GAO fully sustaining the grounds of our protest.
“We appreciate the professionalism and diligence the GAO showed in its review of the KC-X acquisition process. We look forward to working with the Air Force on next steps in this critical procurement for our warfighters.”
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Comments (26)
Finally! I'm very glad to hear this news, and I hope that we work even harder to win this contract. From the IDS folks here at Philadelphia, congratulations and good luck to everyone working on this project!
Posted on June 18, 2008 12:19
Congratulations, now the really hard work for Boeing begins. I am sure there will be more protest's and even a court fight before all is settled, but without a doubt Boeing offered by far the best product.
It also restores a little faith in our system to see the GAO do the job that they did.
Paul
Posted on June 18, 2008 13:19
Yes!
Please still add: politically intended, patriotically represented - Boeing forever !!!
Would be unbelievable, if we had to buy European airplanes
Posted on June 18, 2008 14:00
As a general supporter of the Boeing position, I'm still stunned at the breadth of the GAO findings as stated in their press release.
"The Air Force, in making the award decision, did not assess the relative merits of the proposals in accordance with the evaluation criteria identified in the solicitation..."
So Boeing had two touchdowns and EADS had three field goals. After the game was over the Air Force decided that touchdowns would now be worth 3 points and field goals would be worth 6 points and gave the game to EADS. (Worldwide readers: sorry for the American Football analogy.)
But that's not even the best part.
Burried down in item 6 in the GAO release is the following: "...the agency [Air Force] during the protest conceded that it made a number of errors in the evaluation that, when corrected, result in Boeing displacing Northrup Grumman as to offeror with the lowest most probable life cycle cost..."
No wonder heads almost exploded all around Boeing when this thing came down on Feb 29th.
Not a proud day for the boys and girls in blue. Hope they get their collective acts together very soon.
Unfortunately, there is no direct mention of production risk in the initial press release.
Posted on June 18, 2008 22:21
Congrats Boeing!
Last thing we need is the USAF flying a french aircraft.
Posted on June 19, 2008 06:20
Awesome!
Northrop & EADS should have been ashamed at how the competition was run, I'm sure they were fully cognizant of the changes going on during the process. A honest and worthy competitor should stand fully behind their product and insist on a proper and fair competition. Anything less is bad for all involved. They know fully that per the initial rules that they did not/could not win, yet they only stood gloating on the sidelines. Ethics should stand above profits.
My concern now is, will the USAF present requirements like the initial run, or will they now make a larger plane & payload a priority. If so, do we have enough data to offer a proper competitor like say a 777 Tanker.....
Good luck to all on the Tanker program. You have worked hard and now have some vindication for that effort. Do not rest on that, you have a major fight coming up now and I fully expect Boeing to do it right!
Posted on June 19, 2008 08:39
Can offerers submit multiple platforms? I know that a close review of requirements should lead to a preferred platform, however, might it be wise to submit two (or three) platforms (767,777,787) if allowed?
Posted on June 20, 2008 21:24
What will be the New USAF KC-X Requirements to Boeing and NG Tanker Teams in the rebid?
Will Boeing be ready to offer 3 platforms ?
Such as :
-KC-767-300ER Tanker
-KC-777-200 Tanker
or
-KC-787 Tanker
to offer to the USAF ?
Posted on June 21, 2008 01:11
Congratulations, but this is just the first step.
EADS AIRBUS is already No 1 in civil transport aircraft, and EADS Eurocopter is No 1 in helicopter market. Now EADS attempts to enter into the Defense Market.
Watch out for next... !!! EADS could offer A400M for Airlifter, NH-90 for transport helo or A380 as Air Force One.
Posted on June 21, 2008 08:11
I HOPE FOR BOEINGS SAKE that the GAO 'watches' over the RE-BID so that NOTHING WEIRD happens on this time around. that way its FAIR!! CONGRATS TO ALL!!
Posted on June 23, 2008 22:04
While I have no concept of Boeing's business strategy for the 767, I've wondered why the C-17 has not be considered for an alternative 'tanker'. If a C-130 can refuel helos, why can't the C-17 carry a fueling package too? A ro-ro concept or a dedicated tanker that can do cargo or fuel seems logical and congress might like it too. If the C-17 is too big or its aerodynamics don't lend themselves to a re-fueling mode, an engineer would know. Its better than an A-330 anyway..and I'm from Alabama ( the state for Airbus assembly ).
Posted on June 25, 2008 08:15
Ok! So I just finished reading the 67 page from GAO pertaining to the tanker contract and man the Air Force blew it big time. The best part that I love is....
The A330 could not perform the emergency maneuvers required in an air refueling as in the Flight manuals for the kc-135 and kc-10 (which was a requirement). So EADS simply said that their aircraft could EXCEED its FAA rated MAX OPERATING SPEED AND DIVE SPEED (although it had never been performed), amazing thing about this is that the Air Force Bought off on it! Even better... the chief team member who decided this was acceptable was confronted and given a Q and A session with the GAO. He admitted that he was not an engineer, and knew nothing about the safe limits of operating speeds of aircraft!
IF the AF sticks to what it originally said in the proposal it’s a no brainer. Furthermore after reading the GAO report on how EADS did with the A330, the 767 is a sure win.
Don’t forget the WTO is suppose to decide on the A330 on subsidiaries this year and if the re-contract takes into next year I wouldn’t be surprised that congress blocks the EADS proposal at the lest.
Posted on June 25, 2008 15:11
After reading the full version (redacted) of the GAO report, I can only conclude that Boeing probably won this competition and for some reason the Air Force saw fit to shift the goal posts. On page 54 of the full report, the GAO notes:
"Whether or not Northrop Grumman’s proposed schedule accommodates providing these product-support services within the 2-year timeframe misses the point, however. By explicitly refusing to contractually commit to the 2-year timeframe for providing these services in the SOW as it was repeatedly requested to do, we think that Northrop Grumman has taken exception to this solicitation requirement. See C-Cubed Corp., B-272525, Oct. 21, 1996, 96-2 CPD ¶ 150 at 3. It is a fundamental principle in a negotiated procurement that a proposal that fails to conform to a material solicitation requirement is technically unacceptable and cannot form the basis for award."
Doesn't this render NG?EADS' proposal as "non-responsive"? Isn't this enough to invalidate the award?
Posted on June 25, 2008 15:29
Dennis, yes an engineer would know, and as an aeronautical engineer, the C-17 is not better than an A330 in a re-fueling role. C-17's are designed for STOL capability and take on drag and fuel flow penalties during cruise due to the large wetted area of the tail and its four engines. There are multiple commercial airliners which would be better than C-17's.
The USAF does have lots of justification to do, but lets not forget the first scandal which sent Boeing top officals and USAF offical to jail. There were no findings from the GAO that faulted NG/EADS for not playing fair.
Posted on June 25, 2008 18:22
I HAVE HEARD MANY COMMENTS REGARDING THE CONTRACT FROM BOTH SIDES. THE FACT IS, THE AIRFORCE MESSED UP. THEY HAVE PROVIDED A HUGE DISSERVICE TO BOTH COMPANIES, THE TAXPAYER, AND THE US MILITARY. FOR THAT THEY SHOULD BE ASHAMED.
THE NORTH PART OF OUR STATE(HUNTSVILLE) HAS A HUGE BOEING PRESENCE OF WHICH WE ARE PROUD. HOPEFULLY THE US GOVERNMENT WILL GET IT TOGETHER FOR THE BETTER OF ALL OF US.
Posted on June 26, 2008 13:38
Dennis
I'm not an expert by any measure, but the C-17 is not a tanker platform for a variety of reasons, not the least of which is a ramp and a boom are pretty much mutually exclusive.
C-130 uses hose and drogue to fuel helos, not a boom.
Posted on June 26, 2008 16:27
From an outsiders point of view the US Military Procurement system seems to be going through a crisis at present. The KC-X contract has now been competed, selected, awarded, protested and audited twice now and it is a fair guess that it will have to be done for a third time (at a cost to US industry & taxpayers and a delay to the overall programme).
Also the USAF CSAR tender seems to have been awarded (to Boeing HH-47) in a perculiar manner and has had protests upheld.
Surely the Air Force just need to determine the selection criteria and weighting before sending out any further RFQ's and then stick to it, regardless of who wins. This is the normal practice in the commercial world and I can't see why the USAF should differ from this. This would also allow a weighting to be applied for US Manufacture if this is a real requirement.
As a side point, can anyone explain why AS Air Force and US Navy use two different air to air refueling mechanisms (boom vs hose and drogue)? This seems an added complication for this tender as any future tankers have to cater for both requirements.
Also, how will F-35/JSF be configured for air to air refuelling? Will this standardise on one mechanism or utilise both?
Posted on June 27, 2008 02:16
To make a C-17 capable of A/R missions would require extensive modifications that would not be cost effective. Air Force planes are all refueled(if they are capable of a/r) by a Boom. The other services, Navy, and Marines, use hose and drogue systems for their helos and planes. The KC-135 and KC-10 can have hose and drogue systems attached when needed, but its a pain, and is not the primary refueling system. Having seen both systems in use I would say the flying boom is by far the best way to Aerial Refuel to date. Cant wait to work on a new tanker! Congratulations Boeing! Keep it up!
Posted on June 27, 2008 12:33
Mike B,
The reason the USAF used the boom method was because of a Cold War era legacy that is still maintained, namely our fleet of heavy bombers and AMC's heavy military airlift fleet. The boom system allows a faster fuel offload than the hose and drogue could achieve, 6000lbs per minute vs roughly 1500lbs-2000lbs per minute. For just about all fighters out there they cannot receive fuel at the higher rate anyway so in the Navy's case there was no need to operate a tanker that used the boom system (no heavy bombers or heavy airlift therefore no need for extremely high rates of fuel offload).
The USAF on the other DOES operate a lot of heavy bombers and heavy airlift aircraft, and as such these aircraft can sometimes spend as much as 20-30 minutes just gulping down fuel from a boom at its max rate. Considering lately how often the B-52 and B-1s are still being used along with the rate of the heavy airlift fleet then it would imprudent to go to a hose dominated fleet.
Posted on June 27, 2008 15:45
Dear Mike B
The boom is best to refuel fast large aircrafts like freighters or bombers. Because Air Force got a lot of tankers with booms they put this system also on the smaller fighter aircraft.
You need a big plane to operate a boom. Therefore Navy can't use booms on aircraft carriers. The hose and droge system is small enough to make even a F-18 fighter a tanker aircraft.
Most fighter aircrafts can't use the higher flow rates of a boom system. A hose and drogue system would be enough and two or three small aircrafts could be refueled at once.
A helicopter can only be refueled with hose and droge.
Posted on June 28, 2008 08:13
Please......It is painfully obvious that Northrop/EADS has the superior platform. Stop kidding yourself about it being a European aircraft and take a look at the origin of the products in every one of Boeing's aircraft. You act as if the jobs created in Alabama are not AMERICAN. You got cocky and tried to tell the customer what they wanted. Fall back, lick your wounds, make the internal organization changes necessary and move on. Stop wasting my tax dollar and let Northrop start supplying the best platform
Posted on June 29, 2008 11:55
Considering the rise in energy costs, I would hope that the life cycle cost of fuel burned is heavily factored into any future decisions.
Could the Navy build a hose and drogue tanker from the P-8?
Posted on June 30, 2008 15:06
If bought in addition to the KC-45As, I hope
300 KC-767 Boeing Converted Tankers
( 300 KC-767BCTs ) may:
- help retire the KC-135s even sooner
- help increase demand for a B-787F
- free up some KC-45As for helping the
C-5s and C-17s haul freight and people
CRS Report For Congress
"Air Force Air Refueling:
The KC-X Aircraft Acquisition Program"
Updated April 4, 2008
http://opencrs.com/document/RL34398/2008-04-04%2000:00:00
Page CRS-32,
"Convert Used Commercial Aircraft into Tankers"
"... with distinct caveats — ... purchasing
used aircraft may merit additional study.
... purchasing used aircraft as tankers is
“generally not as cost effective”
(as purchasing new aircraft),
but “...close enough in estimated cost
to not exclude it from competition.” "
Thank you,
Eddie Maddox
Inwood IA USA
Posted on July 3, 2008 22:42
In supports of Roger's posting on 29th June:
Some interesting points from Boeing's own website:
http://www.boeing.com/commercial/facilities/index.html
on the 'Boeing 747, 767, 777 And 787 Manufacturing Site' tab
"As Boeing's largest site, Everett also is home to hundreds of employees who work in the Global Partners organization, which is responsible for contracting with and managing Commercial Airplanes external suppliers, as well as several internal airplane components suppliers that build airplane interiors, electrical systems and commercial electronics"
and
"Each day, parts and subassemblies come to the plant from all over the globe. More than a thousand suppliers ship components by truck, rail, air and ship from throughout the world and all 50 states."
It seems the 767 isn't the pure American, Stars and Stripes painted, Mom's apple pie loving airplane and actually, shock horror, contains elements built by those pesky foreigners!
Posted on July 10, 2008 08:05
Yung UK
Dear Mike,(UK)
You're obviously very bias towards EADS/Airbus.
The B767 may have components from around the world, but the design work is done by American engineers.
Posted on July 12, 2008 00:42
" Last thing we need is the USAF flying a french aircraft."
We agree with you CM why not.
Frank and Ancast.
Posted on July 24, 2008 09:21
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