US Air Force Tanker Bid/Contract

ricktk · Post by **ricktk** » 29 Feb 2008, 22:21

As reported by the Chicago Tribune:

Boeing loses $40B air refueling tanker bid to Northrup, EADS
Associated Press
3:42 PM CST, February 29, 2008
Northrop Grumman Corp. and the maker of Airbus planes won a multibillion-dollar Air Force contract to build 179 tankers used to refuel military aircraft mid-flight, a congressional staffer familiar with the award said Friday.

The staffer, who learned of the award from a Northrop Grumman employee, spoke on condition of anonymity.

The selection of Los Angeles-based Northrop Grumman and European Aeronautic Defence and Space Co. comes as a surprise to Wall Street and major blow to Boeing Co.

Chicago-based Boeing has been supplying refueling tankers to the Air Force for nearly 50 years and had been expected to win the deal.

The contract will be worth between $30 billion and $40 billion over 10 to 15 years. It is the first of three awards worth up to $100 billion over 30 years to replace the entire Air Force fleet of nearly 600 tankers.

SMOC · Post by **SMOC** » 29 Feb 2008, 22:24

Yay for outsourcing over 40% of the job...

Jumpshot724 · Post by **Jumpshot724** » 29 Feb 2008, 22:45

WOW, totally thought Boeing would win that one....

My dad works for NG as a program director, I'll have to ask him if he knows anyone that was working on their bid.

Bye bye -135s lol

SMOC · Post by **SMOC** » 29 Feb 2008, 23:29

That's because Boeing should have won the contract. Past performance should have been weighted heavily. Not to mention some of the reported performance features of the Airbus hasn't even been tested yet. I think a few years down the road they're going to regret this decision. I hope I'm wrong though.

Post by **Firebird** » 01 Mar 2008, 08:42

As I read the situation the Government is still really p*ssed at Boeing. Taking into account that the total contract is to be split into 3 parts there is nothing to say that Boeing won't get at least one of the other two contracts.

My guess is that by the time the next one comes around there will be much flag waving and there will be rejoicing for Boeing.

sprocky · Post by **sprocky** » 01 Mar 2008, 09:46

Allow me to share my (unfortunatly personal) experiences with customers:

If you provide them many years with your technology there may happen things that do not satisfy both sides. The provider may think one time he wont lose this customer because he will have to change too much (trainings, tools, spare parts, etc.). Therefore he may charge higher service and spare part costs. A customer that really wants to save money in the future will decide for an opponent to bring the "usual" supplier back to ground - a shot across the bows (received that expression from a dictionary - hope it means the same as in german

).

Thats why I totally agree with Firebird. I am sure Boeing will receive the next contract.

Cowboymarine1593 · Post by **Cowboymarine1593** » 01 Mar 2008, 16:12

im surprised that it happened this way, the test base is fairly small so we will have to redo the ramp here at grand forks, we hae the test base for it,

Rotten Ralph · Post by **Rotten Ralph** » 01 Mar 2008, 19:00

On one hand it`s good that the underdog has won for a change, yet on the other hand, governments go for the cheapest crap available to save money in this budget starved world.
I must say, I prefer the boeing aircraft for their quality etc, but the A330 is a newer aircraft and more technological and perhaps better in that sense.
I think the Australians use the 330 & the Brits are getting it.
I am sure I saw that Boeing were going to put a 777 airframe in for the compitition. Perhaps because of the increased capacity of that aircraft they might have won the compitition?

Post by **Firebird** » 01 Mar 2008, 20:12

If I remember the specs were for a 767 size aircraft. When Airbus put in the A330 tender, despite it being larger and more capable than was asked for, the AF accepted it. Boeing did stammer that if a larger more capable tanker was wanted then the AF should have said so and then they would have submitted a bid based on the 777.

There was a round for revised bids and Boeing did consider using the 777, but decided against it. They said as all the work up had been done on the 767 and stuck with it.

Now here is where I start speculating. I would say that part of their decision was based on that. I also think that they didn't believe that would give the contract to a foreign manufacturer that tendered something that wasn't asked for, plus I also think that they couldn't see other nations buying 777 tankers and could see the market for 767 tankers undermined by them not even submitting a bid around the 767.

Of course I could be entirely wrong.

Cowboymarine1593 · Post by **Cowboymarine1593** » 01 Mar 2008, 20:53

boeing does have 777 tanker designed to replace the kc 10 when it comes time for that, they did preview the tanker on their integrated defence part of the site,

SMOC · Post by **SMOC** » 01 Mar 2008, 22:11

Steve, I find it disconcerting that Boeing failed to push through with the 777 as well. If bigger is better(which it seems the USAF selected), why not give them what they kind of, maybe, settled for wanting?

No one will be able to convince me that this didn't happen because of the failed lease with Boeing. Had they selected the Boeing again, people would have been up in arms about wasting money in between then and now as well as no one getting a fair shake regarding government bid proposals. We'll see if in 50 years the KC-45A is still hauling gas like the KC-135 has been able.

This leads me to believe that the HH-47 won't get selected again either. It will probably end up going to UH-101... you know, why dance with the one that brung ya?

Post by **Firebird** » 01 Mar 2008, 23:58

Chris, as I said earlier I have no doubt about the main reason that it went to Airbus, or EADS if you want to be technically correct.
I just think that Boeing didn't believe that there would be that much of a grudge against them, when up against the company that has caused the biggest row between the US and the EC in economic history.

A really bizarre situation from start to finish. Somebody else may have the exact data but I seem to remember that Airbus's sales pitch was something along the lines if you buy the A330 then you will need less transport aircraft for wing deployments as we can carry more cargo and troops as well as being able to refuel at the same time.
Boeing seems to have risked losing the deal, by not matching capabilities, to save possible future sales of the KC-767. Somebody should definitely lose there job if that is the case.

GZR_Sactargets · Post by **GZR_Sactargets** » 05 Mar 2008, 16:55

From AF Daily Report 4 March 08:

Shocked" in Washington, "Mad" in Kansas: Lawmakers who supported Boeing in the great tanker contest met with Air Force officials to discuss the award to the rival Northrop Grumman/EADS team and came away still wanting answers to "a lot of tough questions," said Sen. Patty Murray (D-Wash.) March 4. She called the decision "devastating news for Boeing, for American workers, and for America's men and women in uniform." About the meeting with USAF Monday, Sen. Sam Brownback of Kansas said: "I'm mad. We all came out of our meeting ... with more questions than answers, and the answers we got lead to more questions." Sen. Pat Roberts (R-Kan.) also wants more details, saying: "It will take Airbus longer to start up an assembly line than Boeing. And, it will take them longer to produce a viable plane. ... If this decision holds, it will be at the cost of American jobs and American dollars, if not our national security." Sen. Maria Cantwell (D-Wash.) asserted that USAF is "taking a major step backwards," considering the amount of aviation fuel it uses, because the "Boeing 767 burns 24 percent less fuel and would have saved taxpayers approximately $10 billion over the life of the tanker." Murray, Brownback, Roberts, and Cantwell joined with Rep. Norm Dicks (D-Wash.), Rep. Todd Tiahrt (R-Kan.), Rep. Adam Smith (D-Wash.), Rick Larsen (D-Wash.), and Rep. Cathy McMorris Rodgers (R-Wash.) in a letter to Defense Secretary Robert Gates and Air Force Secretary Michael Wynne asking their assistance in speeding USAF's debrief to Boeing. (see above) They wrote, "This report needs to be debriefed so the bidders, and in turn Congress and the public, can fully understand the rationale for the decision." In a speech on the Senate floor, Murray left no doubt that she doesn't think the Air Force can answer the "tough questions," saying "there seems to be a real disconnect here," considering the US is "hemorrhaging manufacturing jobs to foreign countries already" and a "Boeing 767 tanker would have helped stabilize and strengthen the American aerospace industry."

Interesting that Northrup-Grumman and Boeing are involved together on some aircraft contracts. I guess it shows the unique nature of each contract. Different teams and management for various bids. I was a part of the SAC evaluations of two proposals, the B-1 and the B-2. Until hardware is flying, you pretty much rely on what the contractor says it will do. Makes the old competitive flyoff appealing. But that is also very expensive.

US Air Force Tanker Bid/Contract

US Air Force Tanker Bid/Contract

EADS Tanker