Boeing noses out competition for 35B tanker

[Eric Johnson]

The size and landing requirements EADS didn't meet last time that were "tailored" after the fact so they would be able to bid at all. (The basis for Boeing's appeal on that award).

They bid in phases so the gov't isn't on the hook for huge cancellation charges if they decide they don't want the aircraft for phases B and C.

But using this approach, the government is open to HUGE price increases for the B and C packages. They could have included the B and C packages as options on the base contract and agreed to a price now. With the history of this procurement, how will government avoid the same anguish two more times in the future and not get a completely different aircraft at a huge cost increase? Maybe the number in the "A" package was based on giving Boeing the contract be setting the number below the "break-even point" for EADS. I guess we'll have to wait for the 10 day bid examination period to play out.

Eric

[Granddaddy]

No large fixed wing tankers operate in "forward" areas. Never have & never will. Not unlike the gov requiremetns for large transports - the C-5A/B & the C-17. Winners of those bids were partially determined by their paper ability to land at "umimproved forward landing areas", yet never in reality has even one such landing taken place during any US military action. The US gov will not risk the loss of such a high valued asset in limited actions such as the middle east actions that have been seen/are being seen. Instead C-130 variants and some rotory wing tankers are used.

Point being, in such procurements, political strength determines the winner. That's why it takes 2, sometimes 3 rounds of bids to get the "right" winner. In the case of the tanker procurement, the N-G/EADS proposal was the clear dollars & perforement winner in previous rounds, so the evaluation is changed to include other considerations or at least re-weight the various considerations to get the "right" winner. This has been my personal experience in over 25 yrs of government related business working at Boeing, Lockheed & my own company. When it comes to new programs, once basic parameters of the technical spec are met, politics wins every time. Just as an aside, I'm guessing their is more than coincidence that N-G dropped out after they won the bomber competition. Not unlike Lockheed winning the JSF competition before their F-22 program was shutdown. It's the ying and the yang of gov procurement - politics at the highest corporate level in joint venture with the gov.

And one more personal aside, the USAF (that conducted the tanker procurement) is a lightweight compared to the US Army & the US Navy when it comes to the level of political influence of their new program procurements.

[Eric Johnson]

Here's an interesting article on the aftermath...

Eric
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http://blog.al.com/live/2011/03/eads...n_air_for.html

http://tinyurl.com/5t5wwxd

EADS is moving quickly to decide whether to challenge the U.S. Air Force’s decision to award its refueling tanker contract to rival Boeing Co.

Top EADS officials met Monday at the Pentagon for a 90-minute debriefing on the Air Force’s decision, then returned Tuesday for a second round of discussions about the award.

The company technically has a 10-day window to file a protest with the Government Accountability Office, but look for a decision before the end of the week.

It’s a tough call for EADS chairman Ralph Crosby and chief executive Sean O’Keefe. The two leaders praised the Air Force for its professionalism during the competition and vowed not to protest unless they saw “egregious” errors as part of the selection process.

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