June 18, 2008
Boeing's Big Day
Obviously a big win for Boeing today with the GAO taking the uncommon step of recommending that the Air Force reopen bidding for the disputed tanker contract. While such a rebid itself is no slam dunk, the GAO's listing of Air Force errors is substantial:
The GAO said the Air Force:
- didn't assess the relative merits of the two contending airplanes in accordance with its stated criteria.
- gave Northrop extra credit for exceeding certain performance parameters, when this was expressly not allowed.
- failed to show that the A330 could refuel all of the Air Force aircraft it needs to service.
- misled Boeing about its failure to meet certain performance parameters, while giving fuller information to Northrop.
- dismissed a Northrop failure to agree to an aircraft maintenance plan as only "an adminstrative [sic] oversight" when it was a material requirement.
- made unreasonable estimates of the cost of constructing runways, ramps and hangars needed for the larger Airbus jet, which led to the conclusion that Northrop offered lower total program costs -- when in fact Boeing's overall cost was lower.
- inappropriately rejected Boeing's estimate of its non-recurring cost to develop the program, using an "unreasonable" model to increase that cost estimate.
A rebid could potentially match Airbus's previous winning product versus a revised Boeing competitor based on the 777 airframe, rather than the 767 employed in the initial Boeing bid. Based on discussion after the award to Airbus, it appears the EADS product loses to the 767 variant based on the original criteria from which the Air Force was chided for deviating.
Either way, this essentially amounts to a do-over for Boeing - assuming the Air Force follows the GAO recommendation as expected. Should Boeing win the next competition that would obviously be splendid news for the Northwest. If the company doesn't, our region would come out of such an event looking better if depressingly parochial complaints and an inadequate understanding of globalized economics stayed out of the mix in contesting such a turn of affairs.
UPDATE: formatting fixed.
Posted by Eric Earling at June 18, 2008
07:35 PM | Email This
1. Interesting!
So remind us all again where John McCain stood in the process.
2. The USAF is between a rock and a hard place on this one. After the original Boeing tanker scandal happened it made things very difficult to show any objectivity. If the USAF had initially chosen Boeing, it would have looked like an underhanded deal. If they chose Northrop/EADS, there would have been the usual cries of foul from the Boeing camp because EADS is a foreign company and also a rival of Boeing.
3. all I got to say is that Boeing does not deserve to receive every contract just because they are in the US.....there is no competition if the Govt can only use ONE company....we need to keep Boeing on its toes and to be priced competitively....otherwise, we might as well just say that Boeing is another branch of the govt and when you do that, you get the inevitable govt shoddy work.....
4. It's a shame that all the political chest-thumping has masked the real travesty of the original tanker decision and now results n estimated one year delay of delivery of this crucial war-fighting machine to our troops. The Boeing protest was completely accurate. The USAF screwed up, did not run the competition fairly and openly, and made a bad choice. The the choice was wrong on technical and cost grounds, not the political fooferaw of where the airplane was going to be built. That's coming from the annoying bleating of too many politicians. The Boeing plane was much lower risk and met or exceeded each key performance parameter. The Airbus plane would have burned about $40 billion worth of additional fuel over the life of the fleet and would have needed $12 billion of additional military construction. On the average an A330 burns about one ton more fuelper hour than a 767. Additionally, Northrop-Grumman/EADS planned to move the final assembly location about 5 times, eventually winding up near Mobile, AL in a facility that does not yet exist, with language and tools differences, and that was judged "lower risk" that producing additional 767s from a hot production line that has already delivered just over 1,000. The "lower risk" point is absolutely flabbergasting. Anyone who closely observed the process and paid attention to details and not the political noise-makers, realized that the original decision was a travesty, and the protest had nothing to do with globalization and politics.
5. Ahhh, Wiz-head
So remind us all again where John McCain stood in the process
+++++++++++++++++++++++++++++++++++++++++++
Maybe you forgot. Boeing was busted for doing something that was against the law.
Or maybe your one of them typical libs who thinks laws are just for the small people and not everyone else.
6. One of the interesting points in Boeing's protest was the footprint of the involved aircraft. Recall this contract is to replace the KC-135's. (The KC-10's would be replaced in a later contract.)
See the executive summary from Boeing:
http://blog.seattlepi.nwsource.com/aerospace/library/RedactedProtestFull_IntroSummary.pdf
There's a picture on page 12 of the .pdf file. Interestingly, the USAF chose a plane (KC-30) larger than the KC-10 to replace the KC-135. This would seem to be an issue on airfield where the KC-10 cannot be deployed due to runway/hangar constraints.
If a larger airplane is what the USAF wants, then like Eric noted, Boeing would be remiss not to offer the 777 (I'm thinking a 200LR) in a potential rebid.
7. American military aircraft,ships,tanks,subs,slingshots, ect ect. Need to be made in the US. Period! When the shooting starts or goverments change hands. Spare parts on "Furren Made" planes maybe hard to get. Nobody has more time on the books at doing this than the folks at the Lazy B. Why shop anywhere else?
8. Typical military- we want a bigger plane. Oh, you mean now that we have spent billions, we need new hangars to house all these plans at all our bases!! Ooops, my bad.
9. Hmmm...strange absence of Airbus supporters/Boeing bashers. Without gloating too much here, I do want to point out that those of us who know a little something about Boeing products have been vendicated. The competition was altered mid-stream to favor the EADS plane. Period. Noet to the Air Force... Start over. Re-Bid.
10. John McCain must be outraged. And the Senator from Illinois is again totally silent in support of his Chicago-based company.
11. Here's a 'Paul Harvey Page 2'
http://www.huffingtonpost.com/2008/06/22/mccains-battle-against-bo_n_108499.html
Fact is that Sen. McCain's staff included two lobbyists who were registered as EADS lobbyists.
Washington State needs to know how McCain wasn't and isn't supporting Boeing.