Forum: Modern Military Aircraft

Just wondering who Boeing paid off, or offered a cushy VP slot this time around.

I also read that the price Boeing gave is actually below cost and that they will be making it up later through unforeseen program cost overruns.

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Just wondering who Boeing paid off, or offered a cushy VP slot this time around.

I also read that the price Boeing gave is actually below cost and that they will be making it up later through unforeseen program cost overruns.

Links? Sources? Stuff like that seems to be the norm in the defense industry, so it wouldn't surprise me. I can't imagine a huge cost overrun for this program, though. If so, I'd definitely smell foul play. The KC-46 seems to be pretty similar to the KC-767. Development, Integration, and Testing should be pretty smooth and inexpensive. The aircraft and it's major systems are off-the-shelf items. The only hiccup I could see in this process is if the USAF wanted some fancy avionics put into its tankers.

During the original tanker deal, the USAF wanted to lease the tankers rather than buying them.
This was derailed when McCain got his hands on DoD documents outlining the sordid dealings between DoD and Boeing.
Seems that rather than save the USAF money, it would actually cost them more.
An Air Force acquisition official Darlene Druyun, in fact, ended up in prision, convicted on conspiracy charges.
Druyun had secretly talked with Boeing officials about a cushy post-government job even as she negotiated the terms of the tanker deal on the government’s behalf
Air Force Secretary James Roche was forced to retire.

So now Boeing submits a final bid after it receives after it received a copy of EADS's confidential bid info courtesy of the DOD.

So when EADS's President says that Boeing's bid is below cost, it's probably because he knows what it will cost Boeing's to build the plane. because EADS also received Boeing's bidding info from the DoD.

Yeah, this deal stank from start to finish.

To be honest, I'd prefer to void the deal with both companies and just give the deal to Kawasaki.
It will not save us any money, but at least it might get rid of some of the stink.

grinner68 wrote:

To be honest, I'd prefer to void the deal with both companies and just give the deal to Kawasaki.
It will not save us any money, but at least it might get rid of some of the stink.

Kawasaki? So you're OK with spending more $$$ than needed and pushing the in-service date back even further as long as it's done in an appropriate, non-stinky fashion?

It might be worth a (relatively) quick and dirty review of how we got here:

1. AF starts looking for a tanker to replace KC-135. ACC is yelling, "We need tankers now"!

2. Congress orders AF to get new tanker. At this point EADS does not have a tanker or a boom, so they are not a factor.

3. Although Congress orders AF to get new tankers at a certain rate, Congress does not actually provide enough money in any given year to fund the directed tanker buy. This was the Genesis of the lease option. Just like a car, it's cheaper in any given year to lease a car than buy it. This was the only way to carry out Congress' directions.

4. The thing about a lease, though, is it's only cheaper overall if you give back the car at the end of a lease and don't lease another one. Same thing for tankers. Naturally, AF needs to keep the tankers. A lease-buy is always more expensive than a straight out buy. Congress suddenly "discovers" this, is "shocked and outraged" and cries "Fraud! Deception"! The lease deal collapses. Now there was also the hinky AF-Boeing job swaps going on, but in the overall scheme of things, they became an excuse, not a reason, for the lease collapse. If everything had been as pure as the driven snow, tanker lease would have ended up in the same place. ACC is yelling, "We need tankers now"!

5. Competition for KC-135 replacement is announced. EADS now has a boom and has a plane that's a basis for a tanker, so they now can sit at the table. However, they realize they have a bigger plane and so say that unless they get some credit for more than just their tanker capabilities, but also their load-carrying, they won't play. USAF says OK, and final RFP adds in credit for load. All agree on ground rules

6. RFP comes out. Boeing is a bit arrogant and does not bid acquisition price as low as they can, figuring they'll make up the cost difference in lower O&M and facilities cost. EADS bids a unit price lower than expected, but remember, this is not a price competition.

7. During eval AMC (which is buying the a/c to support ACC) looks at the proposals and decides it would be cool if they could get a plane that could also help relieve the C-17s which are being overworked. Unfortunately, that's not what they asked for. The proper thing to do at that point would have been to stop, and solicit again with revised specs and mission requirements. Who knows, Boeing may have bid a KC-777. ACC is yelling, "We need tankers now"! So, AMC in effect "cooks the books" so that the bigger EADS plane wins no matter what.

8. Protest hits. GAO analyzes award and does not say that that KC-45 is the wrong choice for the AF, but that under the solicitation it published, how it said it would evaluate and under its own rules, the award could not be justified.

9. ACC is yelling, "We need tankers now"!

10. New competition is announced. However, it quickly becomes obvious that this one is fixed so that the KC-45 will win (EADS, BTW, had no part in this). 2nd competition collapses in a couple of months. ACC is yelling, "We need tankers now"!

11. 3rd competition announced.

12. Boeing says it will wait for solicitation before deciding whether to bid a KC-767 or 777. Northrop-Grumman pulls out of partnership with EADS.

13. Specifications announced, see # 1 above. AF announces this will be a (usually unprotestable) pure price competition. Based on specifications, Boeing bids KC-767. EADS asks that whole competition be delayed so they can refine their proposal and regroup over N-G departure. AF agrees to delay. ACC is yelling, "We need tankers now"!

14 In further comedy of errors, AF sends details of each companies' proposal and part of AF's evaluation of their proposal to the other company. Indications are that Boeing did not look at the files, at least someone in EADS did.

15. This time EADS may have been overconfident in their pricing, while Boeing priced very aggressively. Boeing wins on price. EADS decides not to protest (with a cost difference that much they would have a real rough time). AC is yelling, (you know).

One thought on Boeing bidding, "...at a loss". This is unlikely. Remember, Boeing is no longer a Seattle aircraft company. It is now a Chicago financial conglomerate that just happens to have aircraft as one of its products.

popcorn wrote:

http://www.dodbuzz.com/2011/02/24/boeing-shocks-with-landmark-tanker-win/

Didn't know where to post this but thought it would be of interest.

Boeing Shocks With ‘Clear’ Tanker Win

By Colin Clark Thursday, February 24th, 2011 5:11 pm
Posted in Air, International, Policy

Boeing continued its dominance of the U.S. airborne tanker business, winning the $35 billion contract to build 179 KC-X tankers, one of the biggest defense contracts in the next decade. The award shocked experienced observers who had predicted a big win for EADS NA. Word came from a Pentagon email announcing the initial $3.5 billion contract.

The LEAST surprising news I have seen for 11 years of this millenia.....

Maybe something will go smooth for a change. http://www.airforce-magazine.com/Featur ... anker.aspx

Waiting for late 2017 for initial IOC seems like a risky strategy for a commencing tanker recap program, imho. It could be critically assessed that this set of circumstances was more the likes of a Program asking the Air Force to fit into schedule, rather than the Air Force with certain requirement and safety needs implementing a Program to fit it's needs?

My view on this subject however, would be that it should have been an incrementally phased-in plan, with commercial derivatives possibly being LEASED and already operating, with the militarized variants purchased in MYB lots down the road once they were mature and ready to go. Perhaps a mix of commercially derived variants between the two manufacturers could have been Leased by now while waiting, to better enable competitive leasing agreements as well as offer flexibility in strategic tasking requirements.

All water under the bridge now, but perhaps we can agree to cross fingers that the older tankers will not suffer significant events in the interim say between now and 2018-2020. Another issue which could likely surface though, will be the 'total expected' number of militarized tankers to be procured. As it likely becomes more clear that far fewer Tactical aviation replacements will be afforded over the next 10-15 yrs and as a means to afford even less of those jets, greater numbers of legacy combat air frames than currently expected will likely be early-retired as well, and as the bomber fleet is further reduced too during austere budget environments ahead... it might be reasonable to assess fewer numbers of Strategic tankers will be required.

Forum: Modern Military Aircraft

BOEING WINS KC-X BID