US Air Force Tanker replacement....

[Trev Clark]

'You guys will have to keep on re-submitting until we get a decent all-american bid we can accept......'
http://uk.news.yahoo.com/afp/20080709/t ... c5291.html

[Chris Trott]

Trev,

First, please don't put words in anyones mouth with that off-handed remark. The media is the media and politicians are politicians, but the underlying problem isn't whether it was a US or non-US manufacturer chosen. If that was the problem, then the US-101 wouldn't have won the VH-X competition, and Eurocopter wouldn't be producing EC-145s for the US Army as part of the Light Utility Helicopter program at this very moment. Neither of these acquisitions had anything more than a cursory "complaining" about the choice, but in both cases, the choices were consistent with the requirements issued.

Try reading the GAO's finding on the matter before making your proclamations. It had nothing to do with where the company who "won" was based. It had everything to do with the fact that the Air Force broke multiple rules in choosing NG/EADS, most egregiously the first part of the requirement, that the replacement be of a similar size of the KC-135. The A330 is by no means "similar" in size to the KC-135 and by the Air Force's own rules, NG/EADS was to be penalized for offering an aircraft that so badly exceeded the requirements in several areas (size, capacity, and cost), and then used faulty data for other areas and flat-out lied on its findings about other areas. This is the second acquisition in a row where the USAF's proven it's unable to properly bid a contract. The first was the CSAR-X program that Boeing won with their HH-47. It originally had a requirement that the aircraft be of similar size to the HH-60 Pavehawk it is replacing. Boeing's HH-47 is nearly double the size of the Pavehawk, and the GAO rightly upheld the Eurocopter & Sikorsky challenge. The USAF went back, changed the requirement to eliminate the size issue, and Boeing ended up winning anyway because it filled the mission better and Boeing was able to prove that the HH-47 was more survivable than the US-101 or S-95. I personally don't agree with it and a lot of the USAF Special Forces guys don't either, but the second competition Boeing did win fair and square.

The point is - if NG/EADS had offered the A300 or A310 based MRTT that they were originally going to and won, Boeing wouldn't have complained. When NG/EADS won with the A330 after the USAF told Boeing specifically (and in writing) that they could not offer the 777, there was something wrong, and a lot of people, most especially the end users (the Air Mobility Command & the US Theater Commanders) were upset about it and made their displeasure known.

Sorry, but this issue hits close to home for me. The USAF's the parent of my major volunteering and I have family that spent their entire lives serving in that branch, so I have a certain affection for it. However, in recent years, the management of that branch has proven exceedingly inept and unable to deliver to the warfighter the tools they need at the time they need them and instead spent their time playing politician instead of leader. As such, this has been the pinnacle of why I was so glad to see that many of those who were the problem are being flushed out by Defense Secretary Gates.

[Chris Trott]

BTW, to quicken everyone's search, here's some material to read.

First, the GAO's report -

United States Government Accountability Office
Washington, DC 20548

Office of the Comptroller General
of the United States

Statement Regarding the Bid Protest Decision Resolving the Aerial Refueling Tanker Protest by The Boeing Company
B-311344 et al., June 18, 2008

The Boeing Company protested the award of a contract to Northrop Grumman Systems Corporation under solicitation No. FA8625-07-R-6470, issued by the Department of the Air Force, for KC-X aerial refueling tankers to begin replacing its aging tanker fleet. Boeing challenged the Air Force’s technical and cost evaluations, conduct of discussions, and source selection decision.

Our Office sustained Boeing’s protest on June 18, 2008. The 69-page decision was issued under a protective order, because the decision contains proprietary and source selection sensitive information. We have directed counsel for the parties to promptly identify information that cannot be publicly released so that we can expeditiously prepare and release, as soon as possible, a public version of the decision.

Although the Air Force intends to ultimately procure up to 179 KC-X aircraft, the solicitation provided for an initial contract for system development and demonstration of the KC-X aircraft and procurement of up to 80 aircraft. The solicitation provided that award of the contract would be on a “best value” basis, and stated a detailed evaluation scheme that identified technical and cost factors and their relative weights. With respect to the cost factor, the solicitation provided that the Air Force would calculate a “most probable life cycle cost” estimate for each offeror, including military construction costs. In addition, the solicitation provided a detailed system requirements document that identified minimum requirements (called key performance parameter thresholds) that offerors must satisfy to receive award. The solicitation also identified desired features and performance characteristics of the aircraft (which the solicitation identified as “requirements,” or in certain cases, as objectives) that offerors were encouraged, but were not required, to provide.

The agency received proposals and conducted numerous rounds of negotiations with Boeing and Northrop Grumman. The Air Force selected Northrop Grumman’s proposal for award on February 29, 2008, and Boeing filed its protest with our Office on March 11, supplementing it numerous times thereafter. In accordance with our Bid Protest Regulations, we obtained a report from the agency and comments on that report from Boeing and Northrop Grumman. The documentary record produced by the Air Force in this protest is voluminous and complex. Our Office also conducted a hearing, at which testimony was received from a number of Air Force witnesses to complete and explain the record.

Following the hearing, we received further comments from the parties, addressing the hearing testimony as well as other aspects of the record.
Our decision should not be read to reflect a view as to the merits of the firms’ respective aircraft. Judgments about which offeror will most successfully meet governmental needs are largely reserved for the procuring agencies, subject only to such statutory and regulatory requirements as full and open competition and fairness to potential offerors. Our bid protest process examines whether procuring agencies have complied with those requirements.

Our review of the record led us to conclude that the Air Force had made a number of significant errors that could have affected the outcome of what was a close competition between Boeing and Northrop Grumman. We therefore sustained Boeing’s protest. We also denied a number of Boeing’s challenges to the award to Northrop Grumman, because we found that the record did not provide us with a basis to conclude that the agency had violated the legal requirements with respect to those challenges.

Specifically, we sustained the protest for the following reasons:

1. The Air Force, in making the award decision, did not assess the relative merits of the proposals in accordance with the evaluation criteria identified in the solicitation, which provided for a relative order of importance for the various technical requirements. The agency also did not take into account the fact that Boeing offered to satisfy more non-mandatory technical “requirements” than Northrop Grumman, even though the solicitation expressly requested offerors to satisfy as many of these technical “requirements” as possible.

2. The Air Force’s use as a key discriminator that Northrop Grumman proposed to exceed a key performance parameter objective relating to aerial refueling to a greater degree than Boeing violated the solicitation’s evaluation provision that “no consideration will be provided for exceeding [key performance parameter] objectives.”

3. The protest record did not demonstrate the reasonableness of the Air Force’s determination that Northrop Grumman’s proposed aerial refueling tanker could refuel all current Air Force fixed-wing tanker-compatible receiver aircraft in accordance with current Air Force procedures, as required by the solicitation.

4. The Air Force conducted misleading and unequal discussions with Boeing, by informing Boeing that it had fully satisfied a key performance parameter objective relating to operational utility, but later determined that Boeing had only partially met this objective, without advising Boeing of this change in the agency’s assessment and while continuing to conduct discussions with Northrop Grumman relating to its satisfaction of the same key performance parameter objective.

5. The Air Force unreasonably determined that Northrop Grumman’s refusal to agree to a specific solicitation requirement that it plan and support the agency to achieve initial organic depot-level maintenance within 2 years after delivery of the first full-rate production aircraft was an “administrative oversight,” and improperly made award, despite this clear exception to a material solicitation requirement.

6. The Air Force’s evaluation of military construction costs in calculating the offerors’ most probable life cycle costs for their proposed aircraft was unreasonable, where the agency during the protest conceded that it made a number of errors in evaluation that, when corrected, result in Boeing displacing Northrop Grumman as the offeror with the lowest most probable life cycle cost; where the evaluation did not account for the offerors’ specific proposals; and where the calculation of military construction costs based on a notional (hypothetical) plan was not reasonably supported.

7. The Air Force improperly increased Boeing’s estimated non-recurring engineering costs in calculating that firm’s most probable life cycle costs to account for risk associated with Boeing’s failure to satisfactorily explain the basis for how it priced this cost element, where the agency had not found that the proposed costs for that element were unrealistically low. In addition, the Air Force’s use of a simulation model to determine Boeing’s probable non-recurring engineering costs was unreasonable, because the Air Force used as data inputs in the model the percentage of cost growth associated with weapons systems at an overall program level and there was no indication that these inputs would be a reliable predictor of anticipated growth in Boeing’s non-recurring engineering costs.

We recommended that the Air Force reopen discussions with the offerors, obtain revised proposals, re-evaluate the revised proposals, and make a new source selection decision, consistent with our decision. We further recommended that, if the Air Force believed that the solicitation, as reasonably interpreted, does not adequately state its needs, the agency should amend the solicitation prior to conducting further discussions with the offerors. We also recommended that if Boeing’s proposal is ultimately selected for award, the Air Force should terminate the contract awarded to Northrop Grumman. We also recommended that the Air Force reimburse Boeing the costs of filing and pursuing the protest, including reasonable attorneys’ fees. By statute, the Air Force is given 60 days to inform our Office of the Air Force’s actions in response to our recommendations.

Information about GAO’s bid protest process can be found at www.gao.gov.

Another short article on the details of the GAO's findings-

GAO Releases Details Of Boeing Tanker Ruling
The Wall Street Journal 06/26/2008
Author: August Cole
(Copyright (c) 2008, Dow Jones & Company, Inc.)

Northrop Grumman Corp.'s fight to hold on to a $40 billion Air Force jet contract just got tougher.

The Government Accountability Office issued a report Wednesday alleging that Northrop's bid may have been ineligible because it missed key Defense Department parameters. It also said the Air Force had penalized Northrop's rival -- Boeing Corp. -- in the bidding process. The 67-page report explains the details of the GAO's surprise ruling last week that the bidding may need to be reopened because of numerous flaws in how the Defense Department contract was awarded.

The GAO said the Air Force's decision to go with an aerial tanker jet made by European Aeronautic Defence & Space Co.'s Airbus unit and sold to the U.S. by Northrop Grumman was "undermined by a number of prejudicial errors that call into question the Air Force's decision that Northrop Grumman's proposal was technically acceptable and its judgment concerning the comparative technical advantages accorded Northrop Grumman's proposal."

The report comes at a difficult moment for the Air Force, whose top brass was removed this month after security lapses. Criticisms of its handling of the contract raise questions about the Air Force's ability to manage its massive weapons-buying budget. The GAO, the investigative arm of Congress, found earlier problems with a rescue-helicopter contract valued at more than $10 billion that is now almost two years late.

Wednesday's report points to major flaws that plagued the bidding for the tanker jet. The Air Force was wrong in saying Northrop's plane was cheaper to operate, the GAO said. The Air Force had maintained that Northrop's Airbus A330-based offering was a better value for taxpayers than Boeing's 767-based design. If the Air Force had stuck to its contracting guidelines, held equal discussions with both companies and handled cost calculations better, the GAO wrote, "Boeing would have had a substantial chance of being selected for award."

The report gives Boeing's supporters ample ammunition to renew their assault on the Air Force's contracting body and make a political case for running a new competition and reversing the award. The Air Force wants to buy 179 tanker jets capable of hauling cargo and refueling other airplanes in the air.

A Boeing spokesman said the full GAO report validated the company's protest. "It is clear the award was the result of a flawed process," the spokesman said.

"The document makes clear that the GAO's issues with the contract do not reflect on the tankers' capabilities," Paul Meyer, Northrop Grumman tanker program manager, said in a statement.

Northrop now faces a difficult choice about how to handle the next phase of the contract. After three months of intense media campaigns and lobbying from Boeing and Northrop, a sort of cease-fire is in place in Washington.

Northrop has stopped sending out its daily email alert, known as "Tanker Truths." Ads on local radio endorsing the Northrop plane, known as the KC-30 after the Airbus A330 on which it is based, are no longer aired.

The GAO ruling last week is likely to force a new round of competition between the two companies. Ousted Air Force Secretary Michael Wynne said last Friday that he expected the bidding to be reopened. The contract, which is the Air Force's top acquisition priority, also has moved to the front burner for top Defense Department officials.

After Air Force Secretary Wynne and Chief of Staff Gen. Michael Moseley were fired this month over a nuclear-security issue, the expectation grew that Defense Secretary Robert Gates would have to step in to guide the service through one of its rockier periods.

Finally, a piece by one of the people who got the whole KC-X program rolling -

Op-Ed: Let's solve the tanker mess
BY: Gen. John Handy (ret.), Human Events
07/07/2008

Most of us in the Air Force mobility community were a bit surprised by the decision to buy the quite large Airbus-330 tanker instead of the smaller Boeing 767 tanker. But the real shock was in the unusually harsh language used by the Government Accountability Office in overturning that decision. It was the harshest language used to overturn an action by the Air Forces choice that I have read in my entire career.

In that career -- spanning 39 years in the Air Force -- I was fortunate enough to have been the Commander of the United States Transportation Command (USTRANSCOM) and the USAF Air Mobility Command (AMC) from November 2001 until retiring from the Air Force in October 2005.

I devoted many years to the operation of air refueling tankers in support of the hundreds of other aircraft and tens of thousands of soldiers, sailors, airmen, marines and Coast Guardsmen who depend on them to create the “air bridge” that enables American forces and relief supplies to reach any corner of the world in only a few hours. Without the tankers performing when and where needed, America would not -- quite literally -- be a “superpower.”

In the many challenges we faced in those years, the soldiers, sailors, airmen and marines in TRANSCOM pulled together as a joint team to get the job done on a daily basis throughout the entire time I was blessed to be their commander. We engaged in multiple crises around the world -- humanitarian disasters as well as significant military conflicts in both Afghanistan and Iraq.

The most serious limitation we had was our equipment: the shortage of adequate mobility assets -- meaning airlift and air refueling aircraft. First among those problems was then, and is now, the tankers.

I spoke about the air refueling tanker age and shortages on a routine basis with anyone who would listen. And I did so in the context of the other requirement those badly needed assets would support which includes virtually everything the armed services have to move from one place to another that can be loaded onto an airplane.

The shocking language of the GAO decision compels me to do something I’ve never done before: to speak out publicly. I am not employed by either Boeing or Northrop-Grumman. But the service I’ve devoted most of my life to appears to need a bit of help.

Somewhere in the acquisition process, it is obvious to me that someone lost sight of the requirement. Based on what the GAO decided, it’s up to people such as myself to remind everyone of the warfighter requirement for a modern air refueling tanker aircraft.

Recall that we started this acquisition process in order to replace the Eisenhower era KC-135 aircraft with a modern version capable of accomplishing everything the current fleet does plus additional needs for the future. Thus the required aircraft is of small to medium size much like the KC-135. Not a very large aircraft like the current KC-10, which may be replaced later with a comparably large aircraft.

Why a smaller to medium size aircraft? Because, first of all, you want tankers to deploy in sufficient numbers in order to accomplish all assigned tasks. You need to bed them down on the maximum number of airfields around the world along with or close to the customer -- airborne fighters, bombers and other mobility assets in need of fuel close to or right over the fight or crisis. This allows the supported combatant commander the ability to conduct effective operations around the clock. The impact of more tankers is more refueling booms in the sky, more refueling orbits covered, wider geographic coverage, more aircraft refueled, and more fuel provided. A “KC-135 like” aircraft takes up far less ramp space, is far more maneuverable on the ground and does not have the risk of jet blast reorganizing your entire ramp when engine power is applied.

The second requirement is survivability. The aircraft and crew must be able to compete in a threat environment that contains enhanced surface to air missiles and other significant threats. The crew must receive superior situational awareness to include automatic route planning and re-routing and steering cues to avoid those threats. They must have maximum armor protection, fuel tank explosion protection and world class chemical/biological protection. All of this means the warfighter has the requirement for a large number of highly flexible and survivable air refueling aircraft.

I also want the acquired aircraft to be integrated with the current defense transportation system. That means 463L compatible pallets; floor loaded on a freighter capable floor all compatible with the current modern airlift fleet. When I put passenger seats in this aircraft, I want to be able to use existing airlift aircraft seats and pallets. When tasked with our precious aero medical mission, I want to be able to use integral medical crew seats, onboard oxygen generation systems, more outlets and be able to use the USAF patient support pallet. I do not want to harness the USAF with the problem of going out to acquire unique assets due to a more radically sized and equipped tanker aircraft.

Now, if you look at these rather simple requirements and look at the previous offerings from industry, you might agree with me that the KC-767 more closely meets these needs than the competition. If that’s what the warfighters need, that’s what they should get.

My purpose is only to help select the right aircraft that meets the warfighter’s requirements. It is not anything else. With that thought in mind, the KC-767 -- or another that is the same size and has the same capabilities -- is the right aircraft for the USAF. Now let’s see what the new leadership of the Air Force does to obtain the right aircraft for the warfighter.

[Trev Clark]

I think that was a little bit like fishing , I knew as soon as I posted this item (or dangled my bait, which could be anything against Uncle Sam) I would be on the recieving end of a post of huge complexity and not without a certain amount of anger from Mr Trott.

This time, even I was suprised by the size of reply and the total misunderstanding of the British sense of irony and satirical humour! I guess we Brits are alone in being able to laugh at ourselves (and our mutually stupid governments and civil service) as a nation and any attempt to export this this ends up in miles of red tape and words.....rather like this bid! Still I am glad that the RAF tanker replacement is well on track

Sorry, but this issue hits close to home for me. The USAF's the parent of my major volunteering and I have family that spent their entire lives serving in that branch, so I have a certain affection for it. However, in recent years, the management of that branch has proven exceedingly inept and unable to deliver to the warfighter the tools they need at the time they need them and instead spent their time playing politician instead of leader.

A great many of here are serving or ex forces, frustrating though this sort of thing is, if you cannot laugh about it, you will go crazy. The old saying here is 'If you cannot take a joke, you should not have joined'...said with GREAT IRONY!!

OK, I am bracing myself hard for the response :fart:

[Garry Russell]

Wow

Chris mate

You take things too seriously and now we have an unreadable thread so much have been put into it........do you really think anyone is going to read through all that and take it in????......

Also reproducung large chunks or reports shows a blind following of others ideas without any personal opinion.....basically just using it to try and prove others wrong for the sake of it.

Of course we don't know the full story and neither do you as what goes on behind the scenes is never known.

Perhaps a bit more life experience of how things actually happen rather than what is deemed to be correct in an ideal World would make the original intention of the post clearer ;-)

Garry

[Hot_Charlie]

Oh well, if the USAF find themselves with an inferior tanker, then we'll just have to man-up and cope.

Save NG/EADS building a factory too.

[Trev Clark]

I am suprised the MOD has not asked the US what it is going to do with all those KC-135's when they are finished with them, modern engines and avionics give them an advantage on what the RAF have now :roll:
Maybe they are looking into all those nice 'nearl new' RyanAir 737's that are going spare soon! I have a feeling that the second hand airliner market will soon drop like house prices. A bit of 'Falklands Spirit' and some gaffer tape and we could have a new tanker fleet in time for the upcoming (new and enhanced) Middle East conflict

[Hot_Charlie]

I am suprised the MOD has not asked the US what it is going to do with all those KC-135's when they are finished with them, modern engines and avionics give them an advantage on what the RAF have now :roll:

VC10 wins hand's down on looks though. ;-) Having said that, at this rate we'll have the A330 in service doing AAR well before KC-X replaces the 135.

[Chris Trott]

Also reproducung large chunks or reports shows a blind following of others ideas without any personal opinion.....basically just using it to try
and prove others wrong for the sake of it.

Garry, I have a lot of respect for you, but I have to disagree on this point. I posted my position on the matter. A position arrived at before the report was ever released. The information I posted is first the report that the article leaves out and editorializes incorrectly. The second is more information on the specifics of why the GAO made their findings the way they did, and the third is an opinion from the former commander of the AMC and USTRANSCOM who started the push for the KC-X program and is probably only one of a handful of people who knows the whole story from beginning to end. If you choose not to read it, fine. If you think I'm being dense, fine. The point is, this is an extremely serious matter here in the US. It's not about the jobs. It's about the fact that we have a military at war with terrorists right now and the services aren't doing their job in acquiring the right tool for the job in a timely manner.

In the UK you guys may resign yourselves to getting what you get, but in the US we (the Taxpayer) tend to exercise our right as the bosses of those spending our money to make sure that it's being spent right. And lately, the People have been pushing back against the government more and more against buying the wrong tool at the wrong time and spending a ton of money on it. I understand the concept of going crazy if you take it all too seriously, but at the same time, this is a very serious thing that's going on and people's lives end up on the line in the end when these tankers are flying and supporting those strike packages or supporting those transports flying much needed relief supplies into a disaster area.

[TSR2]

Hi Chris,

I may have got the wrong end of the stick but from the synopsys I have read in the press, the decision was originally made by the airforce, and has now been over ruled by the politicians, and its a defence committee that will now make the decision. While this might sound like getting good value for tax payers, should the airforce not be the ones to make the decision (as they probably know a whole lot more about AAR than a committee or the average taxpayer?)

Just curious.