Northrop/EADS Beats Boeing For Tanker Contract / KC-45 Contract Awarded

[uy707]

I also asked myself why Boeing kept flying with the 767 instead of refining their plan from A to Z with a brand new offer coming along with some comments "Yes after all, you were all the wiser to break the contract, we understand that in terms of probity together with technology we have to redo" The T7 would have been great to start replacing the 135s and ultimately the KC.10s. An opportunity on a SILVER plate was probably missed, now it's up to Boeing in really learning the lessons pending the next batches !

[passenger-zzz]

Nice going USAF. Putting our national security in the hands of the French, and ......

...and worst of all, the French are the best friends of Bin L., and they want to move their country to the Middle East, near Iran. And some of these froggies plan to bomb the USA with billions of tons of french fries.....

Oh, come on, you guys over that big sea, I have the impression that Americans fear/hate everything with does only sound foreign. Take a plane, travel to France, eat a tasty baguette an take a look at these beautiful tall french ladies drinking coffee in a café, doing their shopping in Paris or lying in the warm sand of the Cote d'Azur.... (By the way, I'm not French, but European, an Airbus is our common baby )

An last but not least: translate beautiful into french an you get -> ..........

[Verbal]

An last but not least: translate beautiful into french an you get -> ..........

Belle.

[HalcyonDays]

HD, do you anticipate that EADS will funnel money it makes on the tanker into development of its commercial Airbus products, a la Boeing? Just wondering.

I admit it's a very good question, Verbal. I assume so. Imitation is said to be the sincerest form of flattery. If Airbus can clean up half the world without the benefit of military contracts, imagine how much it can clean up with military contracts.

[HalcyonDays]

Nice going USAF. Putting our national security in the hands of the French,

Do you suppose the French thought they were putting their national security in the hands of the Americans when they bought C-135 tanker/transports from Boeing many years ago ?

[Verbal]

Boeing beaten on tanker must-haves

Boeing beaten on tanker must-haves
Seattle Times 03/04/2008
Author: Dominic Gates
(Copyright 200

Boeing was comprehensively beaten on almost every aspect of the competition for the $40 billion Air Force tanker contract awarded Friday, according to a report published Monday by a defense analyst with close Pentagon connections.

If so, Boeing may have only the slimmest chance of reversing the victory of Northrop Grumman and Airbus parent company EADS.

Loren Thompson, a defense analyst with the Lexington Institute, issued a memo Monday that discussed the outcome based on "weekend conversations with government officials intimately familiar" with the Air Force decision.

On the five specific criteria used to decide the winner, Thompson wrote, "Northrop Grumman's victory was not a close outcome. ... The Northrop-EADS offering was deemed much better in virtually all regards."

Responding to the firestorm criticism about the award, the Pentagon's chief weapons buyer, undersecretary of defense for acquisition John Young, issued a statement Monday saying a team of independent civilian and military analysts appointed by him would vouch that the Air Force "conducted a very open, fair and detailed competition process."

Those two assessments suggest Boeing's hope of a reversal of the award may now rest on largely political grounds — opposition to the outsourcing of U.S. jobs on a government defense contract.

The Air Force had scheduled its first formal briefing to Boeing for March 12, a couple of days before Congress' Easter recess.

But a bipartisan delegation of lawmakers from Washington state and Kansas — including Sens. Patty Murray and Maria Cantwell, both Democrats from Washington; and Sens. Sam Brownback and Pat Roberts, both Kansas Republicans, called Monday on Defense Secretary Robert Gates to debrief Boeing this week on the decision.

Both Democratic presidential contenders, Hillary Rodham Clinton and Barack Obama, criticized the award Monday.

Thompson, who last week used his government contacts to call the surprise outcome of the tanker contest an hour before the official announcement, said in an interview Monday that Air Force officials "were very convinced early on that there were problems with the Boeing proposal."

According to his conversations with officials, said Thompson, "Northrop offered a superior proposal in every measure and Boeing simply did not do a competent job of presenting its case."

The Northrop proposal, which put forward the much bigger A330 against the 767, even swung the Air Force around from its original thinking.

"The Air Force started out believing that the larger aircraft was a liability," Thompson said. "Northrop did such a superior job of analysis that they convinced a reluctant Air Force to treat the larger aircraft as an asset."

His memo listed the five key criteria as capability, risk, past performance, cost and "integrated fleet aerial refueling assessment," a score from a computer model that measures performance in various war scenarios.

"Boeing didn't manage to beat Northrop in a single measure of merit," Thompson wrote.

The two proposals were assessed as equal on the perceived risk that the contractor would not perform as required.

By every other measure, Northrop won. On past performance, the big delays to the Japanese and Italian 767 tanker programs weighed heavily against Boeing, Thompson said.

And Thompson, who was considered by EADS to favor Boeing in the competition, added this damning endnote to his memo:

"The reviewers concluded that if they funded the Northrop Grumman proposal they could have 49 superior tankers operating by 2013, whereas if they funded the Boeing proposal, they would have only 19 considerably less capable planes in that year."

Scott Hamilton, an Issaquah-based analyst who has long considered the Northrop-EADS proposal superior, described that bottom line as "astounding."

Hamilton criticized Boeing's public-relations campaign during the contest for focusing on aspects such as the creation of U.S. jobs and government subsidies to EADS, rather than the merits of the two planes.

"Boeing doesn't seem to have a leg to stand on for a successful protest," said Hamilton. "I think that [local] anger really ought to be directed at Boeing for putting together such a poor proposal."

Although the Northrop-EADS tanker will be assembled in Mobile, Ala., the major A330 airframe sections will still be built in Europe and shipped across the Atlantic.

Boeing declined to comment Monday as it awaits its debriefing from the Pentagon. But reaction to the political elements of the contest continued to build Monday.

Sen. John McCain, R-Ariz., said Monday he hadn't made up his mind on the outcome of the contract award.

McCain, the likely Republican nominee for president, helped scuttle a previous 2001 deal that gave the contract to Boeing.

"Having investigated the tanker lease scandal a few years ago, I have always insisted that the Air Force buy major weapons through fair and open competition," McCain told The Associated Press. "I will be interested to learn how the Air Force came to its contract award decision here and whether it fairly applied its own rules in arriving at that decision."

Obama, of Illinois, expressed disappointment Sunday that Chicago-based Boeing lost out.

Obama said it was hard for him to believe "that having an American company that has been a traditional source of aeronautical excellence would not have done this job."

Clinton, D-N.Y., a member of the Senate Armed Services Committee, said she was "deeply concerned about the Bush administration's decision to outsource the production of refueling tankers for the American military."

While details of the decision are not fully clear, Clinton said, "it is troubling that the Bush administration would award the second-largest Pentagon contract in our nation's history to a team that includes a European firm that our government is simultaneously suing at the [World Trade Organization] for receiving illegal subsidies."

.

[Doug Hughes]

KC-45A Contract Award

Bravo to the United State Air Force for doing the right thing and not bowing to the Boeing-backed politicians. They will be getting the same tanker favored by most of the other nations. Only Japan bought the Boeing version, and the first delivery was two years late.

[crazpony]

How can Billary mention “out sourcing” the country? The Clintonlace administration has allowed this to happen over and over and over.

Amoco (American Oil Company) now owned by BP (British Petroleum)

Getty Oil now owned by Lukoil, the leading vertically integrated oil company in Russia.

Chevrolet DuroMax Diesel motor, built by Isuzu (Japanlace)

WE ARE SELLING OURSELVES OUT TO FOREIGN COMPETITION.

How about this since talking about Boeing, Business Week, January 30, 2006,

Boeing CEO quoted, “It doesn't hurt that a Chinese worker can bend metal for a 737 tail section at a fraction of the cost it would take a U.S. worker.”

“True, the aerospace giant does turn to Russian aircraft engineers and Indian software geeks because of their high technical skills and cheap wages.”

For the first time, with the 787, Boeing is outsourcing more than 70% of the airframe and is giving all aircraft suppliers the responsibility for doing the detail engineering designs.

For the C-17, we've outsourced basically all the machine and sheetmetal detail parts.

Second problem here, all government contracts are put our on a competitive bid award, the Clinton administration in 1996 allowed America’s only other large aircraft manufacturer (McDonnell Douglas) to be merged with Boeing, creating a Boeing monopoly for large transport aircraft.

The first thing Boeing did was teardown the DC-10/MD-11 (KC-10A) manufacturing facility in Long Beach, cutting the jigs up. Basically eliminating any American competition for the KC-767 tanker.

Then there is the controversy over the behind-the-scenes negotiations between Boeing's chief financial officer, Michael M. Sears and Darleen Druyun, Sears had spoken to a Pentagon official involved in the negotiations, about a job for her at the company. The Air Force investigated whether Ms. Druyun improperly disclosed information to Boeing about a competing bid for the tankers.

Darleen Druyun, former No. 2 acquisition executive for the Air Force was sentenced to nine months in prison for negotiating a job with Boeing at the same time she was involved in the Boeing tanker contracts.

So Boeing is not clean at all, I think they (Boeing) sat on their corporate fannies, assuming that no body would stand still and allow a foriegn competitor win the military contract. I am glad Northrop Grumman won, time to put Boeing in their places.

[flyboy2548m]

Didn't Italy buy the Boeing as well?

[Feyd]

Well here is my take. First, I appreciate the variety of posts we have as good 'ol discussions/debates are beneficial (to most of us). I'm not trying to be contradictory with my comments, but I have mixed feelings.

1) I do not create strategy, command a/c assets in theatre/strategic ops or fly tankers, so I cannot claim having expert knowledge. That being said, I trust that the USAF/US Military make the best choices based on their knowledge and experience and strategic plans. I have no issue against the KC-30 simply because it is a European a/c.
1a) However, I do have a problem with European countries that will benefit from this deal, but either don’t fully support or give lackluster support to the mission in Afghanistan. Iraq is a different story altogether. Terrorism and radical Islamic elements are a threat to all nations as the UK and Spain found out. So it’s almost like these countries are saying “We don’t support the fight against terrorism (Afghanistan), but we’ll be happy to make some money off of it!”. Those with opinions like that should go ahead and put their head back into the sand.

2) As long as there was thorough communication throughout the procurement process, i.e. no unfairness, wink-wink conversations, etc..., Boeing, IMO, really cannot contest this deal in that respect.

3) Some have to realize that Boeing's sales team was a bit arrogant/lazy in this entire process. No doubt they wanted to keep the 767 line alive. On the flip side, Boeing claims the KC-767 was offered based on the USAF's desire for a more direct KC-135 replacement. The whole argument is conjecture on our part. We don't know what USAF officials said to the NG/EADS and Boeing teams. Did the USAF rule out a 777 derived tanker? Was the Boeing team just a bit lazy and overconfident? Was Boeing so focused on keeping the 767 on life support that they 'took their eye off the ball'?

4) With all due respect to our many European members on this forum, the nonsense coming out blaming American protectionism or the comment about an "American Empire" is ridiculous. Sure there are good 'ol Boeing pundits here, but there also Airbus pundits as well. Also, please don't tell me there is not a push by some in Europe to "Buy Europe". The A400M engine deal given to EPI is a good example. Denying this only shows one's ignorance, IMO. But to some, ignorance is bliss.

But after European business and political leaders complained, Airbus gave EPI a few days to match Pratt & Whitney's bid, The Globe said.

On Tuesday, EPI won the contract.

Peter Smith, president of the Aerospace Industries Association of Canada, denounced the decision, telling the paper it was unfair and a blatant example of European protectionism resulting from "unprecedented intervention" by European leaders.

http://www.cbc.ca/money/story/2003/0...nes030507.html

5). From what I read, I disagree with the decision that Boeing's offereing was so much more riskier than NG/EADS. Any decent undergrad economics class will teach you that foreign investment poses many risks (some smaller/some bigger). NG/EADS have never cooperated on a contract of this size. EADS doesn't have nearly the experience Boeing does with the development and sustainment of large tanker fleets. There are also factors with exchange rates, language barriers and the fact that there are multiple soverign nations involved. What happens if international relations sour and tanker pieces (imported) are affected? That in itself is a major investment risk.

Finally, this is an election year, which only makes matters worse. You're smoking high $ crack if you think this is over. Even if Boeing itself doesn't raise too much of a stink, you can bet Congress will. On CNN this evening, a report stated that the NG/EADS deal would create approx. 20k jobs in the U.S. (direct, indirect and supplier-based). However, if Boeing would have one it would have created and/or sustain approx. 50k jobs. With parts of the US economy really hurting right now, this is the last thing voters want to hear and in states like Ohio, Pennsylvania and others that have strong manufacturing bases. Whether they will be working on any a/c at all is irrelevant. They will see fellow middle-class workers shafted and will revolt with their vote/protests.

[Bok269]

This has already been posted in the Military Av section.

[666]

WE ARE SELLING OURSELVES OUT TO FOREIGN COMPETITION

Expect much more of that as long as the double deficit continues. Every dollar in foreign hands is like an IOU with a piece of the country as deposit. All those excess green bills spent abroad bounce back one way or another.

[11Fan]

I have been following this discussion on several forums, each having multiple threads with comments from wannabes, watchers, experts, some not-so experts, Airbus and Boeing fans galore, and a multitude of others who have an opinion, even though they have no skin in the game, whatsoever.

I have to say Feyd, yours is the most intelligent analysis of the issue that I have read.

And that’s all I have to say about that.

[flyboy2548m]

1) I do not create strategy, command a/c assets in theatre/strategic ops or fly tankers, so I cannot claim having expert knowledge.

Quite the contrary, around here that makes you about as expert as they come.

[Uncle Jay]

Old War

Amazes me that nobody is questioning the whole tactical plan involved with these tankers. What, exactly, do we need them for, given that old style massive air operations are not getting us anywhere in this new war of insurgencies, civil attacks and and idealogies ? Massive air support did not win in Viet Nam, Afghanistan (Russian and US) or anywhere else (except maybe Serbia), I'll bet most of these tankers are used for hugely wasteful training exercises which yield no benefit in the real world.

The money would be better spent on long endurance drones.