The Boeing Co. says it needs at least six months to submit a new tanker bid. And it may pull out of the tanker competition if the Pentagon insists on awarding the tanker contract by the end of the year.
Boeing's threat was sounded by Jim Albaugh, chief executive of Boeing's military business, in an interview with the Wall Street Journal.
Albaugh told the paper Thursday that Boeing has carefully studied the latest requirements and decided that its 767-200 tanker does not carry enough gas to meet the new requirements.
The Pentagon has said it expects to issue a final RFP (request for proposals) for a new Air Force tanker next week, perhaps as early as Monday.
"I think the option we would have if we were not given the six months, there is a really high likelihood that we would no-bid the program," Albaugh told the paper.
According to people familiar with the situation, the government is leaning toward adding another 15 days for Boeing and rival Northrop Grumman Corp. to respond to the latest request for proposals, giving the competitors a total of 60 days to submit a new bid. Because Boeing would have to figure out how to convert a larger airplane into a flying gas station, the Chicago aerospace company said it needs an additional four months to prepare a competitive proposal.
"This is an airplane that's going to be in the inventory 40 years," said Mr. Albaugh. "What we're asking for is an additional 4 months to have a meaningful competition."
Last week, I wrote the story below that focused on a possible bid by Boeing of its bigger 767-400 or even the 777:
By JAMES WALLACE
P-I REPORTER
After meeting for the first time Tuesday with Defense Department officials to go over a draft proposal that spells out the new requirements the Pentagon wants in an Air Force tanker, The Boeing Co. suggested it could decide to offer the military a bigger plane than its 767-200.
Boeing also said it wants "continuing dialogue" with the Defense Department as it seeks more information about how the tanker requirements have been changed.
Boeing is concerned because the Pentagon said last week it will give extra credit to the tanker that can offload more fuel, a development that would favor the bigger Airbus plane offered by Northrop Grumman for the $35 billion contract to supply the Air Force with 179 tankers.
After an initial meeting with officials at Wright-Patterson Air Force Base in Dayton, Ohio, Boeing said it is "exploring configuration options."
The company did not elaborate, but the implication is that it is at least studying the possibility of offering the Air Force a plane bigger than its 767-200 tanker. Its only options would appear to be either a tanker based on the 777, or one based on the 767-400, which is a much bigger version of the 767-200.
The 767-400 is about the same size as the Airbus A330- 200 offered by Northrop, which has already won the tanker competition once - until Boeing protested earlier this year and its protest was upheld by the Government Accountability Office. The Pentagon subsequently agreed to a partial rebidding of the competition.
"It is clear that the U.S.A.F. is placing value on more offload, so we will be exploring configuration options for this new RFP amendment," Dan Beck, chief spokesman for Boeing's military programs, told the Seattle P-I. RFP is a "request for proposal," the Pentagon term for the bid solicitation.
Beck's comments came after the P-I requested any information from Boeing about a tanker based on its 767-400. In 2006, Boeing provided a detailed media briefing about a 777 tanker, but the company has never publicly detailed a possible 767-400 tanker.
Boeing decided to offer the 767-200 to the Air Force because Boeing believed that the plane best met the service's requirements and that the Air Force did not want a bigger plane.
Instead, the Air Force picked the much bigger A330-200 offered by Northrop and its partner, the European Aeronautic Defense and Space Co., the parent of Airbus. The Air Force said bigger was better. Boeing complained that it was misled by the Air Force. The GAO agreed. In upholding Boeing's protest, the GAO found that the request for proposals issued by the Air Force made it clear that extra credit would not be given for additional fuel offload capability.
As it prepares the RFP to comply with the GAO findings, the Pentagon has made it clear that this time extra credit will indeed be given for exceeding the minimum requirements for fuel offload capability.
Boeing had once considered offering a tanker based on its popular 777, but decided the smaller 767-200 was better suited as a replacement for the aging KC-135s.
In briefing papers prepared in 2006, Boeing touted the "strategic capability" of a 777 tanker vs. the "operational flexibility" of the 767-200 tanker.
The 777 tanker would be based on Boeing's long-range 777-200LR, which entered airline service in 2006. It is the world's longest-range passenger plane. Boeing used the 777-200LR design as the basis for its 777 freighter, which is now in flight testing.
The 777 tanker would be 209 feet long with a wingspan of 212 feet, 7 inches, the same size as the 777-200LR. It would be able to carry far more fuel, cargo and passengers than either the 767-200 or the A330-200.
The A330-200 tanker is 192 feet long with a wingspan of nearly 198 feet. The 767-200 tanker is 159 feet long with a wingspan of 156 feet. The 767-400 is 201 feet, 4 inches long with a wingspan of 170 feet, 4 inches.
The fuel offload capability of the 777, according to Boeing, would be more than 220,000 pounds after flying 500 nautical miles. That's nearly 100,000 pounds more fuel than the 767-200 can offload at that range. The 777 tanker would be able to deliver 200 percent more fuel after flying 1,000 nautical miles than the current KC-135s, according to Boeing.
But there are two serious issues for Boeing should it offer the 777 as a tanker. Its 777 production line in Everett is flush with commercial orders. Where could it find production slots to build 179 tankers? On the other hand, the 767 commercial program is winding down because that plane is being replaced by the 787.
Also, Boeing faces a time problem in developing either the 777 or the 767-400 as tankers. It has already developed the 767-200 as a tanker for Italy and Japan, even though those planes are late.
Northrop repeatedly has made the case in ads touting its plane over Boeing's that the A330-200 tanker is already flying - and that the advanced 767-200 tanker for the Air Force is still a "paper" plane. The version of the 767-200 for the Air Force would be different from the eight tankers built for Italy and Japan.
Boeing said in 2006 that it would take about three years to modify the 777 into a tanker.
After its meeting Tuesday with the Defense Department, Boeing issued a brief statement that it wanted additional talks.
"The Boeing tanker team met with DoD officials to dis- cuss our comments on the draft RFP and gain further clarity in how the requirements and eval- uation criteria have changed since the initial competition. We hope that it was just the beginning of a continuing dialogue as we move toward a final RFP that prescribes the right aircraft and gives appropriate weight to all of the capabilities that will be re- quired for the evolving mission over the next several decades."
It was not clear if there will be additional talks.
"We feel the lines of communication remain open," said Beck, Boeing's tanker spokesman.
The Defense Department also met with Northrop, which described the meeting as "productive" and indicated that it expects the final RFP to be issued soon. The Pentagon has said it wants to issue the final tanker proposal by the middle of August, which is Friday.
"We had a frank and open dialogue and are confident that the final amendment will clearly outline the requirements that are expected to be met and the evaluation criteria that will be used to select the most capable tanker for the war fighter at the best value for the American taxpayer," Paul Meyer, Northrop's tanker vice president, said in a statement.
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