Update, 10:30 PST: Loren Thompson of the Lexington Institute, who has come in for our share of criticism for his unabashed bashing of Airbus and subsidies as it relates to the KC-X competition, has this very good essay on why Boeing won.
Here is a link to Richard Aboulafia’s commentary.
Original Post:
We are hearing from a variety of sources a growing concern that the Air Force hasn’t been as forthcoming as it should be in its debriefs with EADS.
But Reuters moved a story a short time ago that EADS won’t protest.
The Mobile Press-Register, in a rare front-page editorial, and the Alabama Congressional delegation are complaining that the Air Force has been as forthcoming as they believe it should about why Boeing won the tanker contract. Publicly, the Department of Defense said Boeing was the “clear” winner in what had become a price shoot out. DOD, EADS and Boeing will not reveal the pricing.
One of our readers, with the screen name OV-099, provided a comment on our Dewey Defeats Truman post calculating the possible prices on the KC-45 and the KC-767.
OV-099 has been a long-time poster and when the occasion arises, does in-depth analyses on financial terms. We’ve cross-checked his work with others and found his numbers-crunching to be pretty spot-on.
With that in mind, we asked OV-099 to take a final look at his original posting with the thought of elevating it to a primary post. He has slightly revised his numbers. What follows is his analysis of how much EADS and Boeing priced their KC-45 and KC-767 in the bids to the USAF. His analysis is below the jump.
Update, 1-:30 am: OV-099 has further refined his analysis; the update is below.
Our Odds and Ends this week:
Note: here is the link to the tanker transcript.
Podcast: Richard Aboulafia talks to Addison Schonland.
Richard Aboulafia of the Teal Group said it best: the upset Boeing win over EADS in the KC-X tanker contest is the “Dewey Defeats Truman” moment of this contest.
For those who don’t know this reference, see here.
Aboulafia predicted EADS would win. So did Michel Merluzeau of G2 Solutions in Kirkland (WA). And Loren Thompson, a paid Boeing consultant. We did, too. So did Daniel Tsang of Aspire Aviation and even the Boeing shills in Europe did.
Boeing officials thought they were going to lose and so did its supporters in Congress.
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.
It now appears the USAF will announce the tanker contract Thursday, Feb. 24, at 5pm EST. Expectations are that EADS will be awarded the contract, but there have been so many twists and turns that we’re not predicting the outcome.
The greater question will be, Will there be a protest? As we reported Monday, EADS says it won’t protest if it loses provided there is nothing egregious in the selection process. Boeing has clearly been laying the groundwork for a protest, but neither is it certain Boeing will do so if it loses.
Here is the timeline of what happens next:
With the expectation that the USAF is going to announce its tanker award this week, we’re going to forego our Odds and Ends kick-off and deal with the tanker.
We’re going to try and synopsize many of the issues that are “out there” in cyber-land, to try and make some sense out of what sometimes seems to be a senseless process.
In no particular order, here we go:
As Washington (DC) buzzes with the prospect that the Department of Defense will, at long last, announce its award for the KC-X contract before the end of this month, EADS held a press briefing February 16 to lay out its views one last time that its airplane is the best choice for the job.
Boeing made calls to editorial boards last week to make its case.
The process has dragged on so long that we couldn’t help but think of the photo below, purported to be the first air-to-air refueling.
Source: LaGuardia Airport historical photo.
Two top Defense Department officials today (Feb. 16) told a conference sponsored by Aviation Week magazine that the contract award for the KC-X could be made by the end of the month.
The buzz in Washington is that it will be after the stock market closed on Friday, Feb. 25.
The statements by the DOD officials are summed up nicely in this Defense News article.
At the same Aviation Week conference, the Pentagon’s top buyer, Ashton Carter, repeated remarks he made a week earlier at the Cowen & Co. aerospace and defense investors’ conference February 9. At the Cowen event, the headlines to come out of it were remarks made by Boeing CEO Jim McNerney about the prospect of proceeding with an all-new replacement for the 737.
The headline that did not come out of it was from a speech presented by the Pentagon’s top buyer, Ashton Carter. Elements of his speech did, indeed, make news. However, buried in his speech as the last topic were his comments about globalization and procuring key defense systems from non-US companies.
Is this laying the groundwork for selecting the EADS North America KC-45 tanker in the KC-X competition? DOD Buzz picked up on this, too, but well down its story.
Perhaps this is too much “Kremlinology” but carefully read his remarks:
Update, Feb. 15: at the request of the magazine, we have delinked the article.
Here is a synopsis; the magazine reports:
Original Post:
Australian Aviation has a five page profile on the delays to the RAAF KC-30A, including last December’s boom failure.
The PDF may be downloaded here: RAAF KC-30A Delays