Boeing: We was robbed … after we robbed others!
posted at 7:39 am on March 11, 2008 by Ed Morrissey
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Boeing will file a protest over the award of a large Air Force tanker contract to Northrop/EADS. The appeal to the Government Accounting Office doesn’t come as a complete shock, as several members of Congress had openly supported such a move. In government contracting, however, the move is rare — and it shows the stakes involved for Boeing:
Boeing Co. said it plans to protest the Air Force’s decision to award a $40 billion contract for aerial refueling tankers to a team comprising Northrop Grumman Corp. and the parent company of rival Airbus.
The move sets up a protracted political fight over the use of foreign contractors for U.S. military jobs.
Boeing said it will file a formal protest today for the first time this decade, asking the Government Accountability Office to review the Air Force’s decision to give the contract to Northrop and European Aeronautic Defence & Space Co. …
The decision to go with a European-designed Airbus A330 jet, rather than Boeing’s 767 model, has set off a contentious debate over whether U.S. jobs will be sacrificed as a result. Boeing’s supporters in Congress have gone on the attack against the Air Force decision.
Appeals occur only rarely because of the nature of the relationships between the contractors and their clients. Companies like Boeing cultivate those relationships with procurement executives in the military branches and the government bureaus that decide on bids, just as any sales organization would. In defense contracting especially, there has been a historical understanding that companies will get their share of prime contracts as long as they play ball and don’t make waves that will embarrass their clients. Contractors who want to keep their relationships healthy don’t try to make their clients look bad by filing grievances against them.
Moreover, the GAO rarely reverses contract awards on appeal. Unless they find clear malfeasance or misrepresentation by either the customer or the winning bidder, the GAO assumes the customer understands their own needs best. Most contracts don’t have the political exposure that this tanker contract has acquired, however, and the GAO may feel some pressure to use a lower bar for action.
On what basis will Boeing appeal? They will focus on technical issues in the bid process, almost certainly. Boeing claims that the Air Force improperly changed the parameters of the competition to favor Northrop, and they may have a point:
In a highly risky move, Northrop threatened at one point to pull out of the competition if the Air Force didn’t change the way the aircraft would be evaluated. The demand paid off.
“Boeing allowed Northrop to skillfully shape the criteria for selecting the winning plane,” said Loren B. Thompson, a defense policy analyst who closely followed the tanker competition. “In particular they allowed Northrop to shape a scenario that made its larger plane more appealing.”
The Air Force needed a competition mainly because their initial attempt to simply lease 767s from Boeing came under fire from John McCain. He highlighted the deal as an example of unfair procurement practices — and as it turned out, he was correct. The deal resulted in criminal convictions for two Boeing executives, and it makes Boeing’s appeal something less than high-minded: the convictions came because Boeing had enticed an Air Force procurement official to game the contracting process in their favor.
Northrop forced an already-embarrassed Air Force to rethink the parameters of the contract, and that put Boeing at a disadvantage. Boeing has a point about the rules changing in the middle of the game, but in large part, they created the environment in which that could happen. It also allowed the Air Force to reconsider the application of the tanker for missions in the Pacific Rim, where fewer airfields requires larger-capacity tankers, and Northrop’s offering may make more sense.
Meanwhile, the politicians fulminate about the award going to an outside firm. The time to consider that question was at the RFP stage, not the award stage. If the government didn’t want the contract to go to a European firm, it shouldn’t have allowed EADS to bid on it. And if the US wants to compete in the European market, it can’t act protectionist here.
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Not so bad really. Should make Seattle happy. After all, Boeing is so mean and bellicose. I remember, decades ago, when bad news for Boeing was greeted with terrible dismay in Washington. It’s amazing how much can change in one’s lifetime.
JiangxiDad on March 11, 2008 at 7:49 AM
Shaping the RFQ (request for quotation) is nothing new. It happens a lot in the real world.
When a company for some reason wants to get some product/service from a specific vendor, they will skew the requirements in such a way that no other vendor’s product matches. That way they can get the results they want, by having an “open” bid.
It’s just like what happens when a company hires a foreign national (non-citizen) and wants to offer a green card. They have to put out a job listing for the position and see of a citizen (or other gree card holder) can fill it. They taylor the job requirements so it is almost impossible for anyone except the existing candidate to fill it.
Note that I am not commenting on the appropriateness for the US to outsource the airplanes to a foreign company; only commenting about the process itself.
chrissv on March 11, 2008 at 7:50 AM
I just want my air support to have the best tanker available to keep them on station. If Boeing can show they have a better plane at a better price - fine. I suspect they cannot, and throwing a public hissy to set the stage for future work to be steered to them.
major john on March 11, 2008 at 7:54 AM
The congressional libtards are concerned about the loss of jobs if Northrop gets the bid. What they actually mean is the “loss of union jobs at Boeing” since the Northrop bid involves creating new, non-union jobs in AL….shocker!
David in ATL on March 11, 2008 at 7:57 AM
Call me crazy but instead of changing (admittedly unfair) rules to favor foreign companies for U.S. military contracts isn’t the way we should be going. There are plenty of smaller U.S. aviation/areospace companies that could be awarded those contracts. There is also Lockheed Martin. I’m uncomfortable with the thought of foreign companies (even if factories are located here) providing these services for OUR military (anyone remember what Toshiba did with our sub technology in the eighties?)
srhoades on March 11, 2008 at 8:05 AM
Boeing is getting their just deserts after backing that horrible idea of LEASING aircraft that we will keep in our inventory for at least 25 years. That plan made KBR look like Ronald McDonald House.
BohicaTwentyTwo on March 11, 2008 at 8:14 AM
First you say “they needed to allow open bids” but then you say “they shouldn’t allowed EADS to bid on it.” Does not compute El Capitan. The only realistic options were Boeing vs. EADS. There’s nobody else left.
Everything about “maintaining relationships” kind of goes out the window when there are only two potential suppliers. It’s win/loss, not “everybody will get a piece of the pie.”
Lastly, you’re right in that some Boeing executives actly wrongly in the first tank go round, and they deservedly went to jail. That’s not justification for punishing the regular Americans who are out jobs so we can send our tax dollars to France.
e-pirate on March 11, 2008 at 8:14 AM
The Northrop/EADS deal will result in more than 50% of the plane’s total value being built overseas. This is a violation of the Buy-America act. Having a foreign government (the EU, France, Germany) have a say in the ability to use and maintain a critical strategic asset is not just stupid, it’s suicidal: They could decide that they just won’t provide some critical part that the US cannot quickly replace (the Brits did this to the Israelis, rendering their F4 fighters unusable, by not selling them replacement life-limited parts for ejection seats).
As a former USAF fighter pilot, having more tankers in the pool is a good thing. More tankers will cost more, require more crews, more maintenance, etc … but results in more availability. Boeing does, in fact, have larger airframes (777) that could be used for a larger tanker.
And while McCain may have been correct in his assessment of the tanker deal, he utterly failed to take any leadership to get tankers to replace them. He just doesn’t seem to understand the results of his temper tantrum.
The Navy isn’t able to refuel it’s own aircraft to allow them to sortie long distances (like the Persian Gulf to Afghanistan) and the aircraft lack the range to fly combat missions on their own…the USAF has to provide tankers to support the USN to allow the USN to do anything with air other than their original oceanic/littoral role.
HBowmanMD on March 11, 2008 at 8:23 AM
Evidently, Boeing had cleaned house before this bid. If Boeing’s was anywhere near the EADS bid, domestic should always trump foreign awards BECAUSE OF THE ECONOMY and also the ability to produce our own SELF DEFENSE. Geez, what a cess pool we’re stuck with–domestic business corruption ruining their own business as well as our economy and our national defense. Damn Boeing for not being more competitive! You know who’s building shit over in France: world invasive Muslims who are not happy with life in France. That’s just great! Whenever outsourcing occurs, quality control flies out the window. It’s hard enough to police ourselves, impossible to oversee the know it all French socialists, and forget trying to deal with Muslims who have their own imbedded agenda.
maverick muse on March 11, 2008 at 8:42 AM
In defense contracting especially, there has been a historical understanding that companies will get their share of prime contracts as long as they play ball and don’t make waves that will embarrass their clients.
Yes, and their is MORE tanker business coming down the pike. Boeing will undoubtedly get that business, but is being greedy now and trying to get it all.
Boeing claims that the Air Force improperly changed the parameters of the competition to favor Northrop, and they may have a point:
Nope. Any changes happened early in the process, before the RFP was issued.
Boeing has a point about the rules changing in the middle of the game, but in large part, they created the environment in which that could happen.
No, the rules were understood at the beginning of the game, they did not change in the middle.
Lehuster on March 11, 2008 at 8:43 AM
IIRC it wasn’t like the change occured last month or something. It occured at last a year ago, right? That should b plenty of time to cope.
Just sounds to me like Boeing is too used to getting its own way.
amkun on March 11, 2008 at 8:44 AM
This is ridiculous. Congress makes the rules with regards to government procurement processes.
They have not made any substantive points as far as the process not being properly followed.
If they want to exclude competitors with foreign ties then do so at the beginning of the process. To make these companies spend time, effort and money on RFPs that are going to be rejected for political reasons, makes no sense whatsoever.
This is another symptom of how it is impossible for the Democrats in Congress to govern. They blow in the political winds and boy, do they blow hard.
NoDonkey on March 11, 2008 at 8:46 AM
Everything about “maintaining relationships” kind of goes out the window when there are only two potential suppliers. It’s win/loss, not “everybody will get a piece of the pie.”
Both Boeing and Northrop will get some tanker pie, unless Boeing wins this protest. If Northrop is shut out, they won’t bid on the future tanker work, and Boeing will have it all. Gee, ya think that’s why Boeing is protesting, so they can eliminate the competition up front?
That’s not justification for punishing the regular Americans who are out jobs so we can send our tax dollars to France.
Alabama is in France now?
The majority of the Northrop tanker will be built here (and some of the 767 is made overseas. Also, keep in mind that even larger than the procurement contract is future operations and maintenance. The KC-45A will be serviced and maintained in America, by Americans, so there is little reason to get hot under the collar.
Lehuster on March 11, 2008 at 8:47 AM
Jobs will go to Alabama. Profits will go to France. Not quite as bad as it could be, but all the dollars don’t stay in the US.
Profits from the much larger O&M portion will also go to France.
James on March 11, 2008 at 8:55 AM
Gee, another example of how the “Maverick” is clearly the best man to lead the United States in a time of out of control spending, and shady behavior by people in position of power. Conservative or no conservative, he’s no punk pundit who gets his marching orders from anyone.
THE CHOSEN ONE on March 11, 2008 at 9:24 AM
I have little sympathy for Boeing. The criminal lease deal, the tens of billions of dollars wasted on the non-working “virtual” border fence — this company has a long history of ripping off the U.S. taxpayer.
AZCoyote on March 11, 2008 at 9:27 AM
Previous scandal regarding the USAF and Boeing has come home to roost.
Now, Boeing must just get past it and focus on beating Airbus in commercial airliner production.
MSGTAS on March 11, 2008 at 9:37 AM
Two things here:
– If you complain about pork-barrel earmarks and wasteful government spending, it seems as though you’re going to have a hard time defending Boeing on the absolute merits here, unless you’re willing to treat them as not just being “too big to fail”, but as “too big to punish” in any way, shape or form for their previous effort to both rig the bidding and in trying to shoehorn the USAF into taking their parameters on the design of the tanker.
– I know Sarkozy is not the favorite French leader on the Democratic side of the political aisle, and, given France’s habits, they’re likely to move back towards a leader more in the Chriac mode before the contract is finished, but anyone who thinks the Democrats in Congress are mad about a defense contract going to Europe is delusional. The unions who support Democrats are mad, but what the politicians see right now is a chance to protest the shift of jobs from a Blue State that they potentially could lose in November to a Red State they have no hope of winning unless McCain spends the entire summer and fall trying to anger conservatives.
Polls show McCain within striking distance in Washington State, so this sudden anger over a defense contract is more about shoring up Washington for Hillary and Obama than about any concern over whether a foreign or domestic company heads up the project (and if the payoff was right, a President Hillary wouldn’t care if the next generation of fighter jets was built in China, as long as the quid pro quo campaign donations went to right bank accounts).
jon1979 on March 11, 2008 at 9:40 AM
All this talk about “RFPs”, technical merits is irrelevant.
Boeing has decided to make this a POLITICAL issue. They and the Dems in Congress are going to insert this into the presidentical campaign. Here’s how they’ll do it.
They’ll lie about it until their lies become “conventional wisdom”. They’ll push every protectionist button and ignore any contradictions (better relations with our allies? HA!).
Then—once they’ve stirred up sufficient controversy—they’ll demand that any final decision be left until the next administration—and Americans will say that sounds reasonable.
That’s the game plan, I feel sure. Boeing can’t win on a technical objection. This is headed for the political arena.
jeanneb on March 11, 2008 at 9:48 AM
Jobs will go to Alabama. Profits will go to France. Not quite as bad as it could be, but all the dollars don’t stay in the US.
Not all the profits of the KC-767 would stay in the US, either!
The vast majority of the KC-45A dollars would, in fact, stay in the US.
If this even matters.
Lehuster on March 11, 2008 at 9:49 AM
“Then—once they’ve stirred up sufficient controversy—they’ll demand that any final decision be left until the next administration—and Americans will say that sounds reasonable.
That’s the game plan, I feel sure. Boeing can’t win on a technical objection. This is headed for the political arena.”
This is the kind of idiocy which clearly illustrates why Democrats cannot govern.
There are no clear rules now. Any decision blows in the political winds.
How can this country be competitive by doing this? Why would overseas businesses want to do business here, much less domestic business, when Democrats are completely arbitrary, and can easily be corrupted.
I said it in 2006 and I’ll say it again - anyone who votes for a Democrat at any level in 2008 is a complete idiot.
NoDonkey on March 11, 2008 at 9:53 AM
If greater capacity and endurance were a criteria in the RFP Boeing has no argument. If they were not they should not have been a significant factor in the contract award as they appear to have been.
duff65 on March 11, 2008 at 10:01 AM
I’m a mail carrier. The post office has 17 zillion crappy Ford minivans for us to drive. Sure, it provides American jobs, but I personally would rather drive a Honda minivan at work, like the Honda minivan I own.
I don’t owe anything to Detroit…or Seattle.
jgapinoy on March 11, 2008 at 10:05 AM
I have little sympathy for Boeing. The criminal lease deal, the tens of billions of dollars wasted on the non-working “virtual” border fence — this company has a long history of ripping off the U.S. taxpayer.
AZCoyote on March 11, 2008 at 9:27 Am
I bet for every dollar we spent with these crooks, we only got 45 cents back. If that.
THE CHOSEN ONE on March 11, 2008 at 10:19 AM
Jeanneb, you’re right, and they’re already starting to do this. The Dem legislators from WA and KS have been all over the news complaining about this, and Pelosi has already tried to blame McCain for it.
http://www.ft.com/cms/s/0/beab3936-ebe8-11dc-9493-0000779fd2ac.html
juliesa on March 11, 2008 at 10:19 AM
If you would, please define the term ‘vast majority’ for me, in relation to the term ‘not all.’
Your statements could be correct, but I do doubt that (’all’ - ‘not all’) is smaller than ‘vast majority’ when the parent company is a US firm.
James on March 11, 2008 at 10:21 AM
Sorry, it’s more correct to say the *Republican* legislators from WA and KS are protesting this, while Pelosi and Rahm Emmanuel try to make it a campaign issue for McCain by blaming him for it.
juliesa on March 11, 2008 at 10:28 AM
Sorry, Ed, but this is flawed circular logic. Boeing lost the contract, THEN ONLY AFTER, filed the complaint. You can’t use something that happened after the fact to rationalize our government’s decision prior (or Boeing’s argument as a whole for that matter).
Respectfully,
Buck
bucktowndusty on March 11, 2008 at 10:28 AM
I’m divided about this. The United States can use the jobs the contract would have brought but the military can also needs the best planes at a cost effective price.
TooTall on March 11, 2008 at 10:48 AM
One other (very important) factor in favor of the Airbus tanker: Boeing is about to shut down the 767 assembly line. So they would build these tankers and then close the line. That means that if the AF needed more tankers in 5 or 10 years it would be a different plane, and that spare parts could be difficult to come by down the road.
Yep.
funky chicken on March 11, 2008 at 11:12 AM
Ah, not exactly.
It takes about thirty years to build all the tankers the Air Force needs, so the line would be open that whole time with plenty of spares available (parts and maintenance commitments come with the airplane).
Without demand for the commercial 767 anymore, problems and poor sales of the KC-767 export and now no tanker contract, then Boeing will indeed shut the line down. The domestic tanker contract was the only reason they were keeping it open.
Et tu Brute on March 11, 2008 at 11:30 AM
Et tu Brute on March 11, 2008
NO. Wasn’t gonna happen. My husband is an AF pilot, studied the deal. Boeing wasn’t gonna keep that line open for 30 years.
funky chicken on March 11, 2008 at 11:33 AM
So the KC-45 gets delayed at least another year, while decrepit KC-135’s continue to rot in the air around their crewmembers’ ears. It’s only a matter of time before a crew is killed, and a minor miracle that it hasn’t happened already. The need for a replacement was urgent five years ago–now it’s absolutely desperate. We’re well past the point of being able to safely debate the nuances of which supplier provides the more politically correct plane. If EADS can produce the best available solution starting right now (and from everything I’ve read its aircraft is indeed superior to the Boeing 767 offering in virtually every operational respect), it’s the right answer–even if, in another 2-5 years, Boeing actually could hammer the 777 into something equivalent, or for that matter better. The KC-135 fleet is already out of time.
Blacklake on March 11, 2008 at 11:34 AM
A330s a better plane, better deal for the AF. But Boeing is going to spend more of your tax dollars and mine on this appeal. Fuck ‘em.
It’s better for the country to have factory capacity here in the patriotic South than in the moonbat Seattle corridor also.
win-win!
funky chicken on March 11, 2008 at 11:34 AM
“It’s better for the country to have factory capacity here in the patriotic South than in the moonbat Seattle corridor also.”
Absolutely. Especially since production won’t hinge on the whims of the gold bricking unions and their mafia capo heads.
Both of which contribute bucket loads of cash to the absolutely worthless Democrat Party, which is a third evil.
NoDonkey on March 11, 2008 at 11:38 AM
The US will still get essentially the same number of jobs. Those involving airframe assembly will just be in Alabama, not Seattle. And while I can’t track down precisely where they will be manufactured (likely not a single site, anyway), the engines will be members of the General Electric GE90 family, and GE is American (though it does operate engine plants in other countries).
Blacklake on March 11, 2008 at 11:45 AM
Absolutely. Johnny Mac has better economic sense than most so-called conservatives. He will cut spending, reduce the deficit, and get this nation back on the track to recovery.
McCain 2008.
Pax americana on March 11, 2008 at 11:51 AM
Boeing was trotting out the old(15+ yrs) airframe of the 767. They have even dropped the latest upgrade, 767-ER, to concentrate on the 787, which is several years behind schedule. I say let’s see if Airbus has near the delays and cost over-runs as others are so prone to have.
Tom
marinetbryant on March 11, 2008 at 12:06 PM
Really gotta wonder about Boeing sometimes. They seem to lose out to NG at every turn..
Reaps on March 11, 2008 at 12:07 PM
In 30 years there’s no guarantee that scarebus will be building A330’s, so that argument is at best specious.
And the jobs in Alabama will not be aircraft assembly, they will be in finishing. The planes will be built in Europe - more than 50%. The majority of the jobs, the profits and the skills will be there.
HBowmanMD on March 11, 2008 at 12:11 PM
MSM article here, and one that was trying to criticize McCain, so consider the source. But I think this last part tries to make the case that Airbus can only offer the plane at the lower price, this winning the contract, because it receives European subsidies? Which means that Europeans are helping us purchase tankers by subidizing Airbus? Thanks guys! It’s about damn time. LOL
funky chicken on March 11, 2008 at 12:14 PM
So European subsidies are helping to keep our procurement costs down? Sounds good to me.
funky chicken on March 11, 2008 at 12:17 PM
Pax americana on March 11, 2008 at 11:51 AM
It’s a shame we live in a time when cutting spending, not trying to round up 40 million illegals, and putting your political security to the side in order to win a war are “MAVERICK” positions.
THE CHOSEN ONE on March 11, 2008 at 12:22 PM
There sure is a lot of misinformation here…..
1) 767 vs A330. Both are “older” airplanes of the same generation. You cannot blast the 767 for being an old airplane without making the same claim of the A330, which was Airbus’s direct 767 competitor. Both airplanes, however, are refreshed, and are “new”.
2) Both airplanes will have both foreign and domestic parts. The 767 is about 85% domestic, the A330 will be about 60% domestic. Both will create (and/or retain jobs). The Boeing deal, however, would create/retain MORE US jobs.
3) The previous contract, for which Boeing is being blasted, included the leasing of planes to the USAF. Although this is not normal with gov’t contracts, this is very normal in the commercial industry. The USAF wanted planes, but didn’t know how to pay for them since Congress did not provide adequate funding. Boeing and the USAF together came up with this very public financing proposal.
4) There was inappropriate collusion between a Boeing Executive and a USAF officer, both for personal gain. Both parties went to jail. Boeing cleaned house, including CEO, and subjected ALL executives and employees (down to janitors) to ethics training. The USAF also cleaned house. Boeing is now setting the standard for US Corporate ethical behavior. Should we now continue to punish the innocent employees and shareholders?
Seabecker on March 11, 2008 at 12:47 PM
“Should we now continue to punish the innocent employees and shareholders?”
I followed you up to this point, but who exactly is punishing anyone?
Sounds to me like the process was followed and Boeing lost, fair and square. Is there any indication that Boeing is being punished?
My concern is that if this is reversed, it has implications far beyond this contract. If Congress is going to start meddling after the process that they set forth doesn’t get Congress the results they want politically, it’s going to make a complete mess of government acquisitions and will cost taxpayers bundles of money down the line.
NoDonkey on March 11, 2008 at 1:28 PM
Actually, that’s also not entirely correct.
With all due respect to your husband, if Boeing had won the contract, they would have needed at least 15 years to fulfill the initial order of 179 planes. Which coincides with the current proposal:
After that, consider another 20 years or more to complete the total order of approximately 500 planes.
While it may be possible that Boeing could’ve closed the line after the initial 179 planes had met their contractual commitment, it is unlikely that Boeing would risk jeopardizing their original proposal by forcing the AF to purchase a new plane mid contract.
Not to mention the legal grounds Northrop would have to cry foul if Boeing switched planes mid contract.
Also, Boeing is specifically holding the line open for the new tanker. An article from the Seattle PI from last year:
Boeing has an order from UPS for 27 planes plus a backlog of 28 unbuilt planes that will ensure the line stays open until 2012. That comes out to an average of 14 planes per year.
So yes, it would take over thirty years to fulfill an entire order of 500 planes.
Et tu Brute on March 11, 2008 at 1:34 PM
Small correction there: The Boeing plane will be closer to 70% domestic built, according to Boeing’s own union reps.
Also, Northrop revised their job creation figures to 48,000 domestic jobs across the country, more than Boeing’s estimate.
Et tu Brute on March 11, 2008 at 1:42 PM
One key TACTICAL problem that most posters overlook.
AT Max load, the A330 needs a 7300 ft runway…
767ER? 5600 ft…
So, the 767 can fly off a LOT more airfeilds throughout the world.. Airfields in… say… Afganistan? or Iraq? or around the Pacific rim?
During the last Quadranial Force Review it was decided that we needed to get more portable, not less… we needed to be able to deploy to third world countries FASTER… choosing the A330 takes us the opposite direction…
But then, the Air Force has always had a BIG plane mentality.
Romeo13 on March 11, 2008 at 1:45 PM
Great article on this issue:
To Die for NAFTA
bucktowndusty on March 11, 2008 at 1:46 PM
Seabecker on March 11, 2008 at 12:47 PM
Well said!
Has anyone else noticed how every media outlet which has covered this story insists on calling the bid winner
Northrop/EADS as if Northrop were the prime contractor (NOT). This is just another example of inducted spin applied by the Euro-loving media.
Least we forget the Marine One presidential helicopter replacement bid. This contract was won by yet another EADS partner (this time) fronted by Lockheed, AgustaWestland/EADS won the bid over Sikorsky. There are many striking similarities in how this airframe was chosen over the Sikorsky. Now this program is in a terrible mess, schedules have slipped, performance metrics continue to watered down, etc. As for those who argue about business competition and technical merit, please review the histories and timelines for both programs. The pentagon has bent over and spread for EADS multiple times all in the name of political correctness and some miss guided belief that the EU is a business partner, not a competitor.
dmann on March 11, 2008 at 2:00 PM
“The pentagon has bent over and spread for EADS multiple times all in the name of political correctness and some miss guided belief that the EU is a business partner, not a competitor.”
That doesn’t make sense. Who is alleging that the process was not followed?
If the process is flawed, that’s another matter, but who is in charge of the policy that leads to the process? Congress, not the Pentagon.
If the Pentagon did not follow the proper process, then Congress has a role.
If the Pentagon followed the process, then Congress needs to STFU and THEN re-do the process, if they want. Changing them after the game has been played is clearly wrong and sets a precedent for complete chaos.
NoDonkey on March 11, 2008 at 2:05 PM
Yeah, no foul on the stick-actuator, but I’d rather hear from an acquisition specialist, or at least the wife of one…heck, I have a better connection to the acquisitions process than an end-user does and all I do is ensure the parts get cataloged correctly.
This is a multi-decade, full life cycle contract as opposed to the lease, which probably would’ve been PBL/CLS.
James on March 11, 2008 at 2:07 PM
At issue is whether or not the USAF changed the requirements for the tanker during the bid process. I know that some here have asserted that such a “changing the rules mid-game” did not take place. It’s Boeing’s assertion that it did.
Regarding the 777 vs 767 issue, Boeing supposedly offered the 777 and a tanker version of the 787 (pre-development, EXACTLY like what was done for the 707 and the KC-135) for sale to the Air Force, and the Air Force told Boeing not to even bother submitting either plane. Boeing’s claim of rules-changing is that after they were told “don’t bother” with the more recent planes, is when the greater range and tanking requirements were added, making the 767 bid instantly uncompetitive. Given the odor Boeing earned with the Air Force from the leasing deal, Boeing followed exactly what they were told to do and submitted the 767, where the Airbus promptly demolished it.
Any investigation should focus on whether Boeing was given the updated requirements, and when the final updates were implemented. If the competition was in fact fair, then better luck to Boeing next time. If this turns out to be more gaming the system (in NorGrum’s favor instead of Boeing’s) then we’ve got a major can of worms that needs to be traced, and responsible parties need to be retired; if it turns out to be Congress, then impeachment proceedings should be opened.
Blacksmith on March 11, 2008 at 2:12 PM
Not the first time this has happened. Gulfstream (American built aircraft) was beaten by Bombardier (foreign) for a US Army Contract. The Army just bought a bunch of French Helicopters, and it turns out that you can’t fly them on a hot day, because the electronics fry. The Helicopters in question have to be retrofitted at the cost of several hundred million dollars with Air Conditioning for the electronics.
Sometimes, buying foreign isn’t cheaper, in the short run, or the long run.
Snake307 on March 11, 2008 at 2:13 PM
NoDonkey on March 11, 2008 at 2:05 PM
Exactly, req’s are established well before the process. When the process is continually interupted or stopped in order to change the req’s there is a problem.
If being a domestic supplier is not given any consideration (as an asset) in the bidding process to procure hardware for our military, sooner rather than later we will witness the total lose of technical manaufacturing capability, and for me that is not a good deal!
dmann on March 11, 2008 at 2:24 PM
Hmmm…
Question…
This price is only possible from Airbus because they are partly Government funded… uh, what happens if that funding is cut? Will Airbus be forced to either cut production and renege on the contract, or raise the price?
Romeo13 on March 11, 2008 at 2:39 PM
Actualy having been in the process for Electronic systems… its not uncommon at all for Reqs to be modified throughout the bidding process.
Sometimes they are modified due to evolving technology… sometimes because NO ONE can meet the specs… and sometimes just because some new guy is in charge of the project (saw that one happen more than once…).
I watched one bid spec for an update to a Solid State Air Search Radar be downgraded to the point where it would only develop HALF the power of the preceeding model (AN/SPS 40… going from B, C, D to the E version). Origional spec was for an INCREASE in power… not a decrease…
Romeo13 on March 11, 2008 at 2:44 PM
Romeo13 on March 11, 2008 at 2:39 PM
Bingo!
Here’s another “what if”; a Euro supplier of composite rudder assemblies in Spain is pressured by the Spainish government to embargo these assemblies due to United States policies in…the Mid East!
Happy-happy, Joy-joy!
dmann on March 11, 2008 at 2:45 PM
Romeo13 on March 11, 2008 at 2:39 PM
Not much time, I have to get ready for work (rapidily disappering technical manufacturing-Semiconductor fabrication…where we try to purchase domestic products when available!!!) I understand, this whole tanker bid stinks to high holy hell all the way back to the ill fated and corrupt Boeing lease deal. I can only hope an investigation makes the process more effective in the future.
dmann on March 11, 2008 at 2:51 PM
This price is only possible from Airbus because they are partly Government funded… uh, what happens if that funding is cut?
Nah. Any “subsidies” happened up front, during the development of the A-330. That money is already spent, it can’t be taken away. And, there is no reason the American taxpayer should not benefit from it!
Lehuster on March 11, 2008 at 2:53 PM
Boeing supposedly offered the 777 and a tanker version of the 787 (pre-development, EXACTLY like what was done for the 707 and the KC-135) for sale to the Air Force, and the Air Force told Boeing not to even bother submitting either plane.
If so, there was a good reason for that - both the 777 and 787 are too big to be operationally useful, and also too expensive for the USAF to buy in the numbers it wanted. (Yes, they are bigger and more expensive than the A-330.)
Big ain’t everything. Boeing tried to get the Air Force to buy a tanker version of the 747 back in the 1970s, and the USAF said no, too big and too expensive.
Lehuster on March 11, 2008 at 2:57 PM
Interesting… both the 787 middle model, and the A330 have the same wingspan… close to same thrust.. 787 weighs less… yet has the same take off weight (thus more possible payload)…
Just at a glance, it looks like the 787 has about the same specs… so how do you get the “too big” idea?
Wasn’t the real reason the A330 was chosen was that it was LARGER and could carry more payload than the smaller 767?
So, if they wanted to submit a plane that more correctly matched the specs of the A330, and were told NOT TO?
Interesting.
Romeo13 on March 11, 2008 at 3:28 PM
We already have a large tanker with the KC-10…we need a replacement for the KC-135, not the KC-10.
Larger doesn’t necessarily mean more capability, just more capacity. The number of booms in the air is a huge factor, as are the ease of switching to drogues for Navy/foreign receivers and the aforementioned airfield restrictions.
James on March 11, 2008 at 3:57 PM
If they reshaped the competition in favor of the bigger plane, why didn’t Boeing move to the Triple 7?
Tim Burton on March 11, 2008 at 4:50 PM
1) The competition was not “reshaped” to favor the bigger plane.
2) Boeing screwed up. They were free to offer a KC-777 if they wanted. But instead, they tried to push the same old plane on the Air Force, with minor improvements, at the least possible up-front cost to Boeing. They thought they had the KC-767 deal in the bag, but even Boeing acknowledged too late that their plane might not be competitive to the KC-330 offering. That’s when they proposed the re-named KC-767 Advanced Tanker (AT), with larger wings and more internal fuel for longer range.
Et tu Brute on March 11, 2008 at 5:21 PM
I’d think the deal-killer for the Dreamliner would be that it effectively doesn’t yet exist. Contracting for a tanker conversion of an as-yet unflown civilian airliner would, I hope, qualify as “high risk,” particularly when there are other perfectly viable, already-proven airframes on the table. Going with newly-built examples of “old” designs like the 767 or A330 has the advantage that the service lives and maintenance qualities of the types in question are relatively well-established.
Blacklake on March 11, 2008 at 5:50 PM
Its interesting what Pat Buchanan says about McCain and GOP support for EADS and outsourcing. The link is http://www.creators.com/opinion/pat-buchanan/to-die-for-nafta.html
BK on March 11, 2008 at 5:53 PM
And yet, thats exactly what we do with our Combat aircraft. We constantly “buy” into the programs of planes that are not on the assembly line… F-22? F-35?
A330 won’t be in production 30 years from now… its not a “new” airframe, but 787 would be.
Actualy an interesting question I can’t find the answer to… Whats the runway length needed by a KC135? Seems to me it probably shorter than that needed for the 330… which would mean either rebasing, or extending runways…
Romeo13 on March 11, 2008 at 6:28 PM
Wasn’t the real reason the A330 was chosen was that it was LARGER and could carry more payload than the smaller 767?
Size was a factor, but not the only factor.
it looks like the 787 has about the same specs…
It is pointless even to talk about the 787! It is not even flying yet (so if they’d offered it Boeing would have been hammered on risk), and Boeing wants to sell them all to commercial customers, not the military. Boeing never even considered the 787 as an option, not even with several years advance warning that EADS would offer the A330.
Exactly right!
We constantly “buy” into the programs of planes that are not on the assembly line… F-22? F-35?
It is one thing when two paper airplanes are competing against each other, but if a paper tanker competed against a real tanker, the paper tanker would lose hands down.
Lehuster on March 11, 2008 at 6:38 PM
Sorry, you can’t have it both ways. You stated that the 787 and 777 are to big to be operationally useful… and yet they are very close to the same size as the A330.
I merely went at looked at the stats.
Romeo13 on March 11, 2008 at 6:47 PM
No. What did they do?
aengus on March 11, 2008 at 7:36 PM
Interestingly, the KC-45A (along with its single and multi-drogue boom systems) is already in production (as the A330MRT) and has been operational since 2004 — that may have had something to do with the Air Force buying a variant of the system.
The aircraft has nearly the same US content as the Boeing entry — 60% (the Boeing entry had parts manufactured in the United States, Japan, UK, Canada, and Italy; the NG entry has parts manufactured in the United States, UK, Germany, Spain, and France). Plane manufacturing is a global enterprise.
The engines on the Boeing entry were PW, the ones on the NG entry are GE CF6’s; both American countries.
Since the plane will be assembled in Mobile, Alabama, our defense-sensitive equipment will not leave the country except when the Air Force flies it out.
Finally, the Boeing bid was $40B; the NG bid was $35B. For those of us who can count, Boeing was underbid by $5 billion smackeroos.
And, last but not least, Northrop did not hire Darleen Druyan.
unclesmrgol on March 11, 2008 at 8:24 PM
One of the more beneficial ancillary effects of our having the world’s largest defense budget is that we provide one helluva jobs program for Americans. Many of these jobs are cutting edge high tech positions which are critical for our defense industries but also influence technical achievement in other areas of our economy. Outsourcing defense acquisitions cuts our industry and our people off at the knees. This is about the dumbest damn policy I have ever heard of…The Germans and French will laugh all the way to the bank and while thankful for the money and jobs will be lamenting the dumb Amis…
Nozzle on March 11, 2008 at 8:42 PM
unclesmrgol on March 11, 2008 at 8:24 PM
Please check your facts, the Boeing bid was $35B vs. EADS $40B. If we want to look at $$, the operational costs of the B767 are substantially less than A330 due to fuel efficiency, some estimates at over $14B during the life of the program. This entire process is another example of wasteful spending by the Air force. The brass pushed for the multirole Cadillac platform vs. the Chevy get it done airframe. Please keep in mind this is a tanker, a support aircraft, not a combat system where the latest and greatest most expensive technology is required in order to achieve mission success and crew survival. Both airframes are damn airliners! If more cargo/medivac capacity is needed, buy more C17’s
dmann on March 11, 2008 at 8:51 PM
Some jobs will remain at home yes…The profit however will go to EADS to support their bottom line, future growth, and technological prowess.
Nozzle on March 11, 2008 at 8:55 PM
Nozzle on March 11, 2008 at 8:55 PM
Your points are well taken. Perhaps a more troubling reality to consider is allowing Airbus a beachhead in the states from which to launch an all out assault on the domestic aircraft industry. I’m sure the Air force could care less!
dmann on March 11, 2008 at 9:13 PM
You stated that the 787 and 777 are to big to be operationally useful… yet they are very close to the same size as the A330.
Except they’re not. The 777 and 787 are significantly heavier than the A330, and thus more expensive. Also, Boeing officials have said the 787 does not have sufficient structural strength to handle the rigors of the air refueling mission. It makes heavy use of composites and other lightweight materials because it was designed for maximum efficiency in transporting passengers, not cargo or fuel.
Perhaps a more troubling reality to consider is allowing Airbus a beachhead in the states from which to launch an all out assault on the domestic aircraft industry.
Nah. First of all, the plane will be manufactured in Europe, so this contract does not represent such a beachhead. Secondly, Airbus does not need such a beachhead, because they can do all the “assaulting on the American aircraft industry” that they need to do from their facilities in Europe.
the operational costs of the B767 are substantially less than A330 due to fuel efficiency,
Nope. The operational costs of the KC-45A will be substantially less than those of the KC-767, because the bigger aircraft needs to fly fewer missions in order to offload the same amount of fuel (which is after all the whole point of the tanker).
Lehuster on March 11, 2008 at 10:43 PM
I’m a little concerned that the winner of the contract, EADS, and other European defense suppliers have actively pursued selling military equipment to Iran for years. Airshows emblazoned with the ever-present Farsi banner of “Death to America” - nice.
Redhead Infidel on March 13, 2008 at 10:30 AM