Northrop wins tanker contract

Update, 9:30 am: We’ve added more information below the jump.

Northrop Grumman won a big KC-10 tanker maintenance contract from the Air Force this week, taking it away from Boeing, which has had it for 10 years. The value is $3.8bn.

Boeing hinted that it might protest the award. Here is the story.

Maybe it’s just our Grassy Knoll bent, but is this a not too subtle message from USAF that tactics by Boeing supporters in the KC-X tanker competition are already irking the USAF?

This is another in a string of losses Boeing has suffered at the hands of the Defense Department.

At the same time, one of Northrop Gumman’s supporters, Sen. Jeff Sessions (R-Northrop/AL) has now jumped in to the KC-X competition and has introduced an amendment to block funding unless the USAF provides Northrop with Boeing’s pricing. This AP story has details. George Talbot of The Mobile Press-Register has these stories of interest: October 2; September 30; September 29.

This competition is getting messier by the minute. We return, once again, to our view that the only way this procurement is going to go forward is through a split buy: double the acquisition from 15-18 a year (a ridiculously low number under any circumstances) to 30-36 a year and give Boeing and Northrop contracts for the KC-767 and KC-30. Aside from the political realities, there are strategic reasons to do so, in our view.

Furthermore, accelerating the deliveries, even with two equipment types, will save money in the long run by eliminating much sooner the aging KC-135 fleet and its increasing maintenance costs.

Update, 400pm Oct. 2: The Everett Herald has this item quoting defense analyst Loren Thompson, also noting Boeing’s poor relationship with the Air Force.

6 comments on “Northrop wins tanker contract

  1. Most people see the military as apolitical, when in reality it is highly political at the Pentagon level. Much like Boeing, the generals and their DOD civilaian bosses exercise a sort of self delusional moral authority using “the troops”as the primary chess piece (think pawns) to achive their ends.

    Boeing, for it’s part, cynically and disingenuously utilizes the “Jobs for Americans” theme even as it outsources on the commercial side, and establishes offset agreements on the military side.

    What Boeing and the DOD have in common is that they both think we all all too stupid to recognize all this. While they will always be right to an extent in this belief, there are always willing, and fully informed third parties to participate in the hypocrisy, if it serves them well (translated meaning- makes them piles of cash).

  2. Maybe it has something to do with the recent fine Boeing paid for overcharging and not doing some maintenance work on the KC-135s?

  3. If the USAF was ready to hand Boeing CSAR-X, so it’s doubtful there’s a lot of dislike there. We’ve only got 3-4 big U.S. defense contractors, so in any given year each of them will win big contracts while losing others. Couldn’t the maintenance contract award be interpreted as a consolation prize to NG because the USAF knows the KC-X requirements favor Boeing’s smaller aircraft?

    Also, Sessions actions in the senate open the door to the Washington and Kansas delegation to start introducing measures of their own. It’s going to get ugly up there.

  4. RE: “Much like Boeing, the generals and their DOD civilaian bosses exercise a sort of self delusional moral authority using “the troops”as the primary chess piece (think pawns) to achive their ends.”

    I disagree and would characterize the statement as opinion unsupported by fact. As much as I am in a general (no pun intended) funk over the state of Air Force leadership, I have never seen any indication that the leadership behaves in any way as described above. I believe history illustrates the opposite: the overwhelming majority of military leadership behaves in a way they believe is in the best interest of the common defense.
    Even if there are a few bad actors (the military is after all a cross-section of the population as a whole with the most egregious transgressors generally filtered out early in their careers), this kind of ‘everyone does it’ or ‘they’re all the same’ equivocation is dangerous to our society. It is dangerous because it fails to distinguish between the one ‘side’ of the comparison with actors that behave poorly as a norm and another side that behaves poorly as an exception to the norm.
    They (the two sides) are easy to discern from each other: there are consequences for poor behavior on the side where poor behavior is the exception. The other side? Not so much. Equivocating only gives cover to the side where poor behavior is the norm.

    While I doubt NG winning this contract is due to Boeing’s ‘poor’ (if as indicated in the article) relations with the AF. it does make one think. In how many industries/businesses can you get away with telling the Customer they don’t know what they need and that the Customer doesn’t know best? Other than Microsoft, I mean.

  5. Re: Split Buy. Why not do a split buy but not the one all are considering? Give the KC-X to Airbus/EADS/NG (A330 based aircraft) and give the KC-Y to Boeing (777). Boeing then has the time to develope a 77 bassed tanker, the USAF finally gets their KC-X tankers and everybody is further spared this three ring circus called the KC-X procurement competition.

    But I geuss Boeing and its supporters would not even agree to that.

  6. According to the news article about the maintenance contract, Boeing cliams it has 80 years experience in building tankers. According to my math, that means they have been doing this since 1929!!!!

    Or are they trying to claim that they have 40 years experience and then added MD 40 years to come up with that dubious figure?

Leave a Reply: Note Reader Comment Rules

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s