6 more months makes sense

(Updated 0730 AM PDT with references to EADS North America COO John Young and the “KC-35.”)

Giving Boeing six more months to come up with a revised bid is a prudent and reasonable thing to do. Here’s why.

  1. Why not? It gives the appearance of fairness and the fact of fairness. Besides, at the EADS media day immediately preceding Farnborough, EADS North American COO John Young predicted the process would take to March anyway. What’s three more months after that?
  2. Boeing and Northrop will have to “sharpen their pencils,” as DOD procurement chief John Young (no relation to the EADS-NA John Young) put it, and come up with a better price, benefiting taxpayers.
  3. Northrop and Boeing may sharpen the technical characteristics of the airplanes, providing a better product for the Air Force. We think a KC-777 is a non-starter–it’s just too big for the KC-X (it’s better suited for the KC-Y or KC-Z, as our chart on our Corporate Website this week shows). The 767-400 is the only logical alternative Boeing has to offer for the KC-X competition, even if it still falls short compared with the KC-30 (also see the chart). But what if Northrop responds with a KC-30 powered by the fuel-sipping GEnx engine? This cuts the KC-30 fuel consumption by 15%, providing a better life-cycle cost and thus benefiting the taxpayer. Airbus already did the analysis of an A330-powered GEnx airplane when it first proposed Version 1 of the A350. The GEnx is now certified for the 787, so certifying it for the A330 should be of little concern. We’ll call a GEnx-powered KC-30 the “KC-35.”
  4. Northrop could propose a “KC-33,” a tanker based on the larger A330-300, though we don’t think that’s necessary.
  5. Boeing’s “KC-764” could be proposed with the GEnx, which would improve the performance of the 767-400 as well as the fuel economy. NA KOA (remember them?) proposed such an airframe-engine combination as part of its response to the Request for Information from the Air Force at the start of Round Two of the competition, and it had been in touch with Boeing to partner with Boeing on such a project, so there is already some research completed on this. (NA KOA really wanted to offer a tanker based on the 747-400, readers will recall, and filed a protest with the GAO when Boeing refused to go along. The GAO dismissed that protest and last month dismissed NA KOA’s request for reconsideration.)
  6. Adding six months to the process won’t make any difference in the operation of the KC-135 fleet.

Giving Boeing another six months will likely produce better pricing, perhaps a better plane and perhaps better life cycle costs. DOD should grant Boeing’s request.

Update, 2:00PM PDT: IAG has a new podcast with Boeing IDS spokesman Dan Beck on the Boeing request for six more months.

3 Comments on “6 more months makes sense

  1. What we find intersting in the podcast was that Boeing is adament they will not know what aircraft to offer until the new RFP comes out.

    That is inconsitent from what they told us on Sept. 22, 2006 just a few before the draft RFP on the previous go-around came out. At that time they told NA KOA they had “indications” from the USAF they only wanted a medium sized aircraft and that is why they would not provide NA KOA with the needed 747-8 data. The USAF did not want a large platform.

    They were so certain [then] before the final RFP came out for attempt #2 that the USAF wanted the right sized 767. What has changed?

  2. RE: “Giving Boeing another six months will likely produce better pricing, perhaps a better plane and perhaps better life cycle costs.”

    II admire the optimism. In six months you may have more warm feelings concerning costs, but you won’t know if it truly is ‘better’ for years and years. I have a shelf-full of books (I’m sure you do to) on all the various military cost, pricing and acquisition issues studied over the years. I would say not one of them contains data that would support the idea of ‘better’ numbers through delay.

    Perhaps Norm Augustine in his ‘Rules’ book comes closest: all change costs more.

  3. Pingback: Predictable and disappointing « Leeham News and Comment

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