Laying the groundwork for a Boeing appeal on KC-X

Update, Dec. 1: George Talbot of The Mobile Press-Register has this interesting interview with Michael Wynne, a former top defense department procurement official, who suggests a solution to the KC-X quandary.

Also, at 12:50pm PST: Bloomberg has this story with Boeing BDS CEO Dennis Muilenberg weighing in. It seems the USAF has more ‘splainin’ to do.

Update, Nov. 30, 8PM PST: The New York Times confirms EADS opened Boeing data, Boeing did not; Boeing threatens protest.

Dominic Gates at The Seattle Times has this report.

Original Post:

In what is a wholly transparent move, Boeing is beginning to lay the groundwork for an appeal in the event EADS wins the KC-X contract.

Loren Thompson of the Lexington Institute, published a commentary yesterday (we only saw it today) entitled “Tanker flap reflects pattern of bias.” In it he makes several allegations, the most serious of which is that EADS read the proprietary document mistakenly sent by the USAF to EADS about Boeing performance data of the KC-767 but Boeing did not read the EADS document and data sent to Boeing by USAF. Thompson does not disclose how he knows this.

Thompson goes on to provide several examples of what he terms bias on the part of the USAF in favor of EADS, capping with his long-running call for the service to take into account the WTO ruling on Airbus subsidies. (Thompson, paid by Boeing, produced a report on this subject earlier this year.)

Thompson, effectively a Boeing surrogate on all matters KC-X, of course does not list examples of USAF bias toward Boeing as asserted by EADS and the clear record of such bias in the original tanker deal. But that’s neither here nor there.

In response to Thompson’s specific assertions in his commentary, EADS’ spokesman Guy Hicks wrote us this morning, “The moment we recognized that information was sent to us in error we properly secured it and reported to the Air Force.  It’s up to the Department of Defense to comment further.”

We pressed Hicks on the Thompson assertion that EADS read the document; we’re waiting for a response.

Says an industry official familiar with the competition, “Loren Thompson is a paid Boeing consultant—regardless of his protests to the contrary.  Only one team in the competition provides Lexington any funding and it’s not EADS.  He has clearly become the talking head for the Boeing Corporation.”

When we attended a press conference with EADS North America CEO Sean O’Keefe last week, O’Keefe said EADS was confident the USAF mistake was unintended and that procedures, long in place for things of this nature, were properly followed when the mistake was discovered. O’Keefe did not rule out a protest by EADS over the action but last week saw no reason to proceed with one.

Thompson’s Lexington Institute was the subject of a Harper’s magazine profile detailing his close ties to defense contractors. This article may be downloaded here: Harper’s Magazine/Thompson.

52 Comments on “Laying the groundwork for a Boeing appeal on KC-X

  1. Well, now the USAF knows that the looser of the KC-X contract, who ever that is, is going to protest the selection to the GAO. Both OEMs have a legal case against the USAF for reveiling propritory information.

    The issue is not if EADS read Boeing’s information, or Boeing read EADS’s, the issue is the USAF dug themselves into a hole so deep there can be no ‘winner’ in this round. The tax payers, USAF, Boeing, and EADS have all already lost.

  2. Unfortunately- GATT92/WTO specifically excluded ‘ military ‘ from any subsidy considerations. What was not covered was major conversion of commercial aircraft to military use. And, IF (big IF) I recall, several years ago, our congresscritters passed a few regs that essentially forbid the military to accomodate/consider subsidy issues.

    There is so much spin in the PR games, they could use it for a gas(eous) turbine. !

  3. So if EADS protests it showcases their implied lack of morality ?
    And Boeing could not protest because they have no information due to moral bliss?
    But Boeing would inevitably protest. No way around it.

    But how would Boeing know they need to erect some sharp stakes if they
    haven’t taken a peek into these papers?

    Finally,
    this would then and imho indicate that Boeing managed to “win” under the defanged new conditions.

  4. Okay, Scott, let’s say, for the sake of argument, you are right… Dr. Thompson himself is biased – and paid for – by Boeing. My question is, are any of his statements factually wrong? Thompson, for whatever reason, has taken sides… So have I. And clearly most people who follow this issue have, no?

    My question is, did they bend the rules for EADS? I don’t know, but clearly, it’s a valid question.

    • He’s off on his persistent call regarding WTO, for reasons we’ve explained ad nauseum. He hasn’t sourced his other allegations, so it’s unknown if he is correct of not.

      We will say this: EADS has not definitively denied the assertion about it reading the document. We’ve asked and we know other media has, too. The absence of a definitive denial leads us to believe this one assertion may well have merit.

    • whether Thompsons claims are true is not relevant. good journalism is balanced reporting. reporting only the positives of one side and the negatives of the other is called marketing.
      Of course aligning oneself with one side does put you in a position to attain extra information – I have little doubt his claims are factually correct. The problem is that I do not doubt Gen. Schwartz was telling the truth as well.
      No, I do not know what legal twist allows both statements to be true, but I am certain no one of Schwartz or Thompson stature could be called out on a simple lie.

  5. Pingback: Tweets that mention Laying the groundwork for a Boeing appeal on KC-X « Leeham News and Comment -- Topsy.com

  6. USAF, just select the Boeing KC-767NG and deal with the EADS protest to the GAO.

    Better yet, cancel the KC-X program altogether and reengine the KC-135E.

    leehamnel is right, EADS did look at the Boeing offer the USAF sent them.

    • And how would you possibly know/prove that? Or is it again a foul emanation of your legendary anti-EADS bias?

    • Oh yes, re-engine that dinosaur. Better to single source the whole mess to Boeing and let congress deal with explaining it.

  7. I’d be truly surprised if both OEM’s didnt have a good look on what they got sent if they thought they could do so without anyone ever being able to proof so. Which I think would be very hard to do.

    Anyways I thought the USAF will make the releveant info available to both parties so neither would have a disadvantage making this moot?

      • Was the package the dead tree variant or electronic media?

        With eMail there is no way to accertain delivery, access to content (where, when, by whom) or real source.

        No mechanism to achieve “broken seal” functionality.

  8. Well lookie here, EADS DID open the file… sure they say they didn’t “read” it….

    http://www.nytimes.com/2010/12/01/business/advertisingemail/01tanker.html

    “A spokesman for the Air Force, Col. Les A. Kodlick, said the agency took that unusual step after it realized that one firm, the European Aeronautics Defense and Space Company, had opened a computer file containing some of the data but that its rival, Boeing, had not.”

    Now I’m not too sure if O’Keefe knows what he is saying in the article, but “backing up” is creating a “copy” for safekeeping in case something happens to the original. So do they have a copy? Most likely not as I have seen confusion about computing/IT terms before.

    • More “vagueness alerts us” as reported by the NYT. A Boeing spokesman, taking a page from the Sean O’Keefe playbook:

      “The difference in how the companies handled the data, which emerged from interviews on Tuesday, has stoked Boeing’s concern about whether the process might be tainted. It hinted that it might file a formal protest.

      “Until we’re satisfied we have a complete picture, we’re keeping our options open for how we go forward,” said Daniel C. Beck, a Boeing spokesman.”

  9. Yes, according to the Seattle Times article the Air Force has now officially sent each company the other’s data. So whether they read it in the first place, they are certainly poring over it now.

  10. What I don’t understand here is why, instead of bitching about everything, can’t we accept that a mistake has been made and allow both manufacturers to continue on the assumption that everyone’s read all the files?

    • This is like FIFA.
      The deciding part of the game does not happen on green turf 😉

    • because that would be the reasonable thing to do, and therefore is not an option!

  11. When Boeing protested after the last round of the KC-X competition, didn’t the GAO provide them with EADS pricing information as part of the process? I remember reading something to that effect. I also remember reading Boeing claiming that the data was ‘Firewalled’ and did not go from the Legal dept. to Sales or Marketing. Can someone confirm this?

      • I know I’m a noob here, but could EADS use this somehow? Maybe to reinforce their claim that they haven’t read the data, or even if they have, it’s limited to a certain department, similar to Boeing’s ‘firewall between departments’ claim?

  12. Dominic Gates:

    Each disk contained an Air Force spreadsheet quantifying the effectiveness of one proposed tanker in a series of mission simulations.

    An Air Force computer model for various mission scenarios works out how many airplanes of the proposed type would be needed for each mission, where they would be based, how far they would have to fly, and how well they could meet the fuel demands of the combat aircraft.

    An Air Force analysis of the Boeing 767’s performance as a tanker is arguably even more valuable to EADS than a proprietary Boeing analysis. Likewise, the Air Force analysis of the A330 is likely s more valuable to Boeing than an EADS self-assessment.

    Loren Thompson’s posturing on behalf of Boeing indicates that they didn’t like the outcome of the IFARA analysis. It seems to me that they are grasping for straws. I sincerely doubt that the GAO would upheld a protest based on the equal sharing of USAF IFARA analysis of the two contenders.

    • Perhaps to you it seems like “posturing”, but I didn’t get that from Dr. Thompson’s analysis. Any comment on the fact that the Air Force modified the RFP because ” modified the request for proposals to eliminate secure communications requirements EADS could not meet”?

      I know that you and I are on opposite sides on this one, but I’m not cutting and pasting Airbus press releases.

      • Well, as far as I know, no changes has been issued by USAF to table 3-1 of the SRD since the RFP solicitation was issued on Feb. 24, 2010: 3.3 Information Management: 3.3.1 Worldwide operations: 3.3.1.1 The KC-X shall operate per table 3-1, in all civil and military airspaces at all times including in-flight transitions between classified and unclassified mission segment (Mandatory): Communications Functions [3.3.1.1-1 Ultra High Frequency (UHF) voice transceiver; 3.3.1.1-2 Very High Frequency (VHF) voice receiver; 3.3.1.1-3 High Frequency (HF) receiver; 3.3.1.1-4 Ultra High Frequency Satellite Communications (UHF SATCOM) transceiver; 3.3.1.1-5 Satellite telephone; 3.3.1.1-6 Crew Interphone System, Intercommunications Control System (ICS)].

        https://www.fbo.gov/index?s=opportunity&mode=form&tab=core&id=d6a6105de8722a69e0b1bffdaeda007c&_cview=0

        Perhaps the good doctor (in “government”!) has difficulties in understanding the essential nitty-gritty details in military-technical literature.

        When Loren Thompson launched his blog, “Early Warning”, last year he wrote in his inaugural post: is to be “long on facts — especially little known, useful facts — and short on opinions.”

        What is clear, though, is that the good doctor is short, very short on facts, but good at presenting “long” incorrect/distorted “facts” as the “truth”, and long, very long, on opinions. Interestingly, the good doctor doesn’t allow comments on his blog. I guess that’s because he believes he “knows” the defense industry facts “so well” that there’s no need for him to dialogue with his readers. However, a blog which is not accountable to the reading public is a propaganda site.

        but I’m not cutting and pasting Airbus press releases.

        Nice try Joanne, nice try!

  13. YEP That analysis is golden. However, there is still a possibility that IF they now say- NO changes to any parameters that affect the analyis in the BFO – then drive on . . .

  14. aravind :
    I know I’m a noob here, but could EADS use this somehow? Maybe to reinforce their claim that they haven’t read the data, or even if they have, it’s limited to a certain department, similar to Boeing’s ‘firewall between departments’ claim?

    If one reads the rest of the reports in the press including what the official response was by the AF- then AF after finding out what had happened, deliberately and specifically sent Both sides the others data, so both sides, WITH THE APPROVAL AND KNOWLEDGE AND DIRECTION(?) OF THE AF NOW HAVE THE DATA THAT WAS ON THOSE DISCS.

    seems to me that would make any claims ‘ we did not read ‘ sort of moot. At best, either BA or EADS or both could now say – yes , the AF now has given us the other sides data, NO we have decided NOT to read it or share it with our worker bees, and only the legal dept has it ….. yada yada for the greater benefit of all mankind and cuz we always take the high road . . .

    ( scuze me while I clean the upchuck off my screen ) ;-P

  15. The only way for Boeing and the US, to avoid any further political conflicts and delays with regard to the next tanker/transport program, is to finally have the guts to propose the BWB concept in this competition, a noncontroversial move Airbus simply cannot match.
    Reportedly, the BWB was and has been the favorite within the Air Force and many government circles during the 5 to 10 years, as the next generation tanker/transport, bomber, rocket launcher and several other applications.
    However, somewhere along the line the BWB concept did not make it to the starting point in the tanker transport competition.
    A move by Boeing, the Air Force and the US government along the above lines, could have an enormously positive influence on the future of US aviation for many decades to come, a strategic move, comparable in importance to the launch of the Boeing Model 367–80 prototype in 1952!

    • Yes, rather than spend ~100 billion in costs for an of-the-shelf modification, let’s add another ~20 billion to make it a clean sheet design. I’m sure anything designed in co-operation between government customers and commercial suppliers always works out for the best – just look at C-17, F-35, A-400m… Oh wait, all those programs are examples of rampant cost overruns and in determinant delays. I’m sure you can supply examples to the contrary…

      • How much money was sunk into the B-2 project? How much is a single B-2 airframe?

      • How much is an undetectable weapons platform worth. When a single B-2 can do a nescecary job a hundred B-52’s cannot, is that B-2 worth 100 times more than a single B-52, or more?

    • If USAF for whatever reasons wants a BWB tanker, then they could theoretically use a stripped down B2. How?

      Remove the four internal F118-110 engines, and put auxiliary tanks into the empty weapon bays and the space vacated by the engines. Attach 3 GTF/Leap-X engines on the rear of the aircraft, a boom underneath the mid/aft centre fuselage and two under-wing hose and drogue pods. The B2 already has an internal fuel capacity of 200,000 lbs, which means that a B2 derived tanker would be a very capable pure tanker (no cargo carrying capability).

      Making a BWB tanker from scratch would, in all likelihood, not lead to strategic advantage for the US aerospace industry. One of the fundamental challenges inherent in scaling a 767/A330 sized BWB, and other all-lifting body airframe designs to shorter range or smaller payload, is the high empty weight fraction, OEW over MTOW. In the Brequet range equation, the empty weight fraction, along with ML/D and specific fuel consumption, determine the aircraft fuel burn. This is the primary reason why most BWB studies have looked mainly at BWBs with a passenger carrying capacity equal to or greater than the A380-800, since the weight fraction of, for example an A330-200 sized BWB, using presently available technologies, would be higher in comparison to a conventional aircraft configuration.

      Finally, I’m not sure if future BWBs would be powered by conventional propulsion system. A future large BWB would have plenty of internal volume to accommodate large voluminous liquid hydrogen tanks. Conceivably, an intriguing propulsion technology scheme for a LH2 powered BWB could be a combination of internal combustion engines for take-off and landing and fuel cell powered large electric variable pitch propellers mounted on the aft upper fuselage providing enough thrust to maintain cruise altitude.

      If the US government should prematurely support development of a conventional powered BWB, used first as a freighter and tanker, having about the same payload capability as the A380, then it’s not unprobable that such a craft could relatively quickly be made uncompetitive by a LH2 powered BWB with a whiff of “disruptive technology” potential.

  16. From the good Doctors article, “So far in the current competition, the Air Force has:” …. “employed modeling scenarios that enable the EADS plane to use basing options not available to the Boeing plane”.

    Am I correct in assuming this means the Boeing offering does not have the range of the EADS offering?

    Oh goodness, how biased can one get?!

    He also brings up the WTO judgement, while totally ignoring the case that
    the EU won against the US and Boeing 10 years ago (the sums mentioned in such case having to date not been paid back by Boeing!!), as well as the preliminary ruling in the current case (US and Boeing: guilty). One can attempt to argue the magnitude of the sins (and some certainly will), but to me guilty is guilty. As some wise gent once said, Let him who has not sinned cast the first stone. In my opinion, no stones should be thrown by anybody here.
    It appears that the good doctor is casting himself as the saviour of the poor Pentagon. Hire me and do as I say, poor Pentagon, and I shall save thy wretched soul!

  17. As for the Harpers article, it seems that others are finally recognising the good doctor for what he truly is, a lobbyist in sheep’s, er analyst’s clothing!

    • “The good doctor” is not an oustanding feature of the landscape.
      He fits in perfectly with the rest of the forrest of Analyst,
      Think Tankers and TV evangelists.
      Even if their emanations sound reasonable their initial and primary
      objective is pushing thing towards the interests of their clientele.

      Without these people giving guidance the US would never have been
      into Iraq or Afghanistan.

      • Uwe, I’ve read some pretty amazing things from you, but this one is the best yet…

  18. Joanne :
    Uwe, I’ve read some pretty amazing things from you, but this one is the best yet…

    Happy to entertain you 😉

    On the other hand you would not be all that much
    surprised if you read a bit beyond lockstep national media.

    The finer details of the wikileaks documents could probably
    provide eye dilating “medication” as well.

    Though one must look beyond DisasterBrown and TeflonMerkel!

    • Notwithstanding your excellent command of the English language, I think your negative opinion of American foreign policy has little to no place in this discussion topic.

      You have no idea of what I read or don’t read. As we say in America, “try not to assume anything because…” You can fill in the rest.

      • Thanks for the compliment, Joanne.

        My point was that Mr Thompson and his institute is not exceptional, quite the
        contrary.
        Now my oppinion is that an informational ecoshere like the one staked out here ( the US ) needs to be functionally closed to outside, disenting and/or objective sources.
        One can achieve this by censorship (how last century 😉 or by carefully crafted lockstep arrangements with the national press and a rather curious setup of the national readership.

      • Joanne, sure this is off-topic, but I would guess it’s Uwe’s point that as far back as the late nineteen nineties, ultra right wing US think tanks had developed and published plans for an era of US world domination, sidelining the UN and attacking Iraq. At the time these people were not taken seriously. However, by 2003 they were calling the tune, and only a few dissenting voices were heard, among them, the late Senator Robert Bird:

        Reckless Administration May Reap Disastrous Consequences

        by US Senator Robert Byrd
        Senate Floor Speech
        Wednesday, February 12, 2003

        To contemplate war is to think about the most horrible of human experiences. On this February day, as this nation stands at the brink of battle, every American on some level must be contemplating the horrors of war.

        Yet, this Chamber is, for the most part, silent — ominously, dreadfully silent. There is no debate, no discussion, no attempt to lay out for the nation the pros and cons of this particular war. There is nothing.

        We stand passively mute in the United States Senate, paralyzed by our own uncertainty, seemingly stunned by the sheer turmoil of events. Only on the editorial pages of our newspapers is there much substantive discussion of the prudence or imprudence of engaging in this particular war.

        And this is no small conflagration we contemplate. This is no simple attempt to defang a villain. No. This coming battle, if it materializes, represents a turning point in U.S. foreign policy and possibly a turning point in the recent history of the world.

        This nation is about to embark upon the first test of a revolutionary doctrine applied in an extraordinary way at an unfortunate time. The doctrine of preemption — the idea that the United States or any other nation can legitimately attack a nation that is not imminently threatening but may be threatening in the future — is a radical new twist on the traditional idea of self defense. It appears to be in contravention of international law and the UN Charter. And it is being tested at a time of world-wide terrorism, making many countries around the globe wonder if they will soon be on our — or some other nation’s — hit list. High level Administration figures recently refused to take nuclear weapons off of the table when discussing a possible attack against Iraq. What could be more destabilizing and unwise than this type of uncertainty, particularly in a world where globalism has tied the vital economic and security interests of many nations so closely together? There are huge cracks emerging in our time-honored alliances, and U.S. intentions are suddenly subject to damaging worldwide speculation. Anti-Americanism based on mistrust, misinformation, suspicion, and alarming rhetoric from U.S. leaders is fracturing the once solid alliance against global terrorism which existed after September 11.

        [youtube=http://www.youtube.com/watch?v=Ts4FZAsjEhU&fs=1&hl=nb_NO]

      • However, by 2003 they were calling the tune, and only a few dissenting voices were heard, among them, the late Senator Robert Bird.

        That’s Robert Byrd; not “Bird”. 🙂

  19. OV-099 and Uve, we all know where you’re coming from. Thanks for making it crystal clear for the rest of those members who frequent this blog. I just love being proven correct… again.

    I can’t wait to read your stuff when the KC-767 is chosen. 🙂

    • Joanne,
      A door gives views into two different rooms.

      From my side the door has a label “Mc Carthy Era folks” on it. 😉

      Eisenhower was a very observant man. Unfortunately
      “in family” prophets don_t count much.

      • Uwe :
        Joanne,
        A door gives views into two different rooms.
        From my side the door has a label “Mc Carthy Era folks” on it.
        Eisenhower was a very observant man. Unfortunately
        “in family” prophets don_t count much.

        Uve, there ya go again assuming things again.
        Really? You should read what this side of the door says. 🙂

  20. OK, so what you’re saying is that you were a strong supporter of the war in Iraq and never had any doubt whatsoever that the Bush administration’s claims (WMDs; absurdity of putting up a connection between Saddam Hussein and Al Qaeda,; etc.) were not correct.

    BTW, I’d be surprised if the rest of those members who frequent this blog all supported the decision to invade Iraq.

  21. You know I’m re-reading what I said above and I don’t see where I commented on any war related issues. All I see is the both of you criticizing American foreign policy, which in my opinion, belongs somewhere else. Funny, I was having a similar discussion with visiting friends from Europe just the other evening. I was astonished just how different America and it’s European friends view the world around us. It explains, at least to me, why the KC-X debate is so divisive, and why it is so important that the Air Force consider the long term effects of it’s final decision. If they do, the final choice should be obvious to all. To me, it’s a national security issue. And whether or not those in the EADS camp want to admit it or not, that is their Achilles heal.

    I can say that my husband served in Iraq in 2006 and 2007, flying aerial refueling missions. My family and friends are proud of his service, as we are proud for all those who serve in distant conflicts. However the relevance of your opposition to America’s decision to remove Saddam Hussian’s regime and this topic escapes me. It doesn’t matter if they agree with you about Iraq or not. It is irrelevant. History will decide that. Seems to me you’re both enjoying a moment to voice your political diatribe.

    But again, both of you have driven way off topic.

    I’m surprised that it’s gone this far without comment from the site owner.

    • I honour your proudness stemming from that service.
      But notice that this kind of “mana” does not in reverse rub off
      on the wrongness of these wars.
      On relevance:
      The relevance can be found in that the same mechanism that brought you ( the US )
      a decission towards a war is pervasive in all political decissions nowadays.
      You get presented with carefully preselected facts from people that purport to be
      analysing but in essence giving you a brain wash.

      On viewpoints: I found it interesting that “real” expats ( in contrast to those
      transplanted with home environtment ( troops ) loose that US specific mindset rather fast.

  22. Uwe :
    I honour your proudness stemming from that service.
    But notice that this kind of “mana” does not in reverse rub off
    on the wrongness of these wars.
    On relevance:
    The relevance can be found in that the same mechanism that brought you ( the US )
    a decission towards a war is pervasive in all political decissions nowadays.
    You get presented with carefully preselected facts from people that purport to be
    analysing but in essence giving you a brain wash.
    On viewpoints: I found it interesting that “real” expats ( in contrast to those
    transplanted with home environtment ( troops ) loose that US specific mindset rather fast.

    Uwe :
    I honour your proudness stemming from that service.
    But notice that this kind of “mana” does not in reverse rub off
    on the wrongness of these wars.
    On relevance:
    The relevance can be found in that the same mechanism that brought you ( the US )
    a decission towards a war is pervasive in all political decissions nowadays.
    You get presented with carefully preselected facts from people that purport to be
    analysing but in essence giving you a brain wash.
    On viewpoints: I found it interesting that “real” expats ( in contrast to those
    transplanted with home environtment ( troops ) loose that US specific mindset rather fast.

    Wow! Now those who disagree with you are “brainwashed”. Forgive me Uve, but the arrogance of that statement is astonishing. But sadly, not surprising.

  23. OK, Everyone, let’s get back to the topic at hand: tankers. This isn’t about American vs European foreign policy, it’s about which tanker is the best, it’s about the procedures surrounding the KC-X competition. WE are American and proud of it and yes, we have issues with our foreign policy. WE also love Europe, having traveled there dozens of times over decades (showing our age here) and yes, we have issues with Europe policy and especially how certain countries interact with the US. But this ain’t Rush Limbaugh and it ain’t Keith Olberman, so get back on topic.

  24. I thought it also had something to do with Loren Thompson’s credibility (re:objectivity) as an analyist.

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