All Tanker All the Time

kevin | Decision Making | Thursday, March 6th, 2008

I had no intention of becoming a Air Force Tanker guy, but here I am again, Round Three of the Affair in the Air. We open the drama with Congressman Norm Dicks waving pieces of paper in the air and accusing the Air Force of playing dirty.

During a contentious hearing Wednesday over the Air Force tanker deal awarded to Airbus parent EADS and Northrop Grumman, Rep. Norm Dicks said the Pentagon changed contract specifications to favor that team’s bid over Boeing’s so they wouldn’t drop out of the contest.

Waving documents, the Bremerton Democrat asked Air Force acquisitions director Sue Payton whether she had made changes “at the last minute” to the air-lift standards in the Request for Proposal (RFP) after the bidding process started Jan. 30, 2007 for the $40 billion contract.

“I urge you not to say ‘No,’ ” Dicks said, adding, “I have the letter. You did it.”

Payton, the main witness before the House Appropriations Committee, said any alterations to the criteria were not changes to the “requirements” in the RFP after it was formally issued.

Letters between Boeing and the Air Force dated March 2007 indicate the Pentagon raised the strength levels of the takeoff ramps for the tankers and shortened the amount of wing space needed between planes while they are parked.

This gave Airbus, with a heavier and wider aircraft, a better chance in the competition, Dicks said.

Boeing “strenuously objected” to the changes, he said. The company both wrote and called the Pentagon to complain.

Dicks said Boeing was told by the Air Force the revisions were necessary to keep the other team in the bidding and avoid a sole-source contract.

On one of the documents Dicks waved was a handwritten note from a Boeing employee, made after an unsuccessful appeal in a phone conversation with the Air Force. The note read: “This change was made to keep NG [Northrop Grumman] in the competition.”

Lurking in the background here is Senator John McCain who is the driving force behind scuttling the first Boeing Tanker contract and insisting on a fair and open competition. Whether he was motivated by ethical fervor, pique, or something else may yet prove to be a thorn in his run for the Roses.

Meanwhile, the good folks at Northrup Grumman have grown tired of playing punching bag and issued this statement on their website.

LOS ANGELES - March 5, 2008 - When the process to replace America’s aging fleet of KC-135 aerial refueling tankers began in 2005, the U.S. Air Force made clear that it wanted a full and fair competition. Northrop Grumman Corporation (NYSE:NOC) entered the competition with the understanding that if its proposal provided the best value to the warfighter and the American taxpayer, it could win the contract.

Since the Air Force’s decision to award Northrop Grumman the KC-45A contract was announced, numerous erroneous comments have been repeated in the media and in Congress. In response, the company wants to make the following points clear:

Industrial Base

* The Northrop Grumman KC-45A tanker program will create a new
aerospace manufacturing corridor in the southeastern United States.

* The KC-45A program helps return competitiveness to the U.S.
aerospace industry.

Jobs

* The Northrop Grumman KC-45A tanker program does not transfer any
   jobs from the United States to France or any other foreign country.

* The KC-45A tanker will support more than 25,000 jobs in the United
   States.

* The KC-45A U.S. supplier base will include 230 companies in 49
   states.

* Assembly and militarization of the KC-45A tanker will take place in
   Mobile, Ala., resulting in the creation of approximately 2,000 direct
   jobs in the United States.

Acquisition Process

* The KC-45A competition underwent the most rigorous, transparent
acquisition process in U.S. Department of Defense history.

* Throughout the process, both competitors in the KC-45A acquisition
hailed the Air Force for conducting a fair and open competition.

Foreign Content

* All modern jetliners are built from a global supplier base and the
   two entrants in the KC-45A competition are no exception. The Boeing
   tanker includes parts manufactured in Japan, United Kingdom, Canada
   and Italy. The Northrop Grumman tanker includes parts built in the
   United Kingdom, Germany, Spain and France.

* The Northrop Grumman KC-45A will include approximately 60 percent
   U.S. content. It is America’s tanker.

Foreign Suppliers to U.S. Military Programs

* There are numerous examples of transatlantic cooperation on vital
   U.S. military programs. Foreign suppliers currently play essential
   roles in the F-35 Joint Strike Fighter and the VH-71 Presidential
   Helicopter. In fact, on the C-27J Joint Cargo Aircraft program,
   Boeing is responsible for producing the Alenia Aeronautica (Italy)
   aircraft in Jacksonville, Fla.

* No sensitive military technology will be exported to Europe. For
   the KC-45A program, a commercial A330 jetliner will be assembled by
   American workers in EADS’s facility in Mobile. The aircraft will
   then undergo military conversion in an adjacent Northrop Grumman
   facility. All of the KC-45A’s critical military technology will be
   added by an American company, Northrop Grumman, in America, in
   Mobile Ala.

More later I’m sure.

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Tags: AirForce Tanker, Norm Dicks, EADS, Northrup Grumman, John McCain, Decision Making, Decision Quality