The two bidders, Boeing Co. and Northrop Grumman Corp., have a week to discuss the draft with defense officials before the final request is released later this month. The companies will then have 45 days to submit proposals with the government targeting a new contract award before the end of the year.
Key to Northrop, which won the contract in February before the Government Accountability Office intervened, is the military will now give greater credit towards a larger aircraft with greater offload capacity for fuel and cargo. See related story.
Further, the new draft proposal maintains the same timeline, with the Air Force requiring the first tankers to be delivered in 2009. That benefits Northrop as it already has two KC-30 platform flying, while Boeing isn't likely to get its prototype -- the KC-767AT to be built from elements of several different platforms -- into the air before the end of next year, said Scott Hamilton with Leehman Co., which provides research to the aerospace industry.
"Boeing's track record with the KC-767s for Japan and Italy doesn't inspire confidence, and these are straight-forward conversions of the 767-200ER," Hamilton said wrote his blog.
The first of Japan's 767s were delivered in February after a more than two-year delay. Italy expects its first deliveries later this year.
The Air Force has said it prefers the Northrop's offer of a converted Airbus A330 because of its larger size, and the new proposal already has Boeing supporters howling over what they said is bias towards in its rival's favor.
"After an initial review of the revised [proposal], I have questions about the increased weight given to fuel offload capability," said U.S. Representative Rick Larsen (D-Wash.). "I also have questions about the lack of consideration given to our industrial base."
Though Northrop's partner Airbus is a subsidiary of European Aeronautic Defence & Space Co. , its offer will be assembled in Mobile, Ala. Chicago-based Boeing's offer would be built in Everett, Wash. But experts have argued that Boeing's KC-767 will employ more Americans than Northrop's KC-30.
Possibly helping Boeing is the proposals; revised definition of lifecycle to 40 years from 25 years. At 25 years, the two offers have similar costs, but the 767 gains advantage further out.
The $35 billion contract was awarded to Northrop in February after it was revoked from Boeing in 2004 during a procurement scandal that resulted in the imprisonment of Boeing and Air Force officials. Boeing protested the award, and the GAO eventually backed its claims that the military's bidding process was sloppy, particularly in the way it communicated what it wanted.
The Air Force reopened the contract, taking management for the procurement of the aircraft away from the Air Force and giving it to Secretary of Defense. The secretary's office said it is now determined to award the contract before the end of the year, saying it's desperate to replace the Eisenhower-era Stratotankers currently in its fleet.
"We are addressing [the irregularities raised by the GAO] in a very measured and serious way to ensure that we, in fact, can execute this procurement in a manner that's fair to both parties and is in the best interests of what the warfighters and the taxpayers," said Shay Assad, the Defense Department's director of procurement and acquisitions policy.
Boeing's original offer of a 767 may now be upped to a larger model, probably a 777. However, experts have said that the 777 would come with a larger price tag due to its popularity among commercial aircraft operators.
The stakes are high. The Air Force has said it isn't interested in splitting the contract between the rivals because it will be cheaper in the long run to have the tanker built by just one manufacturer. Though the current contract is just for 170 planes, the military will eventually want to replace more than 500 Stratotankers, used for hauling cargo and refueling other aircraft in flight. |
