U.S. Air Force KC-X Aerial Refueling Tanker Program Controversy: DefRev Opinion

By David Crane
defrev at gmail dot com

DefenseReview has been contacted by a number of journalists (reporters and writers) to get our take on the Northrop Grumman/EADS (Airbus) aerial refueling tanker aircraft contract award and subsequent Boeing protest situation. This is a big-deal situation, since our current fleet of KC-135 tanker aircraft are getting quite long in the tooth, and even the initial contract award is quite large: $35B (Billion) to $40 (depending on whose numbers you use) for 175 replacement aircraft. Ultimately, we could be talking about up to 500 aircraft for a total price tag of approx. $100 billion ($100B). In reality, of course, if history tells us anything, the actual pricetag will most likely be more than expected, so $100B is most likely a conservative estimate.

Well, here it is (our opinion): the U.S. Airforce absolutely made the right decision in choosing the EADS/Northrop-developed KC-45A tanker aircraft (a.k.a. KC-45, a modified Airbus A330 commercial aircraft) over the Boeing KC-767 Global Tanker Aircraft for the KC-X program. The concesus among aerospace and defense industry insiders with whom Defense Review has spoken is that…

Boeing lost because they were "arrogant" and "lazy", had an overall feeling of entitlement, and thought they had the contract in the bag. So, EADS/Northrop Grumman deserved to win, and Boeing deserved to lose. Sue Payton, chief of Air Force procurement, put it succinctly: "Northrop Grumman brought their A-game."

Not surprisingly, Boeing protested the Air Forces decision, and some U.S. lawmakers, i.e. Senators and Congressman, had veritable kanipshin fits, claiming that the Air Force’s decision was unfair, and that it would result in the loss of American jobs. One of the bases of Boeing’s protest is the cost issue. The Air Force contended that the EADS/Northrop team offered a better product at a lower lifetime cost. However, the Congressional Government Accountability Office (GAO) sustained Boeing’s protest, determining that the Boeing’s modified 767 would actually cost slightly less over its lifetime.

"But the real problem on the Boeing side of the argument is that no one protested Airbus’ role as one of two contenders for the contract when everyone thought Boeing had the deal sewn up. In other words, they liked the appearance of competition, but not its reality," writes Mark Thompson for Time Magazine. And that’s exactly it. Thompson’s hit it right on the head. Why are U.S. lawmakers so outraged? Why weren’t they vocal about EADS/Airbus being a contender in the race from the outset? In a true competition, the playing field should be level and the best product should win, right? So, they should have known that EADS/Northrop could very well win it.

The truth is, they didn’t know that EADS/Northrop could actually win it, because EADS/Northrop wasn’t supposed to win it, because Boeing was supposed to win it. Or something to that effect.

Unfortunately, someone forgot to notify the U.S. Air Force about the plan and the fix being in. So, the Air Force did a crazy thing–they chose the best/superior product. According to the Air Force, the KC-45A is just a better aircraft for the mission. DefenseReview agrees.

Related Articles, Links and Papers:

KC-X: GAO Sustains Boeing Protest (Defense Industry Daily)

The USAF’s KC-X Aerial Tanker RFP. (Defense Industry Daily)

KC-45: America’s New Tanker

A Nice Big Cup (Defense Technology International a.k.a. Dti)

Air Force Snub Good for Boeing (Time Magazine)

EADS/Northrop trumps Boeing in Air Force tanker competition (The Seattle Times)

GAO Statement Regarding the Bid Protest Decision Resolving the Aerial Refueling Tanker Protest by The Boeing Company (GAO PDF Document)

KC-X: The Next Mobility Platform: The Need for a Flexible Tanker (PBS PDF Document)

Air Force Refueling: The KC-X Aircraft Acquisition Program (CRS Report for Congress PDF Document)