Wednesday, July 9, 2008

DoD to Recompete Tanker Contract

Congressional notifications of DoD's way ahead on the Air Force tanker contract are ongoing.

First indications are that DoD has decided to have an "Expedited Recompete"; no details as of yet. Sounds like Option A that we mentioned last week.

More to come.......


Anonymous said...

A. Request Boeing and NG/EADS submit immediate new best and final offers under the original or only slightly revised RFP.

Slightly revised! From all the hype I thought it was major issues. Gates tossed out the WTO issue and american jobs aswell not that the 767 or 777 could even be less than a Boeing/Aeronovali/JADC tanker anyway! Round three Boeing will lose again, protest again and delay even more...

wakeupamerican said...

Finally DOD doing the right thing.

Anonymous said...

The devil, as always, is in the details. If this is rebid using the original RFP and fairly scored, Boeing wins. It's got the only MEDIUM tanker in the competition.

If the RFP is "slightly changed" to make it in to a HEAVY tanker RFP, Boeing and its allies are going to immediately cry foul, and demand a total do-over so they can have the time to come up with a KC-777 option.

My best guess? The Air Force has screwed this up twice and the DOD is tired of hearing about it. They are going to compete it with very close to the original RFP and award it to Boeing. That's the only option that will let them get this decision settled this decade.

Anonymous said...

What a difference a few months makes. In more ways than one. On the 29th of February when EADS was announced as the winner, the Euro was worth about $1.50. Right now, it's worth $1.58. Way back when EADS put their bid in, the Euro was worth a little under $1.37.

So what does that mean? Everything else being equal, the work done in EU countries (notwithstanding the N-G hype, the vast majority of the EADS work) has increased in cost by 15% just because of currency exchange rates.

This has been killing Airbus, selling planes in dollars while most of their costs are in Euros. Unless they are willing to take a loss to get this contract, they are going to have to raise their bid dramatically (in dollars), just to come out where they were six months ago.

Given that they weren't the low bodder last time (once the USAF arithmetic errors were discovered), this does not bode well for the N-G entry.