Don’t protest, EADS: it’s time to move on

In a previous post, we opined that whoever lost the KC-X contract should accept the decision and let the Air Force move forward with the award without a protest.

We reiterate this view now.

Throughout the competition, EADS praised the USAF for its fair and open process, and its integrity, and when the Air Force inadvertently passed on company information to Boeing and EADS that belonged to each other, EADS praised the USAF for handling the mistake properly.

Prior to the decision, EADS reiterated these views and said that unless it saw something “egregious,” it would not protest.

Frankly, it’s time to move forward regardless. EADS often tried to take the high road by saying it was time to do what was best for the warfighter. What’s best is to get going, after 10 years of messing around on this contract.

EADS fought the good fight. There will be other contracts to compete for.

Let’s move on.

23 Comments on “Don’t protest, EADS: it’s time to move on

    • I seriously doubt EADS will protest. No doubt, they’re very disenchanted with the fiasco that was the Pentagon’s bidding procedure.

  1. The USAF has chosen the mediocrity in the name of protectionism, it’s not the first time and this is not the last. Hope for the USAF that they will not be delivered five years late…

    • Geeee….how are those on time deliveries of the A400M going for all of those countries across the pond?

      Anyone who talks about planes being late have the largest set of horse blinders on ever made!!

  2. The only bit I do not get is how an aircraft 19 million more expensive than last round won for being the lower bidder ?

    That is 350 million more expensive for the first 18.

    • What was inflation like in that timeframe?
      And military procurement inflation tends to be higher anyway 😉

      then: did any requirements change?
      i.e. different product for a different price?

  3. EADS, like any other company, is obligated to ensure a fair fight due to the money and time they put into the effort. If Boeing and the DoD played by the rules they have nothing to worry about.

  4. Agree with you 100%! Time to put an end to this process. And my home town is Mobile! The enthusiasm for the project was phenomenal locally. Unfortunately, I feel Alabama Senators Shelby and Sessions could have done more to counter the claims and charges made by Washington state representatives in Congress. Boeing’s political clout won out in the end. Pure and simple.

  5. Let’s hope EADS does protest. In the interest of fair and open competition, the loser should voice it’s concerns and the process should be reviewed by an independent agency.
    Of course it is possible that EADS has no concerns and cedes the fact that Boeing offered an >10% cheaper (by list price) option for more than 1% under EADS’s best price.
    If they do (don’t protest), then praise should go to the USAF for running this competition so well.

    the remaining question is what this will do to EADS’s US FAL plans.

  6. The DOD hates protests and can make life miserable for a Contractor with a rep for protests, aggressive change orders, and being unprofessional. Valid protests, claims, and change orders are part of business. The government knows they screw up and valid claims are worked thru.

    If this contract is as I understand it, with the minimum requirements met it is bid price + fuel usage + milcon costs determines the low bid, it is pretty cut and dried provided that a clear objective methodology of evaluation presented in the RFP and adhered to in the review.

    EADS just entered the biggest scale of competition with the DOD directly (vs with a NG or Lockmart), protesting now really needs to be on a very strong footing

  7. Dear Scott,
    Can you confirm that this is a fixed-price contract ? I just remember that Boeing was protesting against that.
    By the way, congratulations for your very objective and prof essional coverage of this obfuscated competition.

    • It was a fixed price contract. Boeing didn’t “protest” in the GAO sense of the term but it was concerned about it, yes.

  8. Now let’s see how quickly Boeing can deliver the first squadron of “Combat Ready” tankers at the agreed specification & cost.

  9. This is a fixed price contract, for the KC-46A. Boeing and other defense contractors don’t like it but that is the reality of today’s economy. The A-40 cntracts were originally a fixed price contract, too. But when EADS realized it wasloosing money on it, they through a fit and demanded more money, or they would tear up the contract and put assembly workers out of work. The various EU customers caved in after EADS dictated the new terms and the number of cancelations they would allow.

    EADS still has the option of building their own new FAL in the US. But, they won’t do that.

    EADS can, and should protest if the find something “egregious” the USAF did during the entire process that gave an extra advantages to Boeing at their expense. However, they cannot protest against the SRD/RFP, which set the standards and tones for this compitition. But, based on the public information I have seen over the last year, EADS just does not have a case here.

    Then they would have to weigh the possibility of having a successful protest filed with the GAO. Only about one out of a hundred GAO filed protests are upheld. Remember, USAE already filed a few GAO protests over what they preceived as unfair treatment of them, by the USAF, and their original bid being a few minutes late back on 9 July 2010, and they lost. They claimed the USAF Security Force guarding the gates at WPAFB delayed their courier and made their bid late.

  10. I agree with the majority here that EADS needs to move on. EADS can reasonably claim, I think, that they weren’t well treated overall by the selection process. But given where things are at, they have nothing to gain by extending the misery further.

    I would make the observation, though, that if Americans (or indeed anyone else) want an affordable and effective defense capability, they need to accept that companies like EADS will win contracts like the gas tanker on their own merits. They’re not going to continually bid on contracts just to keep their competition straight.

    • European-based defense contractors have won a number of high-profile competitions in recent years. AgustaWestland was selected over Sikorsky in the presidential helicopter contest, Eurocopter is supplying the army with EC-145s for its Light Utility Helicopter program. Alenia bui;ds the C-27J. Rolls-Royce supplies engines for the C-130J. On and on, and that’s just aircraft. And I can’t think of any European nation that buys all of its defense products without concern for local industry. Everyone does it to an extent.

      • Sure, rpx, the DoD have bought into the concept of competition, at least to some extent. Which is why they were prepared to award the second round and the first competition to EADS/Northrup.

        The sentiment isn’t widely held by Americans however. This view is typical: Why would we be considering the European consortium that has driven the U.S. out of its dominant position as the world’s leading aircraft manufacturer? Our share of world manufacturing continues to shrink. Fly Boeing. Buy Boeing. Hang on to one of our few proud global manufacturing companies…

        US taxpayers will probably pay Boeing about half what they would done simply because EADS took part in the contest. But you won’t get real competition – and cost-effective defense capability – unless all competitors have an equal chance of winning. Which means dispensing with the sort of attitude I noted above.

        The tanker award was a mess from which the DoD looks to have extracted itself as well as could be expected in the circumstances. But it’s not a template for future success.

  11. airbus has paid its entry ticket

    to the u.s. defense market

    more lakotas please

  12. _ Sigh, I’m so relieved ! I was already fearing, Airbus would manage to win that contest and would have to deliver 179 aircraft to a nearly bankrupt US government.
    Congratulations to the great winner Boeing ! I hope you will never rue the day you won this competition …

  13. FF :Sure, rpx, the DoD have bought into the concept of competition, at least to some extent. Which is why they were prepared to award the second round and the first competition to EADS/Northrup.
    The sentiment isn’t widely held by Americans however. This view is typical: Why would we be considering the European consortium that has driven the U.S. out of its dominant position as the world’s leading aircraft manufacturer? Our share of world manufacturing continues to shrink. Fly Boeing. Buy Boeing. Hang on to one of our few proud global manufacturing companies…
    US taxpayers will probably pay Boeing about half what they would done simply because EADS took part in the contest. But you won’t get real competition – and cost-effective defense capability – unless all competitors have an equal chance of winning. Which means dispensing with the sort of attitude I noted above.
    The tanker award was a mess from which the DoD looks to have extracted itself as well as could be expected in the circumstances. But it’s not a template for future success.

    Boeing was lowering the price of the B-767, whether they won or not. Their “lean production” line generates a savings of some 20%, allowing Boeing to lower thecosts of the KC-46.

  14. EADS were never gonna win, ever…Another appeal would just be a waste of money which might lead to another bidding process that Boeing would surely end up winning..again.

  15. Everybody is talking about this 20% savings due to the lean manufacturing line, but I very much doubt this is 20% of the airframe cost. At much they save 20% of the assembly cost. But I have no doubt that they have had to pull down their pants to win this contest, being fixed price we will see if they will ever make a profit out of it.

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