The Continuing Saga of the Air Force Tanker Replacement Contract

[joel hoffman]

Boeing won the contract in 2011 but the USAF and the citizens and taxpayers still don’t have compliant Tankers years later. Of course, the condition of the current fleet of KC-135 Tankers was touted as a major reason for the justification and direction of the KC-X procurement. Now we find that the KC-135 fleet service life can be extended 2040 or so. Recently the USAF said that the new KC-46 tankers will first replace the KC-10 fleet...

Who knows, maybe the Boeing Tankers won’t be fully delivered until 2040...

https://www.pogo.org/analysis/2020/06/air-forces-tanker-aircraft-continues-to-struggle/

Note that because the Air Force wants to operate the boom remotely from the middle of the plane, they have discovered that the lack of precision involved and due to the design of the boom - may endanger several types of the existing receiving aircraft Fleets! SHEESH!

Here’s a thread from 2011:  

Bob and Vern were on-Mark about a low ball buy-in!

Here’s another interesting article: 
https://www.pogo.org/analysis/2019/03/fill-er-up-why-its-taken-the-pentagon-nearly-two-decades-to-buy-a-new-aerial-tanker/

Meanwhile, EADS/Airbus continues to build and deliver its Tanker- that was operational back in 2011 -  to other Air Forces, has built a new commercial airliner plant in the USA, has been producing and delivering airliners for several years here and just expanded its operations by building another new plant next door for a different aircraft line.

It still infuriates me that the USAF or DoD bamboozled the public when they announced that the final competition for the Tanker replacement contract was going to be Fixed-Price based upon price competitions to be awarded to the lowest price offer## which would meet the technical requirements (stressed cost or price in the “best value” selection decision). The winning contractor has admitted under pricing their offer*.

It is a fixed-price incentive contract, which was faaaar from what they apparently wanted the public to believe.

Of course they said a lot of things, like justifying the urgency based upon the need to replace the aging KC-135 fleet.

Now they are going to first replace the KC-10 fleet with the new Tanker and extend the service life of much of the current KC-135 fleet for at least another 20 years*. Maybe it will take that long for the contractor to perfect and provide the envisioned number of new tankers...
*See: http://www.fi-aeroweb.com/Defense/KC-135-Stratotanker.html

*See: https://fas.org/sgp/crs/weapons/RL34398.pdf

EDIT: I still chuckle and wonder what would have happened if the proposal of a surprise third “bidder”, a consortium of US Aerospace and Ukrainian aircraft manufacturer Antonov,  wouldn’t have been rejected (for being five minutes late)** 

**https://en.m.wikipedia.org/wiki/KC-X

##https://www.airforcemag.com/article/0611tanker/  excerpt:

“The rules [for the final competition], [Air Force Secretary Michael B.] Donley noted, called on each offeror to meet a threshold of 372 mandatory requirements. If both did so—and if the price difference between the bids on those basic needs was less than one percent—then, and only then, would USAF consider a series of tiebreaker considerations.

Also evaluated were life cycle costs over a 40-year period, to include the anticipated price of fuel, and the costs of modifying runways and hangars to accommodate the aircraft.

Both Boeing and EADS were determined to have met the threshold 372 requirements. Because Boeing’s price was more than one percent lower than EADS,’ the “nonmandatory capabilities,” or tiebreakers, “were not used in determining the outcome,” Donley said.”

[here_2_help]

Maybe it would have been cheaper, after all, to have leased the planes?

Quote

The U.S. Air Force on Monday said it has more than 150 experts scrutinizing rival bids in a $40 billion aerial refueling tanker competition to ensure that every step of the process is done “by the book.” ... “The program office is being extra cautious in ensuring that each step of the source selection process is thoroughly documented,” said Joe Leising, contracts chief for the 653rd Aeronautical Systems Squadron at Wright-Patterson Air Force Base in Ohio, where the evaluation team is sequestered.

Link to quote.

Here's more:

Quote

Terry Kasten, director of the 653rd Aeronautical Systems Squadron, said in a statement that his team was keen to avoid any problems with the tanker competition. "When the dust settles, we'll have spent many tens of thousands of man-hours scrubbing the content of these proposals, conducting a legal review and preparing summary information for both an independent advisory council assessment and ... a source selection authority decision," he said.

Kasten said senior Air Force legal and contracting advisers were standing by to "answer questions, capture lessons from other programs, including the recent experience with the CSAR-X (helicopter) source selection, and ensure we do everything by the book."

...

Lt. Gen. Jack Hudson, the Air Force Program Executive Officer for Aircraft at Wright-Patterson air base, said senior Pentagon officials had carefully monitored the tanker program. "Our leadership is very aware of our efforts and they have ensured we proceed in a deliberate and transparent manner, every step of the way, so that at the end of the day we have a program in which we all have high confidence that we can execute successfully," he said.

150 experts to support the analysis. Legal reviews. Independent advisory council. Leadership support. All that for what was, in effect, a giant LPTA process that ended up with an aircraft that is years behind schedule, struggling with technical problems, and which has cost Boeing shareholders BILLIONS of dollars in cost overruns.

Great job, team.

[joel hoffman]

Yep. Shoulda selected EADs. But EADS didn’t know how to play the low ball buy-in  “game” on the first four planes. I don’t know but suspect that they probably included the cost of building the production plant in their proposal - maybe not but...

Oh-not to mention Boeing closing the Wichita, Kansas plant within a year after contract award. I wonder how the Kansas Congressional Delegation felt after they had jumped on board during the acquisition process to tout Boeing and disparage both EADS and the State of Alabama with the expectation that Boeing's tankers were going to be "militarized" in Witchita.

EADS rewarded the State of Alabama for its support in the Tanker competition by building a new plant in Mobile at Brookley Field (where the Tanker Plant would have been built) and now doubling it to provide another production line. 

[joel hoffman]

On 6/17/2020 at 4:23 PM, here_2_help said:

Maybe it would have been cheaper, after all, to have leased the planes?

Link to quote.

Here's more:

150 experts to support the analysis. Legal reviews. Independent advisory council. Leadership support. All that for what was, in effect, a giant LPTA process that ended up with an aircraft that is years behind schedule, struggling with technical problems, and which has cost Boeing shareholders BILLIONS of dollars in cost overruns.

Great job, team.

According to the article in my first link, Boeing intends to make up the losses in the production and sustainment phases:

“Boeing’s expenses during the early phases of this program will be made up during production of the KC-46 fleet and through costly sustainment contracts because the company is engaging in one of the most pernicious practices of the military-industrial-congressional complex: Boeing is deliberately creating a weapons program that only its employees can support in order to secure long-term, noncompetitive sustainment contracts.”

Of course, that is a long term payback. With the pace of the program, the current stockholders may well be long retired or dead  before then!

It’s a Club, folks... There is a slew of former and retired Air Force Officers including a bunch of USAF Academy grads (my Alma Mater) employed by  the Aerospace industry.