Pentagon reissues tanker RFP

The Pentagon today re-issued the Request for Proposal for the aerial tanker competition today.

As the press conference begins, here is a running synopsis:

  • USAF plan and process as we go forward to have a week or so to discuss the details with Boeing and Northrop. Each side will have face-time to discuss details.
  • A final RFP will be issued in a month. Proposals due by about October 1.
  • From October 1 will evaluate proposals and have discussions with offerors, plus face time with each.
  • Plan to have award by year end and debrief offerors in January.
  • We’ve provided the offerors very clear and unambiguous insight into the relative order of importance of keep performance parameters (KPP) and provided a matrix to fully understand priorities.
  • There are different ways to give consideration to extra credit for exceeding KPPs.
  • The warfighter has said life cycle is 40 years (vs 25) so cost evaluation will be on 40 years.
  • The key change to the RFP is to highlight and to make very clear the relative importance to each capability. We made sure we are going to evaluate in terms of fuel offload that we will recognize value of offload in excess of KPP.
  • We will look at fuel cost, and cost of government ownership over 40 years.
  • The Pentagon gives positive consideration for fuel offload above threshold, but it appears that not for cargo and troop capabilities above threshold.
  • We are very measured and very specific to respond to GAO, but otherwise views the changes to be minor.
  • The USAF is playing a significant role in new RFP, as are other services, comprised of all new members, along with an independent review team to review what the Source Selection team does.
  • We won’t be using any models to determine 40-year life-cycle costs; we’ll use real cost analysis.
  • Jobs and industrial base are not part of the RFP process but these are part of the overall plan to determine whether the industrial base exists to build the plane. But these are not part of the technical evaluation.
  • In general, the way we’re evaluating life cycle cost in terms of importance is unchanged from one RFP to the other RFP. The acquisition cost is a separate issue.

End of conference.

Our immediate take:

Both sides got something in the rebid:

  • Size gets extra credit for fuel offload, but because Northrop’s KC-30 has greater capability, this feature seems to favor Northrop.
  • The life cycle cost is extended from 25 to 40 years, and this would seem to favor Boeing’s KC-767. We discussed both elements Tuesday in our Commentary on our Corporate Website.

It didn’t take long for Boeing’s advocates to look for bias, according to this CBS News report. They’ve been advocating including the 40 year life cycle but excluding the extra credit, a position we find just plain stupid. If you alter the RFP to allow one, then you need to allow the other.

The question is whether Boeing will protest the changes; officials said at Farnborough that they might because they felt any changes to the RFP should reset the process from scratch.

Here is the Draft RFP, Part 1. 27 pages.

Here is the Draft RFP Part 2. 96 pages.

Here is Northrop’s statement. (No response yet from Boeing.)

Here is a Seattle Times report, quoting a spokesman for US Rep. Norm Dicks (D-Boeing) already whining about the new RFP. No mention of the 40 year life cycle element by Dicks’ office, which he advocated.

Update, 4:10PM PDT: Washington State’s other Boeing advocates are quoted in this article and this one, all complaining about the extra credit for extra fueling capabilities. The hypocrisy is palpable. Some of them are behind legislation in the US House that would all but require an award to Boeing rather than the “fair” competition they advocate, and all seemed to favor changing the RFP to a 40-year life cycle on the assumption that this will guarantee a win for Boeing. Yet they object to the extra credit change. These politicians, and those from Kansas who rival Washington, aren’t remotely interested in competition and all their rhetoric to the contrary is political pablum.

Here’s a CNBC recap.

This just in from Boeing:

Boeing has received the amended Request for Proposals (RFP) for the KC-X tanker competition. Given the very narrow window for commenting on this draft, our team is focused on identifying and understanding any changes that may have been made to the original requirements and evaluation criteria. We also need to see how the document addresses the strong concerns the Government Accountability Office identified in sustaining our protest.

Despite the fact that the first competition appropriately addressed the aircraft’s intended mission, until we receive the final RFP it is too early to offer any details about Boeing’s path forward.

Boeing remains committed to providing the most capable tanker to the warfighter and the best value for the American taxpayer.

No comment on whether Boeing will protest the DRFP.

Steve Trimble of Flight Global has a series of short items in his blog. Rather than linking each one, here’s the link to his home page–select the individual tanker items as you will.

6 comments on “Pentagon reissues tanker RFP

  1. I pretty much agree with your analysis, except the longer life cycle may not advantage Boeing as much as tanker size advantages NG. NG has of late developed a very good track record doing total system support for military airframes, and ‘teaming’ with AFMC depots. I believe they also separated that part of their business into a separate, lower-cost business unit. How does Boeing’s record look in this area?

  2. I think Boeing has a point that if the RFP is changed then they should redo the entire process. There is precedent for this from the CSAR-X program. The GAO upheld a very narrow point of protest concerning life cycle cost. The Air Force attempted to update the RFP and only focus on LCC. Lockheed protested the new RFP stating that they should get to submit any new proposal data based on the RFP changing could change there strategy. The GAO upheld this protest and now almost two years later we still don’t have a CSAR-X helicopter. It seems to me the AIR Force is changing the RFP to fit the offer not vice a versa like it should be. From reading the entire GAO report it wasn’t the RFP that was the problem, but that they didn’t score based on it.

  3. To Mac:
    We don’t know Boeing’s track record for IDS on matters such as you write about; we know that BCA (Boeing Commercial) has long had a major push in the area of “services,” including acquiring companies that provide maintenance and support services to airlines. We have to assume that a similar philosophy exists at IDS.

  4. The Pentagon gives positive consideration for fuel offload above threshold, but it appears that not for cargo and troop capabilities above threshold.

    Not surprising, since there was the threshold fuel offload vs. range chart given in the SRD, but the only cargo requirement in the SRD was that the KC-X be capable of an “all cargo configuration that accommodates 463L pallets” and be capable of an “all passenger configuration (plus baggage).”

    There was no specific number of 463L pallets required to be carried, nor was there a specific number of passengers required to be carried. Only that “[c]onversion between configurations (unloaded) shall require no longer than 2 man-hours.”

    It seems to me that since there was no minimum threshold requirement for number of pallets or number of pax, that is ‘trade space’ to show best value.

  5. I amused myself just now looking at the GAO judgment. The “no consideration for extra fuel offload” clause has to go: the GAO totally tied themselves in knots on this issue.

    I believe the RFP requires each bid to meet each “threshold”; will give extra credit for exceeding the threshold up to the “objective”; but will will not give further credit again for exceeding the objective. In the case of fuel offload, the objective was an aircraft “capable of exceeding the threshold”

    So, according to the GAO, Boeing should get the same extra credit for exceeding the threshold a bit (exceed threshold – good) as Northrup for exceeding the threshold excessively (exceed objective – unnecessary). They also say theirs is “the only reasonable interpretation”. Hmm…

    Still, I suppose no more arcane than the Air Force’s argument that the objective was “unbounded” because no “objective level” was stated.

    The whole nonsense disappears, however, if you remove the objective, which was clearly a mistake in the original RFP. Then bids can get credit if the extra capability is of genuine benefit.

  6. It matters not. Once this gets to court and Boeing demonstrates that they came up with their 767 proposal based upon the original RFP which specifically stated that no credit would be given for exceeding the KC-135 offload and that they were denied time by the abbreviated process on this RFP to propose a bigger aircraft once the USAF reneged on their original RFP, the court will void any contract issued based on this newest RFP.

    If the USAF or DOD wish to do a KC-Z program prior to the KC-x program, they can certainly do so. What they can’t do is do a KC-Z program in less than six months by pretending it’s a minor modification of the KC-X program.

    Moreover, if the intention is to get a new LARGE tanker, this needs to be rebid. The A330 has less offload than the KC-10, despite taking up a considerably greater footprint on the tarmac.

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