http://www.cnn.com/2008/US/02/29/air.force.tankers/index.html

Quote :

"Northrop Grumman gets $40B deal to replace Air Force tankers WASHINGTON (CNN) -- The U.S. Air Force on Friday announced one of the largest military acquisition programs in U.S. history, saying the service had chosen Northrop Grumman over Boeing to replace its aging air refueling tanker fleet. art.refuel.usaf.jpg A KC-135 Stratotanker prepares to refuel a B-2 over the Pacific Ocean in an undated photo. Click to view previous image 1 of 3 Click to view next image "We look forward to partnering with them as we continue to defend our great nation in the future," said Secretary of the Air Force Michael Wynne. The announcement was a surprise to many in the business industry who expected Boeing to be favored over the company, which will use a European company's airframe, Airbus, for the tanker. The $40 billion deal to start replacing 179 tankers -- known as the KC-45A program -- will expand to over $100 billion to replace the entire fleet of almost 500 planes, Pentagon officials said. Boeing proposed a tanker based on its 767 commercial airliner, while Northrop -- working with Boeing arch-rival Airbus and its parent company, European Aeronautic Defense and Space Company (EADS) -- offered a model based on the Airbus A330 airliner, which is larger than the 767. To sweeten the deal, EADS announced it would put a plane assembly plant in Mobile, Alabama, if the company won the contract. Boeing, a U.S. company, builds planes in the state of Washington. "We had two very competitive offers in this competition," said Sue Payton, assistant secretary of the Air Force for acquisition, briefing reporters after Wynne made the announcement. "Northrop Grumman clearly provided the best value to the government." Payton said "debriefings" were planned for both competitors, and declined to say where Boeing's offer fell short until after that happens, sometime on or after March 12. "We owe it to Boeing to give them the first debrief on this," she said. The Air Force has been trying since 2001 to replace the tanker fleet, which has some planes close to 50 years old, according to Air Force statistics. The average age of the fleet is more than 24 years, while the average age of a U.S. commercial airline fleet is just over nine years, according to Air Force officials. It will take several years to get the new KC-45 flying, said Gen. Arthur Lichte, commander of Air Mobility Command. "We hope that we'll get the first aircraft into the test program beginning in 2010. And we're hoping that the first capability operationally will be about 2013," he said. The contract to replace the aging fleet of air refueling tankers was mired in corruption and political wrangling for years. In 2004, Congress, led by Sen. John McCain, R-Arizona, banned the Air Force from working out a lease and purchase deal with Boeing after a federal investigation uncovered improprieties at the highest levels of the Air Force procurement process. Critics also complained that Boeing was awarded the contract without competition and that the deal was a bailout for the 767 program, which was facing slumping sales. Congress forced the Air Force to start a new contract bidding plan that allowed Airbus to compete for the contract. Pentagon officials said the losing company could protest and ask the Government Accountability Office to investigate the decision, which would delay the program again. Although the deal announced Friday is one of the largest U.S. military contracts in history, it falls short of the Army's recent $200 billion Future Combat System program and the Pentagon's future F-35 Joint Strike Fighter program, expected to be over $200 billion."

so do you have any thoughts on this? i like that mobile is gonna get some jerbs...how muchd o you know on that whole record 200 billion dollar f-35 thing?

2/29/2008 9:26:13 PM

yeah duke

please tell us how you feel about some Air Force planes

fuck

how do you feel about the navy carriers?

or the army tanks

or the new girl scout uniforms

2/29/2008 9:30:42 PM

The one thing that really bugs me about current military aircraft production is that they generally make sure that at least one part is made at a different factory in every state. I've seen the Air Force brag about this being a sign of patriotism and national unity, but it's mostly done so that no one in congress will try to cancel the program out of fear that they'll be blamed for lost jobs in their home states.

As far as I know that's been the standard way of doing business since the Carter administration cancelled the B1 bomber in the 70s (which the Reagan administration reactivated a few years later).

If I'm way off on any of that feel free to correct me.

2/29/2008 9:34:56 PM

Even the military is not buying american?

3/1/2008 12:18:08 AM

i'm pretty sure northrop grumman is american oops. didn't read the article.

[Edited on March 1, 2008 at 12:22 AM. Reason : .]

3/1/2008 12:21:26 AM

The problem is that as aircraft systems become more expensive and fewer platforms are required, each company is fighting tooth and nail for every single contract. That's why there are only three military fixed-wing aircraft manufacturers left in the United States, down from a much larger number just fifteen years ago, there's just not a lot of work out there. Therefore, they have to use every possible advantage to try and win a program, even if it means courting every member of Congress.

Consider that the loss of a contract could very easily lock a company out of an entire sector of the market for decades. A contract like this can easily go for twenty, thirty years. Sure, theoretically the Air Force could buy a second model of tanker, but it won't realistically because of the high price tag in developing a new one (typically $5-10 billion over three to five years). A big loss such as this could easily wipe out an entire corporate division or even a manufacturer.

Boeing's earlier loss in the UCAS bid has effectively locked them out of that market, and if this award is sustained, then they'll be knocked out of the tanker manufacturing for at least two decades. Boeing held their 767 line open for this (as Airbus for their A330 line), and with the loss, their tanker blueprints are out the window as well as the knowledge base for designing the boon technology. By the time the next tanker bid comes around, it may only be EADS who holds the knowledge on how to build one. That's just the nature of the modern military aircraft market. Commercial aircraft market too for that matter.

Directly addressing the comment before, I think Boeing's C-17 Transport aircraft is built with parts from 48 states. That's why the program has been near impossible to kill in Congress.

This could potentially be a really ugly battle though if Boeing decides to appeal (which they probably will given that it's $40 billion at stake). Note for example that two key members of the Senate Appropriations Committee, Subcommittee on Transportation, Housing and Urban Development, and Related Agencies who's jurisdiction includes the FAA happens to be chaired by Patty Murray (D-WA) and Kit Bond (R-MO)... both states which possess LARGE Boeing facilities and the former who's state would have hosted the tanker assembly line. Boeing has a lot of allies in Congress, particularly on the Democratic side, and with the current economic downturn, strong union backing of Boeing (since the Northrop plant being built is in union free in Alabama), and the Republican Party's weakness (unable to defend Alabama as easily), things could drag out for a long time. The fact that the Air Force also changed the model used to judge the aircraft days before the award doesn't help either despite transparency claims.

If you want another angle, the Air Force is practically begging Boeing not to appeal because of the time delay. Not sure what the USAF could threaten them or offer them however given that there are so few major platform deals coming in the near future. Boeing itself is in trouble since by 2012, most of its military aircraft lines will probably close down (F-15, F/A-18, F-22, C-17), drastically reducing if not closing down two of its assembly lines: Long Beach, CA (Douglas Aircraft) and St. Louis (McDonnell-Douglas).

All that being said, Boeing did dig themselves in a hole to begin with having screwed up the first tanker deal back in 2003. Let this be a lesson that corporate ethics will come and bite you in the ass, in this case, $40 billion worth.

[Edited on March 1, 2008 at 12:45 AM. Reason : .]

3/1/2008 12:42:14 AM

god forbid we title our threads with a meaningful subject.

3/1/2008 12:52:43 AM

Quote :

"All that being said, Boeing did dig themselves in a hole to begin with having screwed up the first tanker deal back in 2003. Let this be a lesson that corporate ethics will come and bite you in the ass, in this case, $40 billion worth."

I forgot about this. These assholes deserve it then

3/1/2008 1:06:28 AM

^this is dnl we are talking about...

[Edited on March 1, 2008 at 1:07 AM. Reason : w]

3/1/2008 1:06:53 AM

sheesh...just trying to spice up soap box a little...

3/1/2008 1:08:53 AM

So we're letting a socialized aerospace company build our military craft?

I thought we had some law where we couldn't depend on foreign nations for the production of military equipment or something like that.

3/1/2008 1:10:31 AM

^ It would appear that it won't be much of an issue since the contract has been awarded to an american company and production of the aircraft will be on american soil. Theoretically, we could continue production of the tankers in the event of a major war in which relations with europe have catastrophically deteriorated.

3/1/2008 9:36:14 AM

Quote :

"Boeing itself is in trouble since by 2012, most of its military aircraft lines will probably close down (F-15, F/A-18, F-22, C-17),"

f-22 = lockheed

and the f-18 line won't be closing down anytime soon.


[Edited on March 1, 2008 at 2:36 PM. Reason : ,]

3/1/2008 2:35:36 PM

yeah, they're just starting to build the EA-18G

3/1/2008 2:51:13 PM

^exactly

3/1/2008 3:34:45 PM

apparently the contract to build the new tanker is going to be shared between Northrop Grumman and Airbus, whose parent company is the European equivalent of NASA.

Boeing is accusing the Pentagon of favoring European workers over American.

3/1/2008 3:38:21 PM

i wonder how much of this stuff is classified

3/1/2008 8:20:57 PM

Quote :

"^ It would appear that it won't be much of an issue since the contract has been awarded to an american company and production of the aircraft will be on american soil. Theoretically, we could continue production of the tankers in the event of a major war in which relations with europe have catastrophically deteriorated. "

From what I read they were manufacturing it over there, but assembling it here.

3/1/2008 8:21:25 PM

^^ that's not the sort of info that is classified

as you can see, the first sentence is "The U.S. Air Force on Friday announced..."

3/2/2008 12:07:08 AM

i know but i still bet theres a ton of classified info...

3/2/2008 3:57:02 AM

where? like what?

3/2/2008 4:55:13 AM

They classified the fact that each plane will also have a wet bar.

3/2/2008 9:42:51 AM

and a rotating stage with a pole.



how'd i miss this one? redguard really has some good insight here:

Quote :

"This could potentially be a really ugly battle though if Boeing decides to appeal (which they probably will given that it's $40 billion at stake). Note for example that two key members of the Senate Appropriations Committee, Subcommittee on Transportation, Housing and Urban Development, and Related Agencies who's jurisdiction includes the FAA happens to be chaired by Patty Murray (D-WA) and Kit Bond (R-MO)... both states which possess LARGE Boeing facilities and the former who's state would have hosted the tanker assembly line. Boeing has a lot of allies in Congress, particularly on the Democratic side, and with the current economic downturn, strong union backing of Boeing (since the Northrop plant being built is in union free in Alabama), and the Republican Party's weakness (unable to defend Alabama as easily), things could drag out for a long time. The fact that the Air Force also changed the model used to judge the aircraft days before the award doesn't help either despite transparency claims."

[Edited on March 2, 2008 at 9:24 PM. Reason : ]

3/2/2008 9:19:22 PM

Quote :

"and the f-18 line won't be closing down anytime soon."

A quote from the St. Louis Post-Dispatch (where Boeing's defense arm is headquartered). Richard Aboulafia is also considered one of the top aerospace business experts in the business.

Quote :

"Boeing's loss increases the pressure to keep its other military plane projects viable, said Richard Aboulafia, an aerospace analyst with the Teal Group in Fairfax, Va. Boeing's plane-making programs generate good cash flow, but many are on their last legs. "Their platforms are under pressure," he said. "In five years, the C-17, the F-15, the F/A-18, the T-45, they're all going to be either ramping down or gone.""

The F/A-18 line might not close by 2012, but it will be significantly scaled back by then as the F-35 is phased in. The E/A-18G, while a significant win for Boeing, isn't going to singlehandedly save the line given the aircraft's highly specialized nature.

3/3/2008 12:05:34 AM

Another thought on the actual tanker itself. I know that Northrop won in part because they had the bigger plane with greater fuel and cargo capacity versus the Boeing aircraft which was smaller but could operate on more fields.

To be fair, I don't think Boeing had many other options in terms of the actual plane itself. Given the cost constraints, the 767 was the only aircraft that would have fit the bill for the Boeing tanker: the 777 was simply too large while the 787, the 767 replacement, has its line booked solid and supply chain maxed out for the next five years. In that case, the A330 just happened to have the advantage, falling between the two Boeing aircraft. Developing a new plane was out of the question as well: at $5 to $10 billion and three to five years to develop, build, and test a new airframe plus the cost of setting up a new line, going with a whole new aircraft was impossible.

Perhaps because of this, Boeing was ultimately doomed from the start even with its tremendous advantage in tanker technology. I suppose this is the end for the Boeing tanker business.

[Edited on March 3, 2008 at 12:23 AM. Reason : .]

3/3/2008 12:22:27 AM

seems like this thread is more perfect for redguard

3/3/2008 12:31:45 AM

maybe if you'd title the damn thread correctly in the first place... we could just stick to the subject.

3/3/2008 11:28:12 AM

Quote :

"The F/A-18 line might not close by 2012, but it will be significantly scaled back by then as the F-35 is phased in."

the f-35C won't even be close to being incorporated into the navy by 2012. no way in hell. plus the navy plans on ordering, what, less than 300 of them?

[Edited on March 3, 2008 at 12:24 PM. Reason : .]

3/3/2008 12:23:41 PM

Analysts at the Teal Group are projecting that following 2012, there are only 61 aircraft remaining with the last 10 delivered in 2015. Given that they currently deliver some 40-50 aircraft a year right now (and have delivered 300 so far), 61 aircraft over three years is just a final trickle. The prospect of selling more F/A-18's is also fading when competing with 5th generation aircraft. The only two things that might extend the line is the India next generation fighter competition which is a toss up at best or another multiyear buy due to more schedule slips by the F-35C but this isn't going to be a huge number of aircraft.

[Edited on March 3, 2008 at 4:55 PM. Reason : .]

3/3/2008 4:43:02 PM

^^ well, the USMC and USAF are going to buy them, too, and I'm sure we'll export a sizeable number of them too. I mean, it is the JOINT Strike Fighter.

but no, the Navy won't be flying a bunch of F-35s around by 2012.

3/4/2008 1:25:00 AM

more than the USMC, Navy, and USAF are going to be using the JSF

they definitely won't be flying anytime soon, since the pilots will require extensive training

3/4/2008 2:25:57 AM

i realize that

but that's not the point of this thread

and the f-35 won't be flying anytime soon not because of pilot training, but because the thing hasn't even started operational testing yet. hell there's only ONE F-35 flying right now

[Edited on March 4, 2008 at 5:17 PM. Reason : .]

3/4/2008 5:12:43 PM

http://news.yahoo.com/s/ap/20080311/ap_on_el_pr/mccain_airbus;_ylt=AsMNq8PnNrEioiPW8v0qmtys0NUE

McCain advisers lobbied for Airbus

3/11/2008 11:46:37 AM

bttt on request

6/20/2008 1:11:10 PM

i thought about asking you to bump this about 3 days ago


boeing won something in court

6/20/2008 1:12:10 PM

apparently boeing won their appeal, right?

6/20/2008 1:12:24 PM

yea

6/20/2008 1:13:02 PM

in related news, the first EA-18G is about to start flying...scheduled for a functional checkflight on monday (they'd flown it to NAS Whidbey Island, and it's been sitting in the hanger for a couple of weeks).

6/20/2008 1:17:36 PM

is that like the best of the best?

6/20/2008 1:24:13 PM

it's the best of the best in the world of electronic warfare.

6/20/2008 1:28:52 PM

how long does it take for the russians or chinese or other countries to design something that good?

[Edited on June 20, 2008 at 1:31 PM. Reason : how longs it take for other countries to catch up is essentially what i'm trying to ask]

6/20/2008 1:31:21 PM

well, no other countries really have an electronic warfare airplane comparable even to a Prowler (the airplane that the -18G is to replace). It's just not something they've invested in.

EW aircraft aren't really matched up against other aircraft, though--they aren't like (pure) fighters. The bigger question is how the -18g and hostile SAM systems match up.

6/20/2008 1:55:57 PM

Quote :

"how long does it take for the russians or chinese or other countries to design something that good?"

They're still off a long, long way. The Russians have the talent, but they've pretty much been shut down for the last decade and a half. The Chinese are good and probably have some clever asymmetric means of battling American aircraft, but in terms of waging this sort of electronic warfare, they're probably a generation behind (though I'm sure they'll catch up in a couple of decades).

I'll start with disclosure and say that I have a stake in Boeing. With that out of the way...

As for the topic at hand, Boeing won its appeal to the Government Accountability Office (GAO). This is significant for two reasons: the GAO almost never overturns a procurement decision, and this was one of Boeing's first appeals in years which is unusual for defense contractors. The fact that the GAO flat out told the USAF to rebid the contract is pretty surprising; I don't think that even Boeing had high hopes it would win this appeal. Theoretically, the USAF can ignore the GAO and do what it wants, but given that Congress is in an uproar, that the Democrats are in power, and that the economy is in bad shape, I doubt the Air Force will try anything...

For those of you who have interest in procurement, here's a link to the GAO's summary:
http://www.gao.gov/press/boeingstmt.pdf

In summary, the GAO didn't rule that one aircraft was superior to another. What they did find was that the Air Force screwed up the proposal evaluation process, essentially violating the very scoring system they openly published for this bid, to the point where Boeing could have won had it been done correctly.

Some examples:

USAF explicitly said that they would not count excess capacity but then turned around and gave Northrop bonus points for greater capacity.

USAF also said it would give consideration for fulfilling non-mandatory technical requirements (think of them as extra credit points) which Boeing did better than Northrop but then did not count them in their final scoring.

USAF miscalculated the total life cycle cost (lifetime cost of the aircraft from purchase to maintenance to disposal); when corrected, it had Boeing coming in cheaper per aircraft over Northrop versus the other way around.

During the bidding process, USAF told Boeing that they were meeting all the key requirements during status reports only to turn around and dock points in final scoring for not meeting all those very same requirements. They didn't do this to Northrop.

Northrop had refused to meet one of the main requirements in their final proposal, but USAF wrote it off as an "administrative oversight".

I don't think that this is an issue with Northrop/EADS more than being an issue with the Air Force. Rumor has it that the sacking of General Mosley and the other USAF guy was partially tied into this.

6/20/2008 2:08:39 PM

thats pretty messed up

6/20/2008 3:25:48 PM

The full GAO was released today.

Quote :

"A new, fuller account of the June 18 auditor's ruling that gives Boeing (BA) another shot at a $35 billion contract for refueling tanker planes details numerous instances of "prejudicial" bungling by the U.S. Air Force as it weighed Boeing's bid against the chosen manufacturer, Northrop Grumman (NOC) and European partner European Aeronautic Defence & Space (EAD.PA), the parent of Airbus. The Air Force made mistakes in math and procedure, failed to consider all information it was given, underestimated costs by hundreds of millions of dollars, changed specifications and ratings but only notified Northrop of the changes, and failed to check that the tankers could refuel all planes in the fleet, according to the 67-page Government Accountability Office ruling made public June 25. If not for the mistakes, said the GAO, "we believe that Boeing would have had a substantial chance of being selected for award." "

http://www.businessweek.com/bwdaily/dnflash/content/jun2008/db20080625_821288.htm

GAO report

http://www.gao.gov/decisions/bidpro/311344.pdf

6/26/2008 12:00:09 AM

^

Fascinating. My only hope is that the USAF's mishandling doesn't legitimize all the controversy about "outsourcing American jobs" that came about after the original decision. EADS/NG was and should still be considered a valid choice.

Having said that ... this combined with the nuke-mishandling incidents rather puts the USAF's executive performance into perspective. Thank God for Secretary Gates. The next Pres. needs to keep that guy around.

[Edited on June 26, 2008 at 3:48 AM. Reason : foo]

6/26/2008 3:47:58 AM

^ I agree with you on the action taken by Gates. His firings of Air Force Secretary Wynne and Chief of Staff General Moseley--and Army Secretary Harvey, for that matter--show that Gates doesn't coddle the top brass. In addition, Gates has helped retire Chairman of the Joint Chiefs General Pace, Deputy Chairman Admiral Gianbastiani, and head of Central Command Admiral Fallon.

Referred to by some as the "anti-Rumsfeld," Gates has demonstrated forceful leadership in his position. But the tension between Gates and the branches of the military has been building for a while--one publication described a primary reason for that tension:

Quote :

"The Defense secretary sees Iraq and Afghanistan as portents of the kind of conflicts the U.S. is most likely to be involved in over the next generation—'asymmetrical', messy, manpower-intensive. By contrast, he has come to believe, the services are infected with what he calls 'next-war-it is'—preparing to fight some future state vs. state conflict of a more traditional nature, and spending billions of dollars to buy the ultra-high-tech equipment to fight that future conflict."

6/26/2008 6:40:45 AM