Tanker Teams Start Posturing for USAF Competition
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Amy Butler/Paris
Both teams vying for a massive U.S. Air Force contract to build refueling tankers appear to be taking on a more collegial tenor as they await release of the Pentagon's requirements next month, but this newfound spirit could be the calm before the storm in a third attempt for the service to select a new design.
Boeing and Northrop Grumman/EADS North America engaged in a volley of assaults about their designs during the past two years, and last year Boeing was on the offensive against the U.S. Air Force customer after it selected the Airbus A330-tanker based design. Yet, last week both said they are open to a so-called "dual buy" of KC-135 replacements. This would call for parallel development of both platforms and a guaranteed minimum order. KC-X was originally proposed to procure 179 aircraft. Defense Secretary Robert Gates, however, is adamant that he wants a single winner, primarily to avoid paying for two developments, logistics and training efforts.
The Air Force's decision to award a $1.5-billion contract to the Northrop team was found by government auditors to be flawed after Boeing protested; this prompted the Pentagon's failed attempt last year to conduct a new duel between the companies. Gates halted the procurement in September and called for a "cooling off."
While both teams clearly took great pains to present a cool exterior in their media briefings here last week, neither was willing to commit to a protest-free process. In the last round, both contractors engaged in attempting to shape the request for proposals (RFP) that would drive metrics for the competition, and both at times threatened not to bid if the RFP wasn't favorable to their design.
The challenge is for the Pentagon to craft metrics to judge the attributes of dissimilar commercial platforms modified for military use.
Jim Albaugh, president of Boeing Integrated Defense Systems, unveiled the 7A7 concept during a briefing here last week. This leaves the door open to a large 777-200ER tanker or a smaller one derived from the 767 family. The "A" stands for "advanced," according to Dave Bowman, vice president of Boeing's tanker programs. The intent, he says, was to show the Air Force that the team would be flexible based on service needs. "We are not in a position to tell our customer what they want. . . . We are not RFP shaping at all." A new twist in Boeing's team was the appearance at the media briefing of Pat Shanahan, who oversees commercial aircraft programs; during the last competition, critics said Boeing's civil and military sectors weren't in lockstep on the tanker proposal. Shanahan, who is shepherding the delayed 787, says, "While the 787 may be the biggest program we have in commercial, tanker is equally important." It hasn't been decided whether a tanker would be built on the commercial line, with minor defense-specific modifications to follow, or if the commercial sector would simply hand over green aircraft to the military side. Despite poor performance on the 767-based tanker programs for Japan and Italy, Bowman points to lessons from efficiencies in the Navy's P-8 maritime patrol aircraft, a modified 737, as a model.
The challenge for Boeing will be to select the right platform and propose a plausible development plan based on a to-be-determined platform. The Northrop team, by contrast, is left to defend the merits of the A330-based option, which sits in the middle of the size spectrum of options.
Just how much development work has been done on these options is highly proprietary. The 777-based design could be delivered in "not exactly the same time [as a 767 design], but similar," Bowman says; company officials say they have not conducted wind tunnel tests of a 777 design. Boeing was previously docked for development risk because its design was based on components of various 767 aircraft wrapped into a single, new-designation aircraft.
Meanwhile, Boeing officials are eager to deliver to Italy its first 767-based tanker, which is late. "We have disappointed a very important customer," Bowman said.
Northrop Grumman's team, by contrast, is expected to stick with its A330-based proposal. Australia is the first customer, and the United Arab Emirates, Saudi Arabia and the U.K. each have placed orders. Northrop Grumman is not the prime contractor in those deals.
Ralph Crosby, CEO of EADS North America, is rejecting a notion to conduct a "low-price, technically acceptable" (LPTA) competition; this calls for both entrants to qualify for threshold requirements and then engage in a price shoot-out. The larger A330 would be at a disadvantage. This LPTA model was proposed by outgoing Pentagon acquisition czar John Young last year; it is unclear whether the strategy has gained traction with his replacement, Ashton Carter.
"That works for pencils and tablets [but] it is a flawed concept" for a military system, Crosby said during a June 13 briefing here.
"The issue is what credit does one get for capability above the threshold?" he said. It would "be both injurious to the defense acquisition process and a damn bad thing for the . . . armed services." Boeing officials support an LPTA competition, which could favor a smaller platform.
"We don't know what it means," says Paul Meyer, Northrop's vice president for mobility system, noting price could refer simply to development pricing, procurement, life cycle or some combination.
He says 90-100 aircraft are needed in a dual-buy scenario to justify construction of an Airbus final assembly facility in Mobile, Ala., for the A330 platforms and a nearby Northrop Grumman plant to add the mission systems. The Airbus facility could also produce A330-200Fs and, at some point, assemble A350XWBs.
EADS is continuing testing on the first A330-200-based tanker for Australia, and Northrop Grumman is also testing components of the design it previously proposed to USAF in a ground-based systems integration laboratory.
KC-135 photo credit: Boeing
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