Reuters, in what they liberally call an exclusive, reports what Tanker War Blog readers already knew two days ago; that the Air Force has conceded that their calculations on Life Cycle Cost were incorrect.The article did report that Air Force documents initially put Northrop's life cycle cost at $108.01 billion versus $108.44 billion for the Boeing plane, a difference of $34 million. But, Reuters was not able to uncover the corrected amounts. (As an alert reader points out in the comments below, Reuters also seems to have a math problem: The above original cost number for Boeing should read $180.044 billion)
In the article Reuters also reports that:
If the KC-30 team and DoD thought that the initial cost/price results were a "dead heat" then why did they both stress that Boeing's proposal was more costly in statements to the press and in communications with Congress. As Boeing's Agency Report Comments state on page 108:During the protest review, the Air Force discovered five errors in the life cycle computation, which caused a slight adjustment in the operating costs of the two aircraft, Northrop said. But the initial results were "a dead heat" and remained essentially the same, even after the adjustments, it said.
Indeed, even after the Air Force made its [math error] concession, the Pentagon's top acquisition official, Under Secretary of Defense for Acquisition, Technology and Logistics John Young, lectured Congress that the KC-767 would entail substantially greater cost: "If I am going to demand that certain companies or proposals must win regardless of what they cost, I am going to disadvantage the taxpayer and war fighter. I am going to deliver (a weapon with) less capability for more cost."
The Air Force admits to five errors but the GAO still has to rule on the many others they do not admit.
Also, CNBC's Jane Wells has a good TV story on the error.
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