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  • Pentagon cancels Tanker Competition...

    WASHINGTON (Reuters) - Defense Secretary Robert Gates on Wednesday canceled a $35 billion air tanker competition between Northrop Grumman Corp (NOC.N) and Boeing Co(BA.N) for now, saying the contest had become too emotional and complex to be decided before the Bush administration leaves office in January.

    "It is my judgment that in the time remaining to us, we can no longer complete a competition that would be viewed as fair and objective in this highly charged environment," Gates said. "The resulting 'cooling off' period will allow the next administration to review objectively the military requirements and craft a new acquisition strategy for the KC-X."

    The Pentagon also said that any contract award would have faced possible protests by the losing bidder.

    "Over the past seven years the process has become enormously complex and emotional - in no small part because of mistakes and missteps along the way by the Department of Defense," Gates said.

    Pentagon officials concluded that the current fleet of KC-135 tankers, which are over 47 years old on average, could be maintained to meet Air Force needs for the near future, and would request funding in the fiscal 2009 budget and "follow-on budgets" for that purpose, the statement said.

    http://news.yahoo.com/s/nm/20080910/bs_nm/usa_tanker_dc
    I understand their resoning. Well at least we will be seeing the KC-135 for a while longer. Anyway, I wonder if they will be willing to review the applications in the near future. Or, will this competition be shelved for good?
    Whatever is necessary, is never unwise.

  • #2
    Defense Department cancels KC-X tanker competition

    The following is Wednesday’s announcement from the U.S. Department of Defense that it has cancelled the KC-X tanker competition:

    Today, the Department of Defense notified the Congress and the two competing contractors, Boeing and Northrop Grumman, that it is terminating the current competition for a U.S. Air Force airborne tanker replacement.

    Secretary Gates, in consultation with senior Defense and Air Force officials, has determined that the solicitation and award cannot be accomplished by January. Rather than hand the next Administration an incomplete and possibly contested process, Secretary Gates decided that the best course of action is to provide the next Administration with full flexibility regarding the requirements, evaluation criteria and the appropriate allocation of defense budget to this mission.

    Secretary Gates stated, "Over the past seven years the process has become enormously complex and emotional – in no small part because of mistakes and missteps along the way by the Department of Defense. It is my judgment that in the time remaining to us, we can no longer complete a competition that would be viewed as fair and objective in this highly charged environment. The resulting ‘cooling off’ period will allow the next Administration to review objectively the military requirements and craft a new acquisition strategy for the KC-X."

    In making this decision, it was concluded that the current KC-135 fleet can be adequately maintained to satisfy Air Force missions for the near future. Sufficient funds will be recommended in the FY09 and follow-on budgets to maintain the KC-135 at high-mission capable rates. In addition, the Department will recommend to the Congress the disposition of the pending FY09 funding for the tanker program and plans to continue funding the KC-X program in the FY10 to FY15 budget presently under review.
    Reading between the lines, Gates is basically saying, "We're sick of this fucking shit. Let the next administration deal with it." So yes, there will be a tanker contract. Just not soon.

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    • #3
      One has to wonder if Boeing will use this time to redo their bid, perhaps offering a platform based on the 777 instead of the 767.

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      • #4
        Originally posted by B757300 View Post
        One has to wonder if Boeing will use this time to redo their bid, perhaps offering a platform based on the 777 instead of the 767.
        Bingo.

        Comment


        • #5
          Originally posted by Verbal View Post
          Bingo.
          Wasn't the KC-777 proposed but the government stated that the 767 would better meet their needs?

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          • #6
            Originally posted by Bok269 View Post
            Wasn't the KC-777 proposed but the government stated that the 767 would better meet their needs?
            Yes. That is, indeed, what the Air Force stated.

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            • #7
              If the DOD were smart (A wild hope!), they would detail the requirements of the bid and state how exceeding the minimum requirements affect the bid, then stick to them!

              Boeing and Airbus would then know exactly how their bids should perform.

              The DOD (Air Force) made statements that exceeding the requirements would not be considered. Then the bid was awarded, the DOD clearly stated the bid was awarded partly because of the larger A330's size and capacity.

              Now, Boeing can rebid using the 777 or 747 airframe and EADS/Grumman can use the A-380.
              Don
              Standard practice for managers around the world:
              Ready - Fire - Aim! DAMN! Missed again!

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              • #8
                The following article blew me away... especially Young's comment in bold font...


                Northrop entitled to termination fee over tanker deal, Pentagon says

                The U.S. initially awarded a contract to build the aerial refueling tankers to Northrop but withdrew it after rival Boeing protested.[/color]
                From Bloomberg News
                September 19, 2008


                Northrop Grumman Corp. is entitled to a termination fee after the U.S. withdrew its contract to build aerial refueling tankers, the Pentagon's top weapons buyer said Thursday.

                The Defense Department will negotiate with Century City-based Northrop for a fee in the range of "tens of millions of dollars," Undersecretary of Defense John J. Young Jr. said.

                "They are entitled to certain amounts of money," Young said. "We are certainly going to negotiate with them aggressively and try not to pay anything more than we have to, but unfortunately, in my opinion, they are entitled to something."

                Northrop won an initial contract Feb. 29 for development and purchase of four test aircraft for $1.5 billion and options of $10.5 billion to build 64 aircraft. The contract included options to build a total of 179 tankers valued at $35 billion. Competitor Boeing Co. successfully protested the award. The U.S. plans to rebid the contract once a new administration is in office.

                "We haven't entered into discussions yet that would lead to an appropriate settlement," Northrop spokesman Randy Belote said. "We are waiting for instructions from the Air Force."

                Air Force spokeswoman Lt. Col. Karen Platt had no immediate comment.

                The termination fee would be to reimburse costs incurred by Northrop to develop its tanker candidate, which was based on the Airbus A330 commercial jetliner. Northrop had committed to delivering the first plane to the Pentagon two years ahead of schedule.

                "They were able to grab an airplane coming off the production line and immediately make it available to start testing and fitting for modification," Young said of the Northrop proposal.

                Compared with Boeing, Northrop offered a shorter development program that cost less, Young said. Chicago-based Boeing based its bid on a modified 767 commercial plane.

                "Northrop was very much using the existing airframe, whereas Boeing's proposal involved assembling parts of existing airplanes to create essentially a new variant," Young said. Both aircraft were ranked by the Air Force as "technically outstanding," he said.

                Northrop proposed spending $12.5 billion for the development phase and first 68 aircraft, Young said. The government evaluated Boeing's cost proposal at $15.4 billion for the development program and the first 68 aircraft, he said.

                "The Boeing proposal was more expensive and delivered later and provided less capability," Young said. "Frankly, the Boeing aircraft was smaller and should have been cheaper."

                Boeing's cost estimate was "significantly higher" than an independent analysis of aircraft alternatives Congress required the Pentagon to perform before it launched the competition. Northrop's bid price was "comparable" to what the analysis estimated, Young said.

                Boeing spokesman Dan Beck declined to comment on Young's remarks but said the company "is looking to the future and is looking forward to a renewed tanker competition when the Pentagon proceeds. As we go through this interim period we're not interested in revisiting the past."
                Is the "raw price" the only consideration in his mind???

                Failure to meet performance requirements, [deliberate] failure to agree to heavy maintenance [depot] capability within 2-years, failure to account for CE construction costs to handle the oversized NG-EADS acft and minimal attention to "other desireable characteristics and objectives" [beneficial for USAF operational/maintenance effectiveness] aside... the Boeing aircraft burned considerably less fuel and had a well established operations and maintenance history... doesn't that count for anything???

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