PNAA conference: EADS likely to win tanker contest

We’re at Day 1 of the Pacific Northwest Aerospace Alliance conference in Lynnwood (WA) and at the Defense Focus Day co-organized by the Pacific Northwest Defense Coalition, consultant Michel Merluzeau of G2 Solutions (Kirkland, WA) predicted EADS will likely win the KC-X competition.

Before the Francophiles go crazy, Merluzeau favors Boeing’s KC-767.

Merluzeau believes the capability for longer-range, greater fuel-carrying capability of the EADS KC-45 will be the deciding factors, as expressed in the IFARA matrix. The KC-30, as it was then known in 2008 when Northrop Grumman won the competition, scored better in IFARA. It also scored better than the KC-767 in IFARA that was inadvertently distributed by the USAF late last year.

IFARA scores the tankers on a variety of metrics and the larger KC-45 (or KC-30) bested the KC-767 in every category.

27 comments on “PNAA conference: EADS likely to win tanker contest

  1. Pingback: Tweets that mention PNAA conference: EADS likely to win tanker contest « Leeham News and Comment -- Topsy.com

  2. That can’t be news to anyone following the program. yhe question is, how much better.
    if the a330 IFARA is “just” 10% better than the b767, and it’s price is 15% percent higher it doesn’t matter that it’s better – it still loses.
    if the a330 IFARA is 20% better it’s better value despite being more expensive.

    So Leehamnet, any light you can shed on the relative numbers this time around?

  3. Well, this, the IFARA scoring, is already known based on what has been released publicly. The RFP says there is not to be any additional credit for exceeding the stated requirements, so I see the IFARA scoring for each aircraft at 1. The USAF price adjustment, based on the IFARA score alone cannot be used in detemining who gets the contract.

    There still is two other major scoring criteria that each is, or will be scored against, the LCC and MilCon requirements. We don’t know how those scores panned out, they have not been publicly released. Each of the 3 scores are used by the USAF to make price adjustments to each bid.

    It seems to me that EADS’s score for the IFARA only becomes an advantage if the final adjusted price for each offer is within 1% of each other, and if the Boeing overall adjusted price is more than 1% of the EADS adjusted price, then Boeing wins the contract.

    Also each OEM’s final and best price/configueration for their respective offers is due to the USAF at Wright-Patterson AFB, OH by this Friday, 2/11/11.

    The final overall selection also must meet with Congressional approval. This is still a major challange for EADS, an the USAF knows that.

    • I should have said “and if the Boeing overall adjusted price is more than 1% LOWER of the EADS adjusted price, then Boeing wins the contract.”

    • Are the new IFARA scores public somewhere? please post that link!

      There is (initially) no credit for exceeding requirements, but IFARA is not a requirement – it is an evaluation of how many kc-135′s can be replaced by a single kc-X.
      IFARA introduces the competitor’s characteristics to a set of (what the AF thinks of as) probable and desired operational constraints and demands. The final outcome is a total number of a/c required to meet demand subject to the constraints. this number is used to directly scale the LCC and the offerers best price and forms part of the way to estimate the total cost of ownership of the different proposals.

      Thus, the IFARA comes to play before the 1% cost difference gate.
      you can read this from:
      https://www.fbo.gov/index?s=opportunity&mode=form&tab=core&id=d6a6105de8722a69e0b1bffdaeda007c&_cview=1

      • Well, it seems Mr. Michel Merluzeau implied the IFARA scores favored the A-330MRTT over the KC-767NG. In your own story you wrote “IFARA scores the tankers on a variety of metrics and the larger KC-45 (or KC-30) bested the KC-767 in every category.” While I agree the individual matrix scores for each offer have not been publicly released, the fact the A-330 “bested” the KC-767 indicates there is enough public information to make that conclusion, doesn’t it? Shortly after the USAF screw up on 1 Nov. didn’t Boeing float the idea they may not win?

      • As said before, the IFARA score indicates the number of kc-135′s that can be replaced by a single kc-x of either competitor. I’d hope for EADS/Airbus that the larger a330 bests the smaller 767 in all metrics. The question remains whether the Ab off is enough better to justify it’s higher cost.

  4. Hopefully it’s over some day.
    I am so annoyed of this whole thing that (despite being European) I don’t care who wins anymore. Hand it to Boeing and the thing is over. The USAF got what it wanted: a better price.

  5. I don’t see Big B buying this one as they are already in the tank to far on the 7late7 and lack of sales on the 747-8, plus they need to start a new single-aisle ASAP. Buying the tanker could well be the straw that breaks the back. Fixed Price these days means Fixed Price; you can’t buy it then negotiate it up later. However there have been some weird things going on in the world of Defense Acquisition lately. Sole Source contracts worth billions and nobody says a word, very strange in deed. I think the Tanker is a price Shoot-Out to try and minimize the scope of any protests and that is just good planning on the AF side. So I guess we will see in about 30 days who gets the gold ring, so to speak.

  6. Wow Jay, how wrong can you be? Unlike EADS, Boeing is in business to make money so would not be intentionally “buying” this contract. Boeing has often turned down the “opportunity” to buy 737/A320 contracts with various airlines. e.g. JetBlue. Boeing also has said they DON’T plan to go with the clean sheet until 2016. As for Fixed Price contracts you obviously haven’t been watching EADS and the EU countries “negotiations” over the A400 fixed price contract.

    • Jim :
      Boeing is in business to make money

      Shame they are doing so badly at that.

      As for the JetBlue contract, do you really think that Airbus is losing money on that? What’s your source for that?

    • “Unlike EADS, Boeing is in business to make money so would not be intentionally “buying” this contract. Boeing has often turned down the “opportunity” to buy 737/A320 contracts with various airlines.”

      So that is why the Ryanair fleet is all 737 and Airbus refuses to even speak with them (Ryanair) after negotiations with Boeing were stopped?

    • Hmpf. Boeings Leahy sits in the White House ;-)

      On the other hand Dreamliners seem to have been
      sold at “clearing out sales” prices.

      • How do you know that, Uwe? None of us have any idea how much Boeing, or Airbus sells airplanes for to the airlines. All we can go by is the published pricing list for each OEM.

        So, we don’t know the B-787s were sold at “clearing out sales”, or any other pricing other than published prices, do we? Yes, we know some of each OEMs do get discount pricing, but the amount of those discounts are closely guarded secrets.

        • could I reroute you over the following pdf:
          http://www.flightglobal.com/blogs/flightblogger/2010/12/21/Flightblogger-787-sales.pdf ?

          Jon Ostrower researched that 787-8 sales in the initial 3 years ranged from $83.5 million down to $65.7 million ( sold in that timeframe were 448 frames, predominantly -8 models. ) average is said to be around $76 million.
          In view of the Dreamliner purportedly being the next sliced bread revolution
          over the barely worthy competition that has been selling at ~$140 million the
          reason for why Boeing builds airplanes is probably not for making profits.
          ( Hmm, wasn’t Airbus the alleged hobbyist ;-)

          Simply thinking that one could cut costs in half in an industry that traditionally fights for % gains in the low digits raised the question of acceptable qualification of the managers “buying” such a proposition outright.

  7. The USAF need to get this over with ASAP.

    Both planes are good – but 1 is better than the other.

    When that plane is selected , then the game begins, the contract needs 2 things in place -

    Fixed Price – means Fixed Price – change it and loose the next batch of aircraft.
    Fixed Delivery Schedules – Failure isn’t an option – miss deliveries means losing the contract in total.

    Let’s see who would get the prize then?

    • who would want it.
      Fixed price is all nice and good, when you’re working with fixed requirements. Gov’t contracts have a tendency to grow in requirement over time as several generations of politicians need to be placated.
      Fixed delivery is all nice and good until you factor in katrina2, strikes or other “acts of god”.
      Taking away the contract is all nice and good until you realize you’ve just cut off one of only two tanker builders in the world and the other one knows you’re up brown creek without a paddle if you don’t replace those (by then) ancient legacy tankers.

      fantasy is generally all nice and good until you wake up and reality hits you in the face. To many commenter’s take the low road and look only at the short term to substantiate their unfounded opinion.

      • Ok – Fixed price with fixed requirements, USAF have to be fair to the companies, should they make changes after the contracts are awarded then it’s got to be paid for.

        Fixed delivery time table x # per month or # over 12 months ( Acts of God permitting ), the workforces of both companies would be foolish to strike – it would cost them their jobs.

        Throw another shrimp on the Barbie

      • Yeah, fixed requirements… nice dream.
        Problem is that before the program is finalized, no-one knows the exact scope of options/ choices/ risks and opportunities. it’s those nasty unknowns that do you in.
        And if the AF does order a change or addition of the contract, who decides what that change is worth?

        And a fixed delivery per set time – because it’s easy to recoup 2 lost weeks due to uncontrollable circumstances without significant additional cost. Let’s factor in that risk and make the workforce sit around ~5% of the time so we have that margin to recoup a possible schedule slip. Ofcourse, the further you get along in the year, the greater the risk… And who will pay for that?

        and let’s put that no-strike clause to the test.
        I, the employer ‘know’ my workforce won’t strike whatever I do to them: they’ll be out of a job. What shall I do with that knowledge… Sweatshops and Child labor come to mind.

  8. KC135TopBoom :How do you know that, Uwe? None of us have any idea how much Boeing, or Airbus sells airplanes for to the airlines. All we can go by is the published pricing list for each OEM.
    So, we don’t know the B-787s were sold at “clearing out sales”, or any other pricing other than published prices, do we? Yes, we know some of each OEMs do get discount pricing, but the amount of those discounts are closely guarded secrets.

    We [should consider this (Edited)]:

    “The push to regain pricing power on the 787-8, which aims to cut its fuel burn by 20% compared to today’s 767, is evident in the aircraft’s changing list price, which debuted in August 2005 on Boeing’s website for $125 to $135 million. Boeing says that price was in reference to catalogue pricing messaged in the early launch days of the program in comparison to the 767-300ER.

    The price today, again boosted on December 14, places the 787-8 average catalogue price tag at $185.2 million, more than 40% higher than first envisaged. That increase is compared to an average 19-22% jump in the price of the 777 and 767 over the same period, respectively.”

    http://www.flightglobal.com/articles/2010/12/21/351212/flightblogger-the-price-of-boeings-787-sales-success.html

  9. Pingback: Aviation Fun and Stuff » Movie Monday – February 7 – The Indispensable KC-135 (Update1)

  10. Just noted Leehamnews edited my original comment. I did not mean that as a dig, I would describe myself as sadly [...] in many of these matters. Apologies for the confusion.

  11. Pingback: Movie Monday – February 7 – The Indispensable KC-135 (Update1) | AviationBrief – Your Daily Aviation Intelligence Brief

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