irtuskwhat a friggin disappointment
irtuskWhat Vexes — And Maybe Frightens — the Tanker Triumvirate
the potential difficulties the AF has with getting a good price out of Boeing if there is no competition
irtuskyou can watch the live press conference now
irtusk(click the ‘Download ZIP file’ button)
irtuskhttp://blog.al.com/live/2010/02/local_officials_disappointed_b.html
As they made the rounds on Capitol Hill today, Mobile-area officials voiced frustration and anger at the U.S. Air Force’s final bid package for an aerial refueling tanker.
“I think it’s a sham, I think the fix is in,” Mobile County Commissioner Mike Dean said by phone. Also disappointed was Mobile City Councilwoman Connie Hudson, who said she understood that the final package — formally known as a “request for proposals” — contained only minor tweaks over an earlier draft that Northrop Grumman Corp. had said was skewed in favor of rival Boeing Co.
“For all intents and purposes, there were no changes,” she said. If Northrop’s side wins the coveted contract, it plans to employ up to 1,500 people assembling the planes in Mobile.
The two were in the nation’s capital by coincidence on the same day that the tanker RFP was released. Hudson said they had planned to come two weeks ago, but were delayed by snow and the President’s Day holiday break. Now that they’ve arrived, Dean said they are focused on lobbying lawmakers and their staffs for a so-called “split buy” that would divide the tanker work between Boeing and Northrop. Pentagon officials, led by Defense Secretary Robert Gates, have repeatedly rejected that idea as too expensive and cumbersome.
But Dean, a Republican, said it could create 100,000 jobs in tough economic times. “The Democrats are just letting a golden opportunity go by,” he said. Joining Hudson and Dean on the trip were Bay Haas, former executive director of the Mobile Airport Authority, and county employee Peter Albrecht. The four arrived Tuesday and — weather permitting — plan to leave Thursday, Hudson said.
irtuskhttp://blog.al.com/live/2010/02/shelby_blasts_air_force_tanker.html
U.S. Sen. Richard Shelby, R-Tuscaloosa, sharply criticized the Pentagon’s new bidding guidelines for the Air Force tanker competition, saying that contest is tilted toward Boeing Co.
. . .
Shelby issued the following statement after today’s briefing:
“The final RFP discredits the integrity of the entire process. Additional capabilities that would better protect the lives of our men and women in uniform were neglected in the draft RFP. Substantial changes that bring those factors into consideration in the final RFP are necessary to have a full and transparent competition, yet the Air Force did not make a single revision to the key warfighter requirements. The RFP clearly favors a smaller, less capable airframe and I am concerned the Department may not get two competitive bids in this process. It is an illusion of a fair competition in which the warfighter and the taxpayer lose.”
irtuskhttp://www.flightglobal.com/blogs/the-dewline/2010/02/kc-x-tanker-rfp-live-blog.html
2:06: I interviewed Jean Chamberlin, Boeing’s new KC-7A7 program manager, in Orlando last week. For what it’s worth, Chamberlin predicted a very tight race with Northrop. “It will be a tough competition, and I do see it as neck and neck,” she told me. So tough, in fact, that Boeing is re-evaluating how much information it can reveal before contract award. “This is a really tough competition,” she says. “I’m going to have a hard time thinking about how much I’ll disclose now.”
irtuskPentagon’s Tanker Plan May Not Satisfy Northrop, Lawmakers Say
“I don’t think it looks promising for Northrop,” U.S. Representative Mike Rogers said
“We structured this request to be fair to both sides,” . . . Lynn said.
Senator Jeff Sessions, a Republican from Alabama, disagreed with that assessment.
. . . “I think this is a disappointment. It’s not a fair RFP.”
The next bid request for the competition, released under President Barack Obama’s administration, “was a stunning change from the last competition, which the Northrop team won,” said Sessions, the Alabama Republican.
irtuskHill Reacts To Tanker RFP
http://www.dodbuzz.com/2010/02/24/hill-reacts-to-tanker-rfp/
[Dicks] said the RFP is “a fundamental plus for the smaller aircraft.”
. . .
“I will say hallelujah,” Dicks said when asked his opinion on Northrop/EADS threats to drop out of the bid because they believe the RFP is weighted heavily in favor of rival Boeing. “Everybody would like to see competition,” he quickly added.
:rolleyes:
“I think this new RFP has a 40 year lifecycle cost assumption. I like that!” He also likes the proposed concept of the Air Force adding more planes to their annual buy. Dicks added that he thinks Congress can quickly move the program forward.
An emailed statement from House Armed Services Committee chair Rep. Ike Skelton (D-Mo.) reads:
“The Air Force has made a strong case for recapitalizing our nation’s aging airborne tanker inventory, and I support this requirement. The tanker replacement process has gone on for eight years, and we need to move forward this year to award a contract to provide our service members with the tools that they need to succeed in today’s conflicts. DOD has worked diligently to set the stage for a fair and open competition for the KC-X Tanker contract, and I hope the process moves quickly to provide the best tanker for our Air Force.”
Washington Senator Patty Murray (D) issued the following statement:
“I’m glad that we finally have an RFP so we can at long last move forward with a competition to get these critical aircraft into the hands of our men and women in uniform. I will be looking over the details of this final RFP to ensure that it is fair and transparent and that it provides an even playing field for our state’s workers.
Given a fair shot, Washington state’s workers will bring home this contract. We have the skills, the technology, and the experience of having built the only combat-ready tanker to prove it. Our workers have done it before and I know they’re ready to do it again. With today’s RFP we now have the process in place that will allow our workers to deliver for our economy, military, and country.”
irtuskhttp://www.flightglobal.com/blogs/the-dewline/2010/02/kc-x-tanker-rfp-live-blog.html
Northrop is also concerned that the requirements tilt the US Air Force’s selection towards a smaller aircraft. The company has even opined the existing KC-135R would beat both the 767 and A330 under the evaluation criteria proposed in the draft RFP released on September 25
irtuskFinal Tanker RfP Keeps Evaluation Plans, Features Only ‘Technical’ Adjustments
The final RfP will keep in place an evaluation framework under which all proposals will be judged against 372 “mandatory requirements” set by U.S. Air Mobility Command. As the Air Force determines if the proposed planes can do those things “on day one,” the briefing states, it also will run other analyses on issues such as the planes’ fuel burn rates and all needed military construction to accommodate the planes.
At the end of this phase, the Air Force will calculate a “total estimated price” for each entry. If the costs are within 1 percent of one another, both aircraft would remain in the running and enter a second stage during which the planes would be judged on whether they can perform 93 nonmandatory requirements.
Some critics, including Northrop Grumman-EADS and defense analysts, have said the evaluation structure essentially sets up a cost shootout because, as the DoD briefing acknowledges, it is anticipated that both the KC-767 and the A330 can meet the 372 mandatory specs.
. . . .
Following the session with the Pentagon officials, Rep. Todd Tiahrt, R-Kan., told reporters he thinks “the Alabama delegation won’t be happy.”
irtuskTanker RFP … Not Quite Fixed Price
Early data from the press briefings to Congress on the KC-X final RFP today show that the development contract will be fixed price, incentive fee.
This is a shift away from the rigid fixed price plan issued last September by the Pentagon. Both contractors took issue with that plan because of risk.
Also, it appears that DoD will be willing to split 60/40 any “risk” that comes along. This could mean that if a delay ensues or if requirements change, the added cost would be split thusly between the government and the winning bidder.
Lots 1-2 would be fixed price, with Lots 3-13 adjusted for inflation.
What apparently hasn’t changed is the need to come within 1% of cost from the two bidders to spark a consideration of additional features of the two tankers. This was a problem for Northrop.
irtuskares has a more convenient pdf of the slides
http://aviationweek.typepad.com/files/27391962-tanker-rfp-final-power-point.pdf
Tanker Tea Leaves: Sen. Murray Seems Happy
From what I can tell, Sen. Patty Murray (D-Wash.), an avowed Boeing proponent, seems pleased, per her statement below:
“I’m glad that we finally have an RFP so we can at long last move forward with a competition to get these critical aircraft into the hands of our men and women in uniform. I will be looking over the details of this final RFP to ensure that it is fair and transparent and that it provides an even playing field for our state’s workers. “Given a fair shot, Washington state’s workers will bring home this contract. We have the skills, the technology, and the experience of having built the only combat-ready tanker to prove it. Our workers have done it before and I know they’re ready to do it again. With today’s RFP we now have the process in place that will allow our workers to deliver for our economy, military, and country.
“Our state and nation need this contract now more than ever. The bottom line is that the tanker brings jobs. Not only on the assembly lines in Everett, but also to aerospace suppliers and businesses large and small across our state and nation. Especially now, America’s tanker should be built by America’s workers. I won’t give an inch in working to ensure this competition is fair for our state, our workers, and our country’s needs.”
irtuskUPDATE 1-Pentagon sets new tanker rules with slight changes
http://www.reuters.com/article/idCNN2418286020100224?rpc=44
He said the Pentagon is sticking to a “best value” approach that weighs both price and non-price factors, and even a bidder with a higher price could potentially win.
The three officials are due to answer questions at a 4 p.m. EST (2100 GMT) news conference at the Pentagon.
Senator John McCain, whose investigation of an earlier $23.5 billion sole-source tanker deal with Boeing ultimately killed that deal, said he would review information provided at the briefing.
“We asked questions in letters and got responses, but we haven’t had a chance yet to digest all of it,” McCain told Reuters as he left the briefing.
Asked if he were confident that the final terms for the competition would guarantee a level playing field for both parties, he said: “Put me down as cautious.”
Representative Norm Dicks, a Washington state Democrat and strong supporter of the Boeing bid, said he sees only minimal changes in the final request for proposals.
“They’re trying to make it transparent. They hope both companies will bid. We’ll just have to wait and see,” Dicks told reporters after the briefing.
He said the Pentagon made some adjustments to better account for inflation, answering concerns raised by both companies, and removed one mandatory requirement, bringing the total to 372.
“I think the changes here have been rather minimal,” he said.
A briefing document, obtained by Reuters, included the following key points:
* The final terms included 230 “important changes,” but retained the overall structure of requirements.
* Lynn said the tanker competition would be a “best value” effort, weighing price and non-price factors
* The Pentagon sees no conflict of interest due to Northrop’s work for the Air Force on a computer refueling model that is being used in the competition.
* The tanker contract will be a fixed-price incentive for development, with a 60/40 ratio of shared risk between the government and the winning bidder.
* The Air Force sticks to a 1 percent gate as trigger for consideration of non-mandatory requirements.
* Carter says tanker terms include changes in contract pricing, but the Pentagon is not moving back to a cost-plus contract.
* The first two production lots of tankers will be on a firm fixed price contract, while lots 3-13 will include provisions to adjust for inflation.
* The ongoing World Trade Organization disputes over aircraft subsidies are exempted, as in the draft request for proposals, but the Air Force is including a “hold harmless” clause to prevent any effect of future rulings on pricing. (Reporting by Andrea Shalal-Esa, editing by Dave Zimmerman and Gerald E. McCormick)
irtuskBill Lynn, Ash Carter, & SECAF Donley to brief reporters on KC-X RFP at 4pm at Pentagon. Watch at http://www.pentagon.mil
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