Speaking of USAF procurements…

Steve Trimble of Flight International has this bizarre piece. It’s about the Joint Cargo Aircraft, the C27J, which is being acquired by the Army and the US Air Force. It turns out the Army is paying half that of the Air Force.

As an aside, this is an Italian airplane made by Alenia (the same company involved in the Boeing 787 program). This European company partnered with a US company to make the big to the Pentagon. This sounds familiar, doesn’t it?

The US company partner is–Boeing.

Boeing’s IDS struggles

This story by Dominic Gates of The Seattle Times paints a grim picture for Boeing’s Integrated Defense Systems. He points out that IDS “can’t boast even a single prime contract to supply the US military’s next generation of fighters, bombers, tankers and transport planes.”

Here’s an article from Aviation Week discussing China’s plans to build a plane that directly targets the Boeing 737 and Airbus A320 lines and another in The Australian about the engine competition between GE and Rolls-Royce that’s developed concurrently with the rivalry between Airbus and Boeing.

$800m-$1bn 787 penalty cost predicted

This 7 minute video from Morningstar predicts that Boeing will face a penalty to airlines of $800 million to $1 billion for delays in the 787 program. The prediction is about 4 minutes into the video.

Boeing’s supplemental protest filing

Here is the Boeing GAO Supplmental Filing of Boeing’s tanker protest.

Update: 1000AM PDT: Boeing just wrapped up a conference call discussing the supplemental filing. The call largely went over the filing, and the Q&A was largely expansive on the filing. Read the filing and you’ll get the gist of the call.

A couple of points of interest:

  • We asked how Boeing could be complaining that the USAF didn’t give proper evaluation to delivery of the Japanese KC-767s because the first was delivered nine days before the award was announced and the second was delivered five days after the announcement. Mark McGraw, vice president of the tanker program, acknowledged that Boeing had been marked down (scored “marginal”) on program management but that the USAF knew the tankers were being delivered and added back scoring–but not adequately, in Boeing’s view.
  • Boeing, interestingly, redacted (on Page 8 of the filing) the Air Force fuel burn analysis between the KC-30 and the KC-767 but left in the analysis of a Boeing-funded study that concluded the KC-30 fuel burn was 24% greater than the KC-767. Northrop previously told us that the fuel burn difference in their analysis was about 6%. As the conference call was in progress, we emailed Northrop to ask about the USAF analysis, and NGC tells us the USAF analysis agreed with NGC’s 6% number. On this point, Boeing seems to be playing games by selectively retaining and redacting data.
  • In response to a question, McGraw dismissed NGC’s revised jobs number of 48,000–issued shortly after the award was announced–that would be created for the KC-30 program. McGraw believes that NGC’s original jobs number of 24,000 is closer to being correct. We previously had a full discussion of the new jobs number on our Corporate website here.
  • McGraw remains mystified over the “motives” for the USAF to select the KC-30. He hopes the GAO will figure this out in its review of the protest.

Boeing expects to have a transcript of the call available later, as well as an audio archive. We’ve asked for the transcript when available and will post it here. The audio archive will be posted at Boeing’s Tanker Blog.

We’ll link select articles as they pop up on the Internet.

Update, April 4, 0730AM PDT: A few articles of interest:

Jed Babbin, former deputy undersecretary of defense for Bush 41, writes another well-reasoned piece on the tanker; he’s a pro-Boeing advocate and he, like his previous writing we linked, does a good job of avoiding histrionics.

Aviation Week’s Amy Butler does another in a series of fine reporting. Her piece is here.

George Talbot, reporting from Boeing’s “enemy territory,” The Mobile (AL) Press-Register, does his usual good reporting with this piece.

Meanwhile, in the Internet website wars, Northrop has launched a new site, America’s New Tanker. This serves as another effort by NGC to rebut Boeing’s PR campaign.

Update 0945AM PDT: Here’s another opinion piece, this one in support of the KC-30, from DefenseTech.org.

Breaking News: GAO dumps NGC, USAF; Boeing narrows protest

From The Wall Street Journal:

By AUGUST COLE
April 2, 2008 6:06 p.m.

The Government Accountability Office denied motions filed by Northrop Grumman Corp. and the Air Force to dismiss parts of Boeing Co. protest of a $40 billion contract to provide aerial refueling jets.

Both companies characterized the developments as victories.

“Boeing’s decision to abandon the public relations rhetoric contained in its original protest filings is in keeping with our motion,” said Northrop spokesman Randy Belote in a statement. Northrop also said that it was encouraged that Boeing “streamlined” its approach.

“This decision is consistent with our view that full consideration of all appeal grounds is warranted,” Boeing said in a statement, calling it a “significant development” in the company’s appeal.

The full article is here.

Update, 400PM: We’ve obtained the redacted copy of the USAF Motion to Dismiss Boeing’s protest (which the GAO has now denied–the Motion to Dismiss, that is). The 49 page PDF provides extremely interesting reading in the dynamics between Boeing and the Air Force.

Update 740PM: Boeing says it did not narrow its protest, and claims this is only Northrop’s “spin.” Here’s a Reuters story.

Derivatives not always good for military

Steve Trimble at Flight International has an interesting piece about commercial derivatives for the military. The theory is that this saves money. Tain’t necessarily so, says Steve. You can find the story here.

Air Force says Boeing protest too late

Reuters just posted this story, citing USAF filings with the GAO.

Leeham website update

Our Corporate Website has been updated with in-depth commentary. This week we write about eco-aviation and of technology transfer to Japan and the Boeing 787.

We quickly received a note from Lynn Lunsford of The Wall Street Journal  on the latter subject. We cited a Forbes story in our comment–Lynn points out Forbes picked up the item from his piece on March 27. The relevant except is below:

In what could prove to be an important alliance, Mitsubishi Heavy has persuaded Boeing to participate in the program by working with it to adapt elements of the same carbon-fiber composite technology being used in Boeing‘s new 787 Dreamliner. Mitsubishi Heavy and two other Japanese companies are major financial partners with Boeing on the bigger jet, so they already have experience with these materials. By incorporating composite materials that don’t corrode or fatigue with age, Japanese officials hope to differentiate their product from those of competitors that rely largely on aluminum.

Mitsubishi Heavy and Japanese government officials had hoped that Boeing would sign on as a significant investor in the project, but the Chicago aerospace company declined, saying it needed to stay focused on getting its delayed Dreamliner out of the door. “We will participate in a limited way. Discussions are under way to determine exactly what will be of most value to the program,” said a Boeing executive familiar with the talks.

More on tanker

Here are some new developments on the continuing USAF tanker saga:

  • Human Events publishes a rebuttal to a previous piece supporting Boeing. This one supports Northrop.
  • Opponents to US Sen. John McCain continue to make hay over allegations that he is responsible for Boeing losing the contract to Northrop Grumman. We continue to find this to be not only inaccurate but unfair to McCain. Boeing lost the first contract in 2004 due to its own illegal actions (paying a fine in the hundreds of millions of dollars in the process) and it lost the second round on the USAF’s own evaluation. Boeing’s protest of this decision will determine whether the USAF process was faulty. McCain didn’t select the airplane. Even an editorial board in Kansas, where the KC-767 would be finished out in military configuration, believes McCain is getting a bad rap even as it criticizes the decision and McCain for EADS connections.
  • Boeing hints to us that more of something will be forthcoming on the tanker issue in the coming weeks.
  • Some aerospace analysts believe Boeing has a pretty good chance of winning the protest because the grounds cited–changing evaluation criteria during the process–are similar to the successful protests in the CSAR-X helicopter award. Boeing won this contract only to see the GAO uphold two protests from losers Lockheed and Sikorsky. The USAF is redoing this competition. Interestingly, a similar protest was filed and won by Alabama Aircraft over a contract award to Boeing for KC-135 maintenance. Alabama Aircraft cited changed criteria and the GAO agreed. But in this case the USAF said “stuff it” to the GAO and is going forward with the Boeing contract.
  • Critics of the KC-30 tanker award suggest that France (Airbus) will withhold vital parts for the tanker if a political policy dispute emerges with the US. Charles Horner (a retired USAF general and a consultant to Northrop) makes in interesting point in an op-ed in the National Review. He writes, “why does Boeing not draw criticism for the fact that the engines on its KC-135R refueling tanker are made by a manufacturer half-owned by the French company, Snecma? Never once in our nation’s sometimes difficult relationship with the French has a single engine part been withheld or even delayed because of the disagreements over foreign policy between our countries. If it has never happened before, why would it happen now, as some suggest that it will?” Good point. The full article may be found here.

    Boeing acquires piece of troubled SC company

    Boeing today (March 28) acquired the Vought share of Global Aeronautica, giving the 787 manufacturer a 50% stake in the company.

    The plant in Charleston (SC) has been one of the key trouble spots in the 787 program. Flightblogger’s Jon Ostrower reported the probable move way back in December.

    This is a good move for Boeing in straightening out the program. Although it’s unclear today just how much of the 787 production problems continue to originate at Charleston, the 787 production system still is under major stress. The world waits for Boeing’s program update–the internal assessment continues–and the date for the program update, thought by some to be next week, by some the following week, remains unscheduled and unconfirmed.

    Is the buyout related to the recent news about redesign of the center wing box? The answer, in our opinion, is “no.” Charleston isn’t responsible for the wing box; the Japanese are. Furthermore, we’re told from inside Boeing that the wing box issue was old news (at least one Wall Street analyst says the same thing) and that the redesign occurred quite some time ago for the first six airplanes (or seven, depending on who’s talking).

    What made it news is that Boeing didn’t tell anyone and with its in-the-bunker mentality since things went south on the production schedule (a phrase used both inside and outside of Boeing), not being forthcoming, the statement by ILFC CEO Steven Udvar-Hazy that Boeing had to redesign the wing box became news for a news-hungry media.

    Even within Boeing, there is complaint that Boeing isn’t forthcoming and therefore winds up de facto letting others reveal problems.

    But we digress. Today’s news is tangible evidence that Boeing is taking back control of its own destiny. It’s a major step, it’s not the first and it won’t be the last. But for all interested parties, it’s certainly the right step.