Tuesday, June 24, 2008

Tanker News 24 June

The following tanker related articles caught our eye:

Forbes: EADS In Lead For Saudi/Iraq Fence
Key passage:
Last week's report by the General Accounting Office, which criticized the process by which the fuel-tanker contract was awarded to EADS and its partner Northrop Grumman, has thrown it into doubt and it's likely that the Air Force will have to ask the companies to resubmit their proposals.

If they do go back to the drawing board there is no chance whatsoever that EADS will get the entire contract: a more likely scenario is that they will get around 25.0% of it according to Doug McVitie of Arran Aerospace.
Mr. McVitie is a former Director of Sales Intelligence for Airbus so he has some G-2 on the situation, but it would be interesting to know how he came up with 25%. Most likely this is the percentage Airbus is willing to settle for and needs to be able to set up the assembly facility in Mobile.

Politico: Air Force considers Northrop, Boeing fly-off
Key passage:
The fly-off option, which departing Air Force Secretary Michael Wynne discussed with the Reuters news service at his retirement ceremony, and the split buy are costly prospects. The fly-off would require the two companies to build planes through the prototype stage, and under the split buy, the Defense Department would have to fund two production lines...

Supporters of Northrop are pushing for a speedy reconsideration by the Air Force — and trying to ensure that members of Congress don’t step in to steer the process toward Boeing.

The company is stressing that it hasn’t lost anything yet.
Split buy, fly-off, or rebid there is no easy way out of this tanker war. We are beginning to see the KC-30 team stress that the GAO decision does not mean that their tanker should not have won, only the way the Air Force went about it was flawed. This is rather convoluted logic, but without the full GOA decision it is hard to definitely refute at this time. Also, if one believes possession is 9/10 th's of the law, an argument could be made that until the Air Force completes the rebid, the KC-30 team still has the contract.

Human Events: How to Buy the Tanker
Key Passage:
The government is supposed to buy what it needs, not what it wants. And – in the case of combat systems, among which the tanker is certainly counted – the needs have to be defined by the warfighters. The government’s request for contractor proposals is supposed to define those needs in terms specific enough to enable the contractors to compete by offering the aircraft that best meets the precise need. But the Air Force -- bowing to political pressure -- crafted a specification so vague that two vastly different aircraft could arguably qualify under it.
Listing this article at the end is in keeping with the spirit of saving the best for last. Once again Mr. Babin offers great insight and expertise in dissecting the Air Force tanker contract decision

1 comment:

Aurora said...

With respect to the notion of a "fly off", I left these comments on Leeham News & Comments. They are germane here a well:

"If memory serves, the last fly off the USAF conducted with logistic aircraft was the YC-14 & YC-15. When it was over, they didn’t buy either!

I am skeptical that a fly off would accomplish anything other than to delay the program by a few more years. The model KC-767 that Boeing bid is not even flying yet, so any putative fly off would involve a significant wait even if they didn’t go with a completely new rebid. A new RFP + fly off would confound this process to the point where they might as well jump straight to KC-Y. I can’t understand why this was floated by the outgoing AF Secretary, when anything of this magnitude will need to be approved by the new administration."