The U.S. Department of Defense on Wednesday canceled a $35 billion air tanker competition between Boeing Co. and Northrop Grumman Corp., essentially postponing the decision until the next presidential administration.
The decision will give the next administration full responsibility to determine the requirements, the evaluation criteria and the budget decisions involved in competition, the Pentagon said in a statement.
Boeing issued a statement Wednesday saying it welcomes the Defense Department’s decision and believes that it will best serve the warfighter by giving the appropriate time to conduct a thorough and open competition. The company said “This will assure delivery of the right tanker to the Air Force and serve the best interests of the American taxpayer.”
Boeing said it looks forward to working together with the the U.S. Air Force and then offering a next-generation tanker that meets the long-term requirements of the men and women who will fly this aircraft in future missions. In the meantime, the Boeing team will continue to support the Air Force in keeping the current KC-135 fleet flying its missions safely and reliably.
In a statement, Defense Secretary Robert Gates said the contest had become too emotional and complex to be decided before the Bush administration leaves office in January.
“It is my judgment that in the time remaining to us, we can no longer complete a competition that would be viewed as fair and objective in this highly charged environment,” Gates said. “The resulting ‘cooling off’ period will allow the next administration to review objectively the military requirements and craft a new acquisition strategy for the KC-X.”
The Pentagon also said that any contract award would have faced possible protests by the losing bidder.
“Over the past seven years the process has become enormously complex and emotional - in no small part because of mistakes and missteps along the way by the Department of Defense,” Gates said.
Pentagon officials concluded that the current fleet of KC-135 tankers could be maintained to meet Air Force needs for the near future, and would request funding in the fiscal 2009 budget and “follow-on budgets” for that purpose, the statement said.
Atom
Comments (4)
Good thing. Time to get thrifty after 2008 saw the American taxpayer buy one investment bank and two giant mortgage lenders.
Posted on September 10, 2008 19:11
After much heated discussions regarding this contract and much negative comments coming from Northrop and their supporters, I would just like to say that it is time to take a step back and realize how much this RFP was not handled properly.
We as a country need to stay connected and work together.
The only solution with this contract now is to share this opportunity with Boeing and Northrop and keep our country working together to build the best military planes and equipment for ourselves.
We do not need to build anymore new plants and facilities when Boeing already has them.
We need our jobs and taxpayers money to stay here at home.
I just hope that someone in Washington realizes this soon rather than later.
Take a good look at this country now and what is going on and everyone maybe needs to realize that Northrop and Boeing can work together and keep our country moving in the best direction.
Posted on September 12, 2008 09:03
Recent report:
Washington Post 09/18/2008
Author: Dana Hedgpeth
Copyright 2008, The Washington Post Co. All Rights Reserved
The Pentagon's top weapons buyer said the proposed aerial refueling tankers from both Northrop Grumman and Boeing were "technically outstanding" but differed by almost $3 billion on price.
John Young, the undersecretary for acquisition, technology and logistics, said in an interview at the Pentagon yesterday that under the tanker proposal from Northrop Grumman and its partner European Aeronautic Defence & Space, developing the first 68 aircraft would have cost $12.5 billion, compared with $15.4 billion under Boeing's plan.
It was the first time Young or any top official at the Pentagon has talked in detail about the long-running, $40 billion tanker deal since Defense Secretary Robert M. Gates said last week that the competition would be punted to the next administration because it had become so politically charged.
Young said that Northrop promised earlier delivery and that its aircraft "provided more tanker capability and offload rate and was substantially cheaper to develop."
"Frankly," he 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.
Now that the information is public knowledge...
I would have to ask.. How can Boeing's proposal of a smaller aircraft than that of the competitor be costing our customers so much more? That $3 billion difference is a big eye opener. If the Air Force is going to be looking at prices like this, then of course they would like the lower price.
Posted on September 18, 2008 11:35
Ron B,
By the Boeing bid being closer to reality.
Airbus/EADS are notorious for low-bidding & making up the difference on the back end.
The NG/EADS proposed KC-30 is closer to the Australian KC-30B than the KC-767AT is to the Italian & Japanese KC-767s so less developement work.
The BIG question however is does the quoted $15.4 billion for Boeing include the mathematical errors &/or the $5.2 billion the KC-X source selection team added to Boeing's bid that were incorrectly gave the KC-30 a lower MPLCC?
Of course this ignors that what is important is the TOTAL life-cycle costs where over the 40 year projected life of the KC-X could be tens of billions of dollars LESS with the KC-767AT than with the KC-30. In fact the DIFFERENCE could be as high or higher than the projected $35-40 billion developement & procurement costs!
Posted on September 22, 2008 12:25
We welcome your comments. However all comments are moderated and may not post immediately. Offensive or off-topic comments will not be posted. We will not treat any comments you submit as confidential information. Please do not submit comments that contain any confidential information belonging to anyone else.
By submitting a comment to Tanker Facts, you agree to our site terms and privacy policy, and to having your name displayed with your comment. All or part of your comment may be posted or cited in the blog. Your name and personal information will not be used for any other purpose, and we will not publish your e-mail address.