It’s believed the Final Request for Proposals on Round Three of the KC-X tanker program will be forthcoming this week–it was due Friday, but another meeting with Boeing, Northrop, the USAF and DOD was held Saturday.
In the meantime, Innovation Analysis Group/AirInsight has produced another podcast on the subject. This one features Amy Butler, the senior Pentagon correspondent for Aviation Week magazine, Addison Schonland and Scott Hamilton. Butler gives her on-the-spot observations about the prospect Boeing could no-bid this competition; the potential for a Boeing offering with a KC-777 or a “KC-764” (767-400);commentary about the Draft RFP, and more. This podcast is 24 minutes.
Flight International reports that Boeing might offer the 767-400, a plane roughly the same size at the KC-30, for the aerial tanker. This would delay the process beyond year-end and into a new Congress.
The Seattle Post Intelligencer has this column of interest, called “The tanker in mathematical terms.”
Boeing is meeting with the Air Force Saturday to further discuss the Draft RFP, as detailed in this Bloomberg story. This means-obviously-the Final RFP won’t be out today. The new FRFP timeline goal is next week, but we (and participants) think that’s still ambitious.
Northrop’s CEO Ron Sugar says Boeing “got what it wanted” out of the GAO protest, but is unhappy anyway. Here’s this story.
Richard Aboulafia has this comment on “Back to Square One.”
During the competition, Boeing often suggested the Northrop KC-30 was “gold plated.” That is, yes, the plane carried more fuel, more troops and more cargo than the KC-767, but everything above the requirements set forth by the Air Force was mission creep, or gold plating. Therefore, we could not help but think of Boeing’s position when we read this story. We think is aptly sums up Boeing’s view about mission creep.
James Wallace of The Seattle Post Intelligencer has this excellent piece about the prospects of Boeing offering a KC-777 or a “KC-764”.
Update, 130 PM PDT: Innovation Analysis Group has this 7 minute podcast with Dan Beck, spokesman for Boeing’s tanker program. (Longtime spokesman Bill Barksdale has moved on to other duties within Boeing.)
Bloomberg just moved this story, reporting the Italy will fine Boeing for its late KC-767 tanker, following penalties assessed by Japan.
Update, 1145 AM PDT: We’ve been on the phone with reporters this morning discussing the tanker competition and what Boeing might do–the latter in the wake of the Aviation Week story that Boeing is considering adopting a no-bid position following the revised RFP that will give extra credit for extra fuel off-loading capability. We thought we’d recap our thoughts.
Update, 345 PM PDT: The Financial Times is reporting that Boeing is sticking in the competition, at least for now, after its meeting with the USAF. The FT reports that Boeing is continuing dialog with the Air Force to refine the Draft RFP for a final RFP. Here is the story, though a subscription may be required.
Reuters reports that Boeing remains “discouraged,” however, in this story, citing defense analyst Loren Thompson.
Update, 800PM PDT: Business Week has this piece about Boeing staying in the competition, probably plans to ask the USAF to extend the timetable and some discussion about a “KC-777.”
There are numerous reports today that the US Trade Representative may look at the proposed launch aid for the Bombardier CSeries airplane. This one does a good recap.
The CSeries is proposed to carry 110-149 passengers, which directly encroaches on the Boeing 737-600/700 and Airbus A318/A319 series. The USTR doesn’t care about the potential impact on Airbus, of course, but since the USTR filed a complaint against Airbus and the EU about launch aid to Airbus (the case is still pending), it’s only logical that the USTR and Boeing complain about launch aid to the CSeries.
But does Boeing truly care?
There were strong hints at the Farnborough Air Show by Boeing Commercial President Scott Carson that Boeing just might cede the market of 150-seats or below, though Carson declined to confirm to us that that’s specifically what he meant.
Aviation Week reports that Boeing may elect not to re-bid on the KC-X program. The story is here.
Update: 0840AM PDT: Boeing told us the Aviation Week piece is “news to us.” Boeing (and Northrop) meet with the USAF Tuesday (Aug. 12) to review the Draft RFP. If Boeing has anything to say publicly, it won’t be until Wednesday, we’re told.
Update, 945AM PDT: The Pentagon has issued what amounts to a gag order on any statement by the USAF or DOD on the tanker competition. See the report here.
Airbus took a comfortable lead in the orders race year-to-date through July 31 following the Farnborough Air Show, in which is announced a combination of new orders and inked a 100 airplane deal with Dubai Aerospace Enterprises that was announced at the Dubai Air show last November. DAE’s 100-plane order with Boeing, also announced at the Dubai Air Show, was completed in December and was posted to the 2007 order book.
Although 787 sales have stalled, there is a rumor of a pending new order for double-digit airplanes. Airbus in August announced a fourth customer for the A350-1000 that should be inked by year end, if not in August.
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There has been some time to digest the Pentagon’s announcement for the re-compete for the aerial tanker program. Predictably, Boeing’s supporters are unhappy. Anything short of a tailor-made RFP guaranteeing a Boeing award won’t make them happy, as their efforts to craft legislation in Congress demonstrates.
Here are a couple of stories that capture the flavor:
Having incorrectly called the competition once–we thought Boeing would win and were stunned when Northrop did–we’re going out on a limb and predict Northrop is the favorite this round. (In this we are not alone, but we weren’t last time, either.) But we have a somewhat different view than the hand-wringers over the revised RFP.
The original RFP contained a delivery timeline sought by the Air Force that was not challenged by Boeing in its protest and which the GAO didn’t address. And this timeline isn’t changed in the new Draft RFP, either. And that is the Air Force wants the “prototypes” (our word) of the KC-45 delivered in 2009.
Northrop already has two KC-30 platforms flying and two more on the way. Granted, these must be converted into tanker configuration. But Boeing doesn’t have a flyable airplane nor is it likely to be able to have the KC-767AT prototype ready next year.
This is because the “AT” is a combination of elements from the 767-200ER, the 767-300ER, the 767-400 and the 777. Deemed a “minor modification” by Boeing–and the “Frankentanker” by Northrop–the process of integrating the parts and producing the airplane most likely will take longer than 2009 once Boeing received a contract, if it did.
Boeing’s track record with the KC-767s for Japan and Italy doesn’t inspire confidence, and these are straight-forward conversions of the 767-200ER.
The delivery timeline outlined in the original RFP also argues now, as it did then, against Boeing offering a tanker based on the 777. This production line is already at capacity of seven a month and with a backlog of 358 at June 30 (the latest data available), that’s slightly more than four years before Boeing could deliver a prototype KC-777, even if 100% of the research and development were done and ready to go into production–which it probably is not.
Let’s remember that the re-compete is about eight points identified by the GAO, but there are other criteria involved. The desired delivery schedule is the main reason we think Northrop has the edge; Northrop has a plane ready to go now; Boeing’s airplane is in the computer.
The Pentagon today re-issued the Request for Proposal for the aerial tanker competition today.
As the press conference begins, here is a running synopsis:
End of conference.
Our immediate take:
Both sides got something in the rebid:
It didn’t take long for Boeing’s advocates to look for bias, according to this CBS News report. They’ve been advocating including the 40 year life cycle but excluding the extra credit, a position we find just plain stupid. If you alter the RFP to allow one, then you need to allow the other.
The question is whether Boeing will protest the changes; officials said at Farnborough that they might because they felt any changes to the RFP should reset the process from scratch.
Here is the Draft RFP, Part 1. 27 pages.
Here is the Draft RFP Part 2. 96 pages.
Here is Northrop’s statement. (No response yet from Boeing.)
Here is a Seattle Times report, quoting a spokesman for US Rep. Norm Dicks (D-Boeing) already whining about the new RFP. No mention of the 40 year life cycle element by Dicks’ office, which he advocated.
Update, 4:10PM PDT: Washington State’s other Boeing advocates are quoted in this article and this one, all complaining about the extra credit for extra fueling capabilities. The hypocrisy is palpable. Some of them are behind legislation in the US House that would all but require an award to Boeing rather than the “fair” competition they advocate, and all seemed to favor changing the RFP to a 40-year life cycle on the assumption that this will guarantee a win for Boeing. Yet they object to the extra credit change. These politicians, and those from Kansas who rival Washington, aren’t remotely interested in competition and all their rhetoric to the contrary is political pablum.
This just in from Boeing:
Boeing has received the amended Request for Proposals (RFP) for the KC-X tanker competition. Given the very narrow window for commenting on this draft, our team is focused on identifying and understanding any changes that may have been made to the original requirements and evaluation criteria. We also need to see how the document addresses the strong concerns the Government Accountability Office identified in sustaining our protest.
Despite the fact that the first competition appropriately addressed the aircraft’s intended mission, until we receive the final RFP it is too early to offer any details about Boeing’s path forward.
Boeing remains committed to providing the most capable tanker to the warfighter and the best value for the American taxpayer.
No comment on whether Boeing will protest the DRFP.
Steve Trimble of Flight Global has a series of short items in his blog. Rather than linking each one, here’s the link to his home page–select the individual tanker items as you will.