Get over it and move on

In the three days following the withdrawal by Northrop Grumman from the KC-X tanker competition over its conclusion that the Final Request for Proposals for the USAF aerial tanker was irretrievably skewed toward the smaller Boeing KC-767, Northrop supporters and Europeans–notably France–have decried the fairness of the FRFP.

French officials in particular have bemoaned the development. Diplomats, all the way up to the President, have vowed “this is not over.” Retaliatory threats of freezing out US sales to Europe are being thrown about.

As readers of this column know, we have favored the Northrop KC-30 from the get-go and we have supported a split buy between the KC-767 and KC-30 for political and strategic reasons. With this reminder, we have this to say to Europe:

Get over it and move on.

We agree that Round 3 of the competition was anything but a down-the-middle RFP which gave Northrop an even shot at winning. From the moment the Draft RFP was issued last September, it was clear this was a price shoot-out and not a Best Value competition, despite rhetoric from the Pentagon.

And smaller airplanes are less costly to buy and to operate than larger airplanes. There simply is no getting around this. The KC-30 advantage was in its extra capacity for cargo, troops and fuel and this would not be considered unless the price between the finalists (presumed all along to be the KC-767 vs. the KC-30) was within 1% of each other.

Northrop cried foul on this, too, noting that during the successful protest by Boeing over the 2007 award to Northrop, Boeing received Northrop’s cost/pricing information and Northrop did not get Boeing’s–so, Northrop asserted, Boeing had the advantage. The Pentagon denied an advantage existed, but Northrop didn’t believe it.

The Department of Defense is free to set whatever specifications it desires and it can also begin with a sole-source contract should it chose to do so. Our complaint about Round 3 is that it had become clear that DOD wanted “just” a tanker this time but went through the charade of holding a competition of a tanker vs a Multi-Role Tanker Transport. These are two very different airplanes.

Although Boeing will argue that the KC-767 is an MRTT as well, it plainly is more geared to being a one-for-one replacement for the aging KC-135 tankers and Boeing largely promoted it as such. Northrop promoted the far greater MRTT flexibility of the KC-30.

As we noted in our February 23 posting, the Pentagon’s Aircraft Investment Plan said straight-away that the “secondary” capabilities of cargo and troops would be considered in a future KC-competition. If there had been any doubt up to this point what DOD really wanted this time around, the AIP should have removed it.

As for Europe, and France in particular, whining about US protectionism–well, we view this with the same amount of skepticism as we view job claims by Boeing and Northrop advanced during the competition. That is to say, bull-puckey.

France last year said it plans to replace its KC-135s with KC-30s built by Airbus. What about opening this opportunity to Boeing? We know the answer to this.

The A400M debacle is directly related to the engine selection for the transport. Airbus wanted to go with Pratt & Whitney. The European politicians dictated that a new engine be developed by European companies. The resulting delays and costs to Airbus threatened the entire company.

We’re sure our readers can point to similar examples of European protectionism.

It is certainly true that US defense contractors have had the lion’s share of European defense business, but this was largely due to the fact that for decades following World War II, the European defense industry essentially did not exist or produced equipment that was inferior to US technology. This has been changing in recent decades.

Furthermore, it should be noted that Britain’s BAE Systems derives half its revenue from the US DOD and in 2009 was DOD’s fifth largest contractor. Several other European defense companies participate in the US defense market and Airbus parent EADS sold 100 light utility helicopters to the Army and has other defense contracts.

Is there a European presence in the US that equals US sales to Europe? No, of course not. Disparities of technology, competition and protectionism on both sides is to blame.

If there is any criticism to lay at the feet of DOD in Round 3 of the tanker, and we certainly believe there is, it is that DOD did not say from the start that all it wanted this time was “just” a tanker. It would have saved everyone a lot of agony had DOD done so.

As for Europe: get over it and move on.

33 Comments on “Get over it and move on

  1. Get over it an move on is not a credible option where the integrity of the procurement system is at stake. That option would be irresponsible.

    The USAF and DoD track record is pretty dismal, especially where Boeing contracts are concerned. Why should any taxpayer sit back idly and accept this irresponsible behavior by our government?

    We are living in tough economic times, and it is essential in a program such as this that we receive the absolutely best product for our investment. Competition in the only mechanism whereby that can be assured.

    Boeing’s track record on this program is incredibly dismal, with indictments and jail terms for participants. Do you really think that a company who has stooped to the levels demonstrated will act honorably when they have no competition?

    Their political machinations are equally despicable as are those of Congress who have facilitated this folly. Congress needs to get out of the procurement business and into providing “adult supervision” that the country so desperately needs.

    Getting over it and moving on would be about the most irresponsible thing any person could do. It is not just our right to question out leaders, but an obligation, and I believe strongly that this case is one wherein we need to raise some hard questions.

    The USAF requirements have presumably been well known for over 10 years. They conducted an open competition and got a result that Boeing objected to. They protested, and on flimsy grounds the GAO sustained their protest. Then bowing to political winds the USAF decides that their requirements have changed…. That is a bunch of crapola.

    Why hasn’t anyone mentioned Boeing’s past performance, which in a competitive procurement should substantially eliminate them due to risk? They can even successfull do a system integration (DHS – Virtual Fence), much less a major system. Consider the Army’s FCS, the NRO’s Future Image Architecture – all are shambles, with billions of dollars of taxpayers money being written off with nothing to show for it. It is criminal or should be.

    We can’t afford to have Boeing be prime on the tanker program.

    This is a national disgrace of the highest magnitude. It is time to protest to our Congressional leaders to put a stop to this irresponsible behavior, and restore integrity to the procurement system.

    • Instead of whining- why not simply PLAN AHEAD and figure out how to effectively compete with the eventual replacement for the KC-10 fleet. ?

      I have yet to hear or see a good reason why Airbus- EADS did not propose a smaller plane more in size with the 767. After all, in 2001, when the lease arrangement was put forward initially on a U.S Jobs basis, Airbus/EADS claimed at that time to be able to supply6 a plane that matched the 767 at about 40 percent less. That figure was probably NOT based on the later pushed A330 model. That figure may have been realistic ONLY due to two factors.

      1) The Boeing ‘ cost’ figures were grossly overinflated by the BA military (MDC) side of the house, in keeping with the MDC corporate culture of mendacity described by a federal judge ( Milsap v. McDonnell Douglas Corp., 162 F. Supp.2d 1262 (N.D. Ok. 2001)

      2) The excessive subsidies used by or granted to Airbus/EADS in the 90’s as defined by GATT92. And no doubt a major loophole in GATT92 which did not anticipate commercial airplanes being used in any significant quantity for military use. Military Aircraft are specifically excluded from GATT92

      BTW- I have yet to hear or read a rational argument about why ” I” should buy an 18 wheeler to replace “my” old 1 ton truck that I use for hauling my ” produce'” to market 3 days a week, with only rare need for the 18 wheeler capacity for once yearly bulk sales.

      Especially, when I have to borrow money from China to subsidize my competitor and outsource a lot of jobs instead of employing my own citizens.

      Well ??

      • I think for 2001 the smaller A310 was proposed but deemed as to small by Air Force. BTW is Airbus still producing the A300?

        Buy yourself a Mercedes-Benz Sprinter with 3.0L CDI diesel engine in passenger van configuration.
        Overrun speed about 100 mph.

      • Oh come on MHalblaub, you know perfectly well EADS went with the A330 MRTT for the first round. You’ve been told this many times, why do you keep spreading the false rumor that they did propose the A310. As far as why the A310 was not proposed in 2008, well as leehamnet points it was out of production for a long time by that point, but there is absolutely no reason EADS couldn’t have proposed the A310 in 2002. Except for the fact that they did intend to take the A310 out of production and would have preferred that the USAF buy their larger and much more commercially popular A330.

      • Hey folks – PLEASE read what I said as to DATE of FIRST lease starting in 2001 after 911. There was NO bid by Airbus simply cuz they were not asked. But as part of the ongoing subsidy games and typical ” no fair ‘ mantra, they had claimed they could cut the price/cost by Boeing by 40 percent.

        From wiki – The Airbus A310 is a medium- to long-range widebody airliner. Launched in 1978, it was the second aircraft created by the Airbus consortium of European aerospace companies, which is now fully owned by EADS. The A310 is a shortened derivative of the A300, the first twin-engined widebody airliner. The A310 (along with the A300) officially ceased production in July 2007 although the last delivery was in June 1998.

        Therefore – by whatever counting method one wants to use – it was probably a A310 ” variation ” that Airbus/EADS was blathering about. That it was too small to meet the same as the 767 of course was overlooked in the PR blather at that time ( december 2001 )

        again from wiki —
        The A310 has been operated by many of the world’s airforces as a pure transport (A310-300 MRT), however several have now been converted to the “Multi Role Tanker Transport” configuration by EADS, providing an aerial refueling capability. At least six have been ordered; four by the German Luftwaffe and two by the Canadian Forces. Deliveries began in 2004.

        Guess what – a smaller tanker may work for E U countries with smaller range reqjuirements- etc.

        So we have three sizes – or maybe four Too small A310 – just right – 767 – large Kc10 – too large A30 or 777 – what happened to ‘ the customer is always right ‘ ??

  2. This is daft. Any military expenditure is an expense on a country as a whole. It does not generate jobs as you have to take money from taxpayers to buy whatever.

    That said, the responsibility of the government should be to minimise the effect on the country of defence spending. If there is a local option available, buying from a foreign supplier and exporting revenues is just stupid.

    What I don’t get is how some people seem to feel this particular contact is Airbus’ and EADS’ by right. It is a bit like trying to talk to the Iranians.

  3. The manner & reason for the exit of NG/EADS from this contract is not being reported within Europe with anything close to the frantic hype the US media seems to be stimulating.

    As leehamnet states Get over it & move on, they will.

    Despite offering the less capable & smaller airframe Boeing must be quaking in their boots at NG’s fly away cost quotation.

    Boeings costs when released will be inclusive of lifecycle & caretaker cost promises & are guaranteed to make the NG/EADS flyaway cost offer one the US goverment wished they had signed up for.

    As for the USAF putting mind over the heart & poltical interference aside, since the previous contest they have continued to preffer NG’s airframe over Boeings.

  4. Uhh PHIL … “As for the USAF putting mind over the heart & poltical interference aside, since the previous contest they have continued to preffer NG’s airframe over Boeings.

    Source ??

    Facts ??

    Opinion ??

    less capable by what measure ?

  5. “The manner & reason for the exit of NG/EADS from this contract is not being reported within Europe with anything close to the frantic hype the US media seems to be stimulating.”

    Are you saying the US press is exaggerating the EU response?

  6. Don hi,
    Re; Less capable

    I would refer you to leehamnet’s own evaluation of the contest its RFP & the two airframes.

    b1786b US press exaggeration.

    Precisely right, this process & its current direction has not even hit the broadsheets here, call me cynical if you will but there seems some slight over reaction from certain parts of the US media to anything involving the French currently, precisely why this should be eludes most Europeans

  7. Uhh PHIL??? U SAID . . .I would refer you to leehamnet’s own evaluation of the contest its RFP & the two airframes. . .
    ++++
    AFIK Scott was not on then AF evaluation team nor a member of the GAO.

    He is entitled to his opinion- but not to FACTS.

    I would suggest a reading of

    http://www.gao.gov/decisions/bidpro/311344.htm

    3. Protest is sustained, where the record does not demonstrate the reasonableness of the agency’s determination that the awardee’s proposed aerial refueling tanker could refuel all current Air Force fixed‑wing tanker‑compatible receiver aircraft in accordance with current Air Force procedures, as required by the solicitation.

    4. Protest is sustained, where the agency conducted misleading and unequal discussions with the protester, where the agency informed the protester that it had fully satisfied a KPP objective relating to operational utility, but later determined that the protester only partially met this objective, without advising the offeror of this change in its assessment and while continuing to conduct discussions with the awardee relating to its satisfaction of the same KPP objective.

    . . . (2) a key technical discriminator relied upon in the selection decision in favor of Northrop Grumman relating to the aerial refueling area of the key system requirements subfactor, was contrary to the RFP; (3) the Air Force did not reasonably evaluate the capability of Northrop Grumman’s proposed aircraft to refuel all current Air Force fixed-wing, tanker‑compatible aircraft using current Air Force procedures, as required by the RFP; (4) the Air Force conducted misleading and unequal discussions with Boeing with respect to whether it had satisfied an RFP objective under the operational utility area of the key system requirements subfactor; (5) Northrop Grumman’s proposal took exception to a material solicitation requirement related to the product support subfactor; . .

    . . . The SSAC found that Boeing’s proposal had no weaknesses in the aerial refueling area, but identified the following two weaknesses in Northrop Grumman’s proposal:

    The first weakness is related to the specified lighting around the fuel receptacle of the KC-30. The specified lighting for refueling as a receiver may provide [Deleted]. The second weakness is related to Northrop Grumman’s boom approach. The [Deleted].

    Id. at 16. The concern that Northrop Grumman’s [Deleted] was assessed under a KPP No. 1 threshold; the other weaknesses were assessed under non-KPP/KSA requirements. . .

    . . . Moreover, the record does not show any consideration by the SSAC or SSA of the fact that Boeing’s proposal was evaluated as satisfying significantly more SRD requirements than Northrop Grumman’s. . .

    . . .

    Specifically, the SSAC identified as “major discriminators” the following requirements that Boeing’s aircraft satisfied but Northrop Grumman’s aircraft did not: (1) the capability to [Deleted] (a KPP No. 1 objective); (2) the capability, [Deleted] (another KPP No. 1 objective); (3) the capability to [Deleted] (another KPP No. 1 objective); and (4) the capability to [Deleted] (a “noteworthy” non‑KPP/KSA requirement) ..

    +++++++

    Somehow – i have more confidence in GAO opinion of record than Scotts – I’m sure he understands . ..

    ….Despite having solicited proposals that satisfy as many SRD requirements as possible, there is no evidence in the record showing that either the SSAC or the SSA accounted for the fact that Boeing’s proposal was evaluated as satisfying significantly more SRD requirements in the aerial refueling area than did Northrop Grumman’s proposal. In fact, in deciding that Northrop Grumman had a significant advantage in the aerial refueling area, the SSA did not even discuss the fact that Boeing had more “discriminators offering less benefit” than did Northrop Grumman, much less that Boeing satisfied far more SRD requirements than did Northrop Grumman in this area…..

    And keep in mind that the technical knitty grittys are/were NOT the provenance of the GAO.

    Now would you please cite YOUR experts analysis ??

    • Dawn,

      this is a forum where people are allowed to publish their opinions. This is the U.S. Remember? Freedom to speak and all that. One doesn’t bully people around here like on fleetbuzz.

      Granted, you believe the 767 is a more capable tanker. Why?
      Because it is smaller? Because it is an older design? Because it is cheaper?

      You are absolutely right. This is the tanker the USAF wants. Now. But about 1 year ago. they wanted something else. They even picked something else in a competition. They did not follw procedure in that competition and it was suggested they run the competition again. Then the government changed and all the people who wanted the other tanker were replaced with people who wanted a smaller and cheaper tanker.

      Who knows what the future holds?

      • Suggest you read the RFP old and new – there were NO- repeat NO substantial or technical changes in the requirements, many were removed as nice to have but not needed. there were some clarifications.

        They just decided to limit things to what they really needed in a consistent manner

        And its DON not dawn

        Have a nice day

  8. How is this for irony (or a slap in the face)!?

    President Obama has appointed James McNerney to lead (along with an exec from Xerox) the President’s Export Council to improve U.S. exports. The President’s goal is to double exports over the next 5 years.

    I would love to see James’ efforts on any trips to Europe trying to promote U.S. exports.

    • Not aerospace but automotive:
      Look for japan, kantor, 1995, auto spare parts.

      The US forced Japan to buy spare parts for US cars they did not have,
      from manufacturers who could not be bothered to produce a right hand
      drive car that even marginaly fit the japanese market ;-)

      Talk of Chuzpe. On the other hand things ( and balances) have changed.

  9. Oh but it gets even better.
    This from the Seattle Post Intelligencer, “Obama’s trade pitch ties
    directly to the top concerns of Americans − the bleeding of jobs from the U.S.”.

    So he appoints the guy whose company is one of the biggest proponents of outsourcing american jobs overseas!?

    Absolutely brilliant!!

  10. The KC-767 is a multirole aircraft capable of carrying 19 pallets of cargo. The KC-135 could handle 6. That’s a huge increase in a KC-X tanker fleet of 180+ aircraft over legacy capacity.

    Yes, the A330 system handles more cargo. Had the KC-777 been developed, it would have had superior cargo capacity to the A330, and if the USAF wanted even more cargo with their tanker, they could have asked for a KC-747 or a A380 MRTT. It all depends on how many pallets is enough.

    Is 32 pallets inherently the “right” amount of cargo for a multirole tanker?

  11. Royce: The issue of the multipurpose role of the Tanker has been discussed extensively.

    It is obvious that the RFP called for a Tanker priority with less of a need for other services. The result would be a smaller plane at less cost.

    When the Air Force starts replacing the larger KC 10 , the emphasis will be on the range of services and adaptability needs. That will probably result in a larger plane.

    This choice was very simple and resulted after reconsideration. Why order a Hummer when all you are asking for is a pickup truck. That is basically what occurred

    • Significant cargo capacity has always been part of the KC-X concept. If the service wanted a pure tanker, it could have one. The KC-767 is a multirole aircraft. Far more so than the KC-135. I don’t see why people have this need to act like the KC-767 won’t be carrying a lot of freight. It will, just not as much as a KC-45.

  12. To: j_2h on March 12, 2010
    at 7:01 am

    Factual reporting over a rather measured response.

    J_2h, where do you find fault in those reports?

  13. Royce: Am sorry to differ over your emphasis on multiuse, You are just using it as a pivot point to differ with what was determined as the basic need of the USAF and using a definition to suit your argument.

    In lengthy discussion on this site and others, it was made clear that there is ample equiptment for additional freight and medivac, etc including the availability of commercial carriers which would in the long run be much cheaper for that extraordinary occassion when such usage is required. There will be sufficient multipurpose use for the KC 767 in its proposed form but its function is primarily as a Tanker

    The first need here is to replace flying “gas stations” …that plain and simple and that is what has been determined and recognized by NG.EADS. …and to replace them at the lowest cost.

  14. I was showing the SomeoneInToulouse that this is being covered not only in the aerospace press.

    >>You certainly don’t see the irate projection of entitlement seen from across
    the Atlantic on occasion.

    Huh? Sounds like they feel “entitled.”

    >>Factual reporting over a rather measured response.

    “measured” responses? How about “sour grapes” So where are the examples of the US coverage being different from what I have posted? Where is the “frantic hype” in the US press being referred to?

  15. “Get over it and move o”n: this is exactly what is about to happen. The political reactions, especially in France, are just the minimum communication activity towards the population, showing they do care about the issue, especially now that there are some important local elections this Week-end. And it certainly doesn’t make the big headlines.
    You are also right to say the A400M debacle is linked to the engine choice. It was Jacques Chirac’s decision to refuse Airbus’ choice for P&W. It was also Chirac’s decision to favour Forgeard, a former staff member of his cabinet. Chirac was responsible for a lot of the troubles Airbus experiences now, Matra & DASA finished the job when they ruined the great aeronautical culture builded at Airbus by true experts like Jean Pierson. They know it and pay the price now.

    There’s nothing wrong with the outcome as it is, I have no problem with a “national supplier preference” for the USAF tanker deal. Let’s see it as “the end of hypocrisy”. So yes, European will “get over it and move on”. Only, each time the USA will complain about public fundings for Airbus at the GATT, be sure the European will use this to tell them they’re not in such a position to learn a lesson to anybody. And you know what ? They’ll be right saying so.

  16. Robert Wall of AW&ST brings fresh perspective on the vitriol emanating from European capitals over the tanker.

    http://www.aviationweek.com/aw/blogs/defense/index.jsp?plckController=Blog&plckBlogPage=BlogViewPost&newspaperUserId=27ec4a53-dcc8-42d0-bd3a-01329aef79a7&plckPostId=Blog%3a27ec4a53-dcc8-42d0-bd3a-01329aef79a7Post%3a94a2083b-584f-4239-af2b-f8d37106c4e6&plckScript=blogScript&plckElementId=blogDest

    Here is a liberal quote:

    But there is clearly more to the vitriol coming out of Paris, Berlin and London: domestic politics. All three governments have huge domestic political problems they are trying to paper over.

    Gordon Brown is fighting for his political survival in London in advance of the May general election. Nicolas Sarkozy’s domestic political agenda has stalled since the economic downturn set in and there is more attention in Paris on whom he and his wife are respectively sleeping with than any political issues. And in Berlin, Angela Merkel’s coalition government also is struggling to send out a coherent political message, with infighting between the coalition parties.

    Nothing is more opportune, at such a time, than some good old fashioned America bashing. These days, no European political is going to lose a vote for speaking ill of Washington.

    When Europe still had a love-affair with then-candidate Obama, he called Europe out on the situation when he said: “in Europe, there is an anti-Americanism that is at once casual, but can also be insidious.” It was a comment that was notably ignored in Europe.

    • Aurora, with all due respect, get a life! ;-)

      You seem to revel in Airbus/Europe bashing. If “vitriol” is what you’re truly looking for, I’d suggest you take a look at the comment sections at:

      (i) http://blog.seattlepi.com/aerospace/
      (ii) http://seattletimes.nwsource.com/html/boeingaerospace/
      (iii) http://www.fleetbuzzeditorial.com/

      Excluding (iii), perhaps you could help me out in finding relevant European based blogs with a similar bad signal to noise ratio?

      As for Robert Walls comment; Christina Mackenzie who is AW&ST’s French correspondent has already debunked Mr. Wall’s assertion:

      http://www.aviationweek.com/aw/community/persona/index.jsp?newspaperUserId=127857&plckUserId=127857

      Christina Mackenzie wrote:
      I hate to argue with Robert but I think that 99% of the general public in the UK, France and Germany is totally unaware of the tanker issue and couldn’t care less.

      In France the newspapers have not written a word about the Sarkozy couple, sticking to their line of conduit that the private life of public figures is private. The public is not even particularly interested in the current regional elections which scored record abstention rates in the first round of voting last Sunday and I really haven’t seen much here to support claims of America bashing. Of much more interest is the fact that spring seems to have arrived!
      3/17/2010 5:29 PM CDT

  17. Pingback: Analysts urge boycott of French whine « Machinists News

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>