“More has been costing more”

With the Pentagon’s announcement this week that a major push has begun to wring costs out of the defense budget, will this macro approach trickle down to one of the largest defense procurements in decades–the KC-X tanker recapitalization?

Remember when Defense awarded Northrop Grumman the KC-X contract in 2008? A key, if not the key, to winning was, “More, more, more.”

Now Ashton Carter, the top procurer in DOD, says “more has been costing more.”

Given one advantage Boeing has over EADS in the current KC-X competition–life cycle and MilCon costs–will “more, more, more” cost EADS the contract?

Here is Carter’s six page memo, obtained by DOD Buzz.

Boeing’s KC-767 has lower life cycle costs due to a lower fuel burn than the larger KC-45 offered by EADS. The spread is in dispute. Boeing claims a 24% better fuel burn, before taking into account the addition of winglets (which in commercial service lowers consumption about about 4%). Airbus claims the spread is only 6% before the winglets. Either way, over the 50 years life expectancy, this is real money.

Boeing also claims the KC-767 will require less new infrastructure and ground support equipment to accommodate and support the smaller, lighter KC-767.

EADS says its larger KC-45 is more mission-capable because it carries more fuel, more troops and more cargo–the “more, more, more” cited by the USAF in 2008 in awarding the contract to then-prime contractor Northrop.

But “more, more, more” is only worthwhile if it is used. Otherwise this only added to the operating cost of the airplane, to no benefit to the USAF.

With DOD’s emphasis now on cost-cutting, will this work against EADS and in favor of Boeing?

Meantime, Alabama is revising its incentive package to attract EADS and the KC-45 tanker to Mobile, according to this article.

8 Comments on ““More has been costing more”

  1. In reality, there is no more, more, more in the KC-30, except more fuel burned, whether it is the 6%-10% EADS calims, or the up to 28% Boeing claims, it is still ‘more’. MilCon costs are a much closer consideration to the ‘more’ equasion. MilCon will need to be funded seperately, but at the same time SDD and production is funded. That means ‘more’ up front costs for both airplanes, and we really need to look at those costs and select the minimum funding needed to support the KC-X at its selected home bases.

    In all three of these costs areas, the smaller offer clearly has the advantage.

    The total projected costs of the KC-X has always been more than just the unit costs of the tankers alone.

    How much will the spares cost? The PW-4062 engine has a much lower cost GE’s CF-6-80E, and lower overhaul costs. But what about tires, brakes, pumps, lighting, Comm/Nav systems, and other parts with low MTBF?

    The ‘more’ capability of the KC-30 in air refueling has been debated and disputed by myself and others here. Now the question becomes is the ‘more’ pax and cargo capability justified for the KC-30? I don’t think so. Tankers are simply not the most efficent way to move cargo or pax. Yes, they have and will continue to move these, but how often is that capability used? The answer is less than 3% of all tanker sorties flown.

    So, what is that 3%, or even if it more than triples to 10% cargo/pax carrying mission capability, worth in real dollars to the USAF and DOD?

    To those who will pay the bill for this not very used capability, the taxpayers, it is next to worthless. Taxes and the national debt are increasing faster than the tax payer can keep up.

    This alone should, in reality eliminate the EADS offer, never mind the trade balance it will create, or the number of jobs EADS or Boeing claims will be created (although that is a very important selling point). The US is more than $13 TRILLION in debt today, can we afford to send ‘more’ borrowed money to Europe? Obviously no

    This brings the USAF back to the reality that if it cannot select the KC-767NG, than it might as well begin reengining the KC-135E as the reall lowest cost option, we already know what the LCC, fuel burn and MilCon costs will be.

    • Mr. TopBoom, sitting in his cubicle, looking through a small window
      onto a narrow segment of the real world, receeding fast.

      You are missing out on what have been the major and continuous
      achievement processes in the industry.

      Increasing MTBF ( even in view of quite an increase in systems complexity ), reducing scheduled and unscheduled maintainance, longer airframe life,
      improved in-system diagnostics, …

      Some of this you can backport onto an existing construction, but with most of
      the newer benefits you will just have to go without.

    • Another typical Topboomer:

      “In reality, there is no more, more, more in the KC-30, except more fuel burned, whether it is the 6%-10% EADS calims, or the up to 28% Boeing claims, it is still ‘more’.”

      You and the original study missed to mention that for “28 %” or “24 %” more fuel burn per hour you’ll get over 40 % more pax (3 class seating) and a 70 % higher 463L capacity at a higher economic cruise speed.

      “The total projected costs of the KC-X has always been more than just the unit costs of the tankers alone. “

      Sometimes I can agree with you.

      “How much will the spares cost? The PW-4062 engine has a much lower cost GE’s CF-6-80E, and lower overhaul costs. But what about tires, brakes, pumps, lighting, Comm/Nav systems, and other parts with low MTBF?“

      What about the spare parts cost for an aircraft out of production or just in production for USAF?

      “Now the question becomes is the ‘more’ pax and cargo capability justified for the KC-30? I don’t think so. Tankers are simply not the most efficent way to move cargo or pax. Yes, they have and will continue to move these, but how often is that capability used? The answer is less than 3% of all tanker sorties flown.”

      “Flown” is the word. Due to economic reasons KC-X should be used on non refueling missions as often as possible to release the fuel guzzling C-17 and to avoid another KC-135 aged aircraft.

      “So, what is that 3%, or even if it more than triples to 10% cargo/pax carrying mission capability, worth in real dollars to the USAF and DOD?”

      I would estimate 50 % or more for non refueling missions 10 years after IOC for KC-X.

      “The US is more than $13 TRILLION in debt today, can we afford to send ‘more’ borrowed money to Europe? Obviously no”

      Is it better to send more borrowed money to the Arab countries by burning fuel on C-17 missions?

      “This brings the USAF back to the reality that if it cannot select the KC-767NG, than it might as well begin reengining the KC-135E as the reall lowest cost option, we already know what the LCC, fuel burn and MilCon costs will be.”

      Then you’ll have to check 4 nearly unused engines instead of 2 per aircraft and a huge amount of unexpected aging problems in future. How reliable a reengined KC-135E will be?

      How many KC-135 hangars are as old as the aircraft? How many are really full hangars, how many are just nose dock and how many are needed only due to the age of the KC-135?

      According to the article “’more, more, more’ is only worthwhile if it is used. Otherwise this only added to the operating cost of the airplane, to no benefit to the USAF.” Also more reengined KC-135Es are of no use because this aircraft type is hardly used.

      One of the objectives mentioned by Ashton B. Carter in his memorandum is

      “Avoid program turbulence”.

  2. “You and the original study missed to mention that for “28 %” or “24 %” more fuel burn per hour you’ll get over 40 % more pax (3 class seating) and a 70 % higher 463L capacity at a higher economic cruise speed. ”

    No, you will only get 40 percent more pax in a commercial seating configuration. NG listed the KC-45A capacity at 226 and Boeing said the KC-767 was 190 seats in a military configuration. This is a 19 percent difference, so even using a meaningless metric such as this one the KC-767 comes out ahead. Besides a commercially chartered 777, 747 or A330 will always have much lower fuel burn than a tanker anyway so why would you really even want to use the tankers as troop movers unless you have too.

    “70 % higher 463L capacity at a higher economic cruise speed.”

    You again are making a lot of assumptions here. That’s a 70 percent higher number in pallet positions, but can you utilize all of those positions effectively given that the KC-45 proposed last time could carry no more weight than the the KC-767AT? How about effectively unloading a KC-45 given that the main floor isn’t level. An A330F would be a much more effective freighter but at around a 12,000 lb weight penalty the A330F would suffer in in scoring in comparison with the baseline KC-45A in the KC-X scoring process since the Pentagon will not be giving extra points for greater cargo capacity anyway.

    The 2010 QDR calls for ending C-17 production, buying only 67 or so C-130Js in the next six years and starting development of a new strategic airlifter. The Pentagon is clearly putting no emphasis on additional cargo or pax capacity in the next half a decade. In addition for the first time it puts a large emphasize on efficiency and even reducing CO2 emissions. The more, more, more philosophy is clearly not supported by the Pentagon’s leadership in the KC-X RFP as drafted or in the larger policy realm.

    The only place in the RFP where more is a plus is in fuel offload. The IFARA model will give additional points for being able to offload more fuel in the 4 mission scenarios being used this time. Other than this metric more, more, more is a definite negative. We should be able to make some more intelligent guesses on the value of the additional fuel offload capacity to the EADS entry once both manufactures provide more detail on their bids before the July 9 submission deadline. But when discussing the advantages of the larger airplane you really need to restrict your argument to more fuel offload, everything else is just background noise.

    • Dear John,

      the assumption was set up by a study paid by Boeing – both aircraft operate at MTOW. Therefore you can’t compare fuel burn for a full aircraft with one where one quarter of the seats is not occupied.

      “NG listed the KC-45A capacity at 226 and Boeing said the KC-767 was 190 seats in a military configuration. This is a 19 percent difference, so even using a meaningless metric such as this one the KC-767 comes out ahead. “

      The thing is you can put much more troops on a KC-45 than offered but NG or now EADS won’t offer more because then a bigger water supply also has to be offered. Where do you stow the soldiers gear on a KC-767? Maybe inside the additional fuel tanks.

      “Besides a commercially chartered 777, 747 or A330 will always have much lower fuel burn than a tanker anyway so why would you really even want to use the tankers as troop movers unless you have too.”

      Because a C-17 burns twice as much fuel and unrefueled range is much shorter. For the slightly higher fuel burn rates on cargo missions Air Force gets pilot training nearly for free.

      “You again are making a lot of assumptions here. That’s a 70 percent higher number in pallet positions, but can you utilize all of those positions effectively given that the KC-45 proposed last time could carry no more weight than the the KC-767AT?”

      I think you mix up Australian KC-30 and KC-45. The KC-30 can already carry about the same weight just on the lower cargo floor as a fictional KC-767AT on the upper deck.

      “How about effectively unloading a KC-45 given that the main floor isn’t level. An A330F would be a much more effective freighter but at around a 12,000 lb weight penalty the A330F would suffer in in scoring in comparison with the baseline KC-45A in the KC-X scoring process since the Pentagon will not be giving extra points for greater cargo capacity anyway.”

      Do you have a source or a reason for your 12,000 lb? I won’t think the lowered gear is so heavy.

      “The 2010 QDR calls for ending C-17 production, buying only 67 or so C-130Js in the next six years and starting development of a new strategic airlifter. The Pentagon is clearly putting no emphasis on additional cargo or pax capacity in the next half a decade. In addition for the first time it puts a large emphasize on efficiency and even reducing CO2 emissions. The more, more, more philosophy is clearly not supported by the Pentagon’s leadership in the KC-X RFP as drafted or in the larger policy realm.”

      USAF got enough C-17 but got no economic freighters. Why do you think airlines like Hawaiian switched from B767 to A330?

      “The only place in the RFP where more is a plus is in fuel offload. The IFARA model will give additional points for being able to offload more fuel in the 4 mission scenarios being used this time. Other than this metric more, more, more is a definite negative.”

      That’s why NG left and told the competition was stacked. USAF orders a cargo floor but won’t rate this capacity. Inside the fuel burn calculations you can find that only 1 % of all missions are expected to be cargo or troop moving missions. On what ground does USAF predict that? An IFARA model for airlift is in my eyes necessary to access both aircraft.

      “We should be able to make some more intelligent guesses on the value of the additional fuel offload capacity to the EADS entry once both manufactures provide more detail on their bids before the July 9 submission deadline. But when discussing the advantages of the larger airplane you really need to restrict your argument to more fuel offload, everything else is just background noise.”

      Well, USAF restricted assessment of KC-X aircraft to aerial refueling only. Why should I restrict my thoughts?

  3. Dear MH

    “the assumption was set up by a study paid by Boeing – both aircraft operate at MTOW. Therefore you can’t compare fuel burn for a full aircraft with one where one quarter of the seats is not occupied.”

    No, your point is not valid, the RFP only requires a minimum number of troops to be transported. Metrics such as fuel burned for passenger mile is not a KC-X criteria and besides in a military pax layout the 767 is actually more efficient than the A330 solution. Boeing’s 7 plus across fuselage and LD2 cargo containers may not work as well for PAX as the A330, but when you are just stacking 463L pallets two across Boeing’s narrower fuselage will actually be more structurally and space efficient.

    “The thing is you can put much more troops on a KC-45 than offered but NG or now EADS won’t offer more because then a bigger water supply also has to be offered. Where do you stow the soldiers gear on a KC-767? Maybe inside the additional fuel tanks.”

    How many military deployments have you been on? I’ve been on a few, I have always traveled on commercial air to a point just outside of theatre, from there, I have always climbed on a C-130 or C-17 to fly into theatre. As soon as I have hit the ground you don’t sit around on the tarmac unloading things, ideally you want to get off with your gear and supplies as fast as possible and get bird out of there, or park it if you need to move stuff out at a later time.

    This model works, its far more efficient, combat effective and cost effective than using tankers for troop transport. Besides where are you going to park something as big as an A330 in Bahgram or Kandahar to spend hours unloading the thing? It’s not like you have a gate crew with specialized equipment and everything loaded up in nice LD3’s do you? Your model is not realistic for combat deployments nor does it have any relevance to this competition.

    “USAF got enough C-17 but got no economic freighters. Why do you think airlines like Hawaiian switched from B767 to A330?”

    That’s why there is such a thing as FEDEX for the small have to be there soon packages. On the less than 3% of all tanker missions when the USAF really needs to haul some palatalized cargo in a pinch and a C-17 isn’t available a KC-767 will do just as well as an A330 for the limited amount of cargo capacity needed. Again the extra cargo capacity is not an advantage according to the current RFP or according to the customer as specified in the latest QDR, the point is not worth even bringing up any more.

    “That’s why NG left and told the competition was stacked. USAF orders a cargo floor but won’t rate this capacity. Inside the fuel burn calculations you can find that only 1 % of all missions are expected to be cargo or troop moving missions. On what ground does USAF predict that? An IFARA model for airlift is in my eyes necessary to access both aircraft.:

    If 50 plus years of real world data isn’t good enough for you I don’t what would be, and there will most certainly not be a cargo or troop moving scenario used in the IFARA model. Better save that one for the selection of the next airlifter : )

    “Well, USAF restricted assessment of KC-X aircraft to aerial refueling only. Why should I restrict my thoughts?”

    Because you are not the customer. If you have a $35 billion check to write Airbus for 179 tankers your unrestricted thoughts would be relevant, but you don’t and only your logic and thoughts as far as they concern the rules of the current RFP and current USAF strategy are relevant. In this area you have simply decided to invent your own rules since the existing rules don’t favor the only valid solution there is in your mind, an Airbus victory in this competition.

    • Dear John,

      my point was the study compared two full aircraft but forget to mention what full is for both aircraft quite different. Even the “24 %” are true a full A330-200 give you a least 30 % more revenue.

      “No, your point is not valid, the RFP only requires a minimum number of troops to be transported.“

      We can talk about the tankers in two ways. One way is what the best aircraft according to the RFP is and the other way is looking beyond the somehow limited range of the USAF.

      “Metrics such as fuel burned for passenger mile is not a KC-X criteria and besides in a military pax layout the 767 is actually more efficient than the A330 solution.”

      I doubt that any B767 variant is more efficient than the actual Australian KC-30.

      BTW, why isn’t fuel burn per pax/troop a KC-X criteria? That you can read within section 201 of the “Weapon Systems Acquisition Reform Act of 2009” (WeSARA2009): “full consideration of possible trade-offs among cost, schedule, and performance objectives for each alternative considered”. By neglecting to assess the airlift capability required by RFP of the KC-X program some lawyer may think the RFP isn’t kosher.

      “Boeing’s 7 plus across fuselage and LD2 cargo containers may not work as well for PAX as the A330, but when you are just stacking 463L pallets two across Boeing’s narrower fuselage will actually be more structurally and space efficient.”

      B767 is so space efficient that the loadmaster have to walk over the pallets to reach the other end of the aircraft. A 463L pallet is about 88 inches width. Cross section of a 767 is 186´´. Therefore you can’t load pallets with a cargo height of 96´´ side by side.

      The LD3 is the most commonly used aircraft container worldwide. For a fast movement of troops inside US with civil aircraft and transition on a KC-X LD-3 containers are the best option. On a KC-767 troop gear has to be stowed on the main deck accompanying the soldiers and therefore reducing the amount of troops.

      “How many military deployments have you been on? I’ve been on a few, I have always traveled on commercial air to a point just outside of theatre, from there, I have always climbed on a C-130 or C-17 to fly into theatre.”

      Exactly that way of traveling several generals want to avoid. It’s nonsense to use a tactical or strategical airlifter to move troops. Also it’s a waste of time. Only in case troops are moved directly to the fight on the battlefield they want to use C-130 or C-17. A civil aircraft moving troops is a legal target for the enemy.

      “As soon as I have hit the ground you don’t sit around on the tarmac unloading things, ideally you want to get off with your gear and supplies as fast as possible and get bird out of there, or park it if you need to move stuff out at a later time. “

      One LD3 for 20 soldiers should be enough (159 cu ft). Fast to unload for well trained soldiers.

      “This model works, its far more efficient, combat effective and cost effective than using tankers for troop transport.”

      Any proof for this claim except USAF does it today.

      “Besides where are you going to park something as big as an A330 in Bahgram or Kandahar to spend hours unloading the thing?”

      Ask UPS, FedEx or DHL about this. Did they use BC-17? How much ground time could be saved due to the fact USAF needs lees aircraft?

      “It’s not like you have a gate crew with specialized equipment and everything loaded up in nice LD3′s do you?”

      Equipment to load LD3 containers is standardized. Is where one USAF airbase without the equipment to load LD3 containers? How is main deck reached on KC-10 and KC-135 today?

      “Your model is not realistic for combat deployments nor does it have any relevance to this competition.”

      That’s one of my questions: why doesn’t it have any relevance to this competition (see act above).

      “That’s why there is such a thing as FEDEX for the small have to be there soon packages. On the less than 3% of all tanker missions when the USAF really needs to haul some palatalized cargo in a pinch and a C-17 isn’t available a KC-767 will do just as well as an A330 for the limited amount of cargo capacity needed.”

      Your argument is USAF is going to operate the cargo and tanker fleet right in the same way as it’s done today. That’s quite the opposite of what several generals said before the contest. (During Iraq war it was DHL and not FEDEX)

      “Again the extra cargo capacity is not an advantage according to the current RFP or according to the customer as specified in the latest QDR, the point is not worth even bringing up any more.”

      The question still remains, why are airlift operations are not assessed despite the fact airlift is an essential part of the RFP?

      “If 50 plus years of real world data isn’t good enough for you I don’t what would be, and there will most certainly not be a cargo or troop moving scenario used in the IFARA model. Better save that one for the selection of the next airlifter : )”

      If 50 plus years of real world date won’t reflect the capabilities of a new aircraft you have to run simulations. Before running computer simulations you’ll have to do one thing: THINK! To run an IFARA model for C-X neglecting airlift capabilities of KC-X is pure idiocy.

      “Because you are not the customer. If you have a $35 billion check to write Airbus for 179 tankers your unrestricted thoughts would be relevant, but you don’t and only your logic and thoughts as far as they concern the rules of the current RFP and current USAF strategy are relevant.”

      Every US taxpayer is the customer and US law is relevant.

      “In this area you have simply decided to invent your own rules since the existing rules don’t favor the only valid solution there is in your mind, an Airbus victory in this competition.”

      I wonder why many circumstances maybe preferring a non Boeing aircraft are disregarded (e.g. higher economic speed). I would have no problems with a KC-767NG selected after a real competition.

      The only valid solution for me is a detailed analysis of how KC-X is going to be used depending on type of aircraft offered. The current competition even made the assumption a KC-X will operate in exactly the same way a KC-135R did. That is in my eyes a violation of the WeSARA2009.

      Nowhere in the current RFP impact of the aircraft offered on C-17 fleet is considered or on future acquisitions (next airlifter). WeSARA2009?

      We are talking about $35 Billion ($40 Billion before NG made an offer). Therefore taxpayers can expect a little bit more than a degree 0 prediction of the future.

      I always tried to look at the total impact. Nobody could give me some sound estimation about the impact of a higher domestic content vs. an additional final assembly line producing not only KC-X.

      About Christmas time we will hear which aircraft is best according to RFP.

      So John, don’t hide yourself behind the RFP. Try to explain why the KC-767 is the better aircraft for US.

Leave a Reply

Your email address will not be published.