And the Beat Goes On
Written by Tom Marlowe
MLF 2009 Volume: 3 Issue: 10 (November/December)
The U.S. Air Force, seeking to replace its aging KC-135 air tanker fleet, sought to lease 179 Boeing 767 aircraft earlier this decade. In 2003, the deal was scuttled over objections to the cost of the deal.
Out of the ashes of the failed lease negotiation, the Air Force drew up a request for proposals (RFP) for a new air tanker to be designated as the KC-X. Northrop Grumman and Boeing competed for the contract, and Northrop Grumman won in 2008.
But Boeing protested, and the Government Accountability Office (GAO) agreed, advising the Air Force to make a number of technical corrections and to recompete the KC-X contract. Secretary of Defense Robert Gates, facing the final months of the Bush administration, decided to scrap the procurement altogether and leave it to the Obama administration to straighten out.
As it turned out, President Barack Obama tapped Gates to stay onboard at Defense, so his office and the Air Force spent the last year revising the KC-X RFP, releasing a draft on September 25. Northrop Grumman and Boeing both submitted comments on the draft RFP by October 26. The companies anticipate a final RFP by the end of the year with a new decision on the program due in mid-2010.
The competition is so intense and the disagreements are so heated that a split-buy between the two companies would be the ideal way forward, Richard Aboulafia, vice president of analysis at Teal Group, told Military Logistics Forum.
Representative John Murtha (D-Pa.) has championed the split-buy concept, but Gates and the Obama administration are adamantly opposed to that solution, Aboulafia said. But one way or another, the Department of Defense must break the gridlock on the KC-X procurement and move forward.
“They have put it off for so many decades now that it’s time to get going. They need tankers. The existing fleet is just fine, but if you don’t start replacing them quickly, you are going to have to replace 500 or more aircraft all at once,” Aboulafia remarked. “With a normal base of procurement, by the time you get to the last aircraft, they will be 75 or 80 years old.”
It’s not hard to see why the Northrop Grumman offering won the competition the first time around, Aboulafia observed. Northrop Grumman teamed with the European Aeronautic Defense and Space Co. N.V. (EADS) to submit a design based on the Airbus A330, designated then as the KC-30 (now the KC-45).
“Just offering the additional transport capacity is a real draw. They appealed directly to the theater commanders and said, ‘Wouldn’t you like this additional lift?’ Also, the KC-30 is a newer aircraft, so that was appealing,” Aboulafia commented.
“But the protest was successful because it was clear that, for whatever reason, the Air Force did not take into account the lower cost of the 767 and it wasn’t comparing things properly,” he added. In the new round of competition, Boeing has deliberated submitting an aircraft based on its 777 airframe instead of the 767, but Aboulafia dismissed that as “theater for the politicians.” “It will be a 767 bid,” Aboulafia asserted. “The 777 would not be an appropriate response.
“The objective is to say, if you really do want the additional capability and capacity of the KC-30, why not even go a notch above that? They wouldn’t seem in a permanently disadvantaged position if the Air Force wanted to upgrade in capability and price,” he said.
KC-45
As Aboulafia said, Northrop Grumman won the first round of KC-X competition because its KC-45 aircraft offers additional capability over the legacy tanker fleet. When the first KC-X RFP was released, Northrop Grumman saw an opportunity to exercise a particular specialty for converting civilian aircraft to military aircraft, spokesman Randy Belote told MLF.
“Northrop Grumman was talking to EADS at the time. They were developing a tanker for the Australian Royal Air Force. We decided that because of our position in taking large platforms such as a 707 and converting it to Joint STARS and building the B-2 bomber and that sort of thing, we had a good background and core competency in taking commercial platforms and converting them to military platforms. So we felt this tanker effort was right in our sweet spot,” Belote commented.
The A330 is a newer aircraft, approximately in the middle of its lifespan, while the Boeing KC-767 is based on a “sunset” airplane that is at the end of its lifespan, Belote argued. As a platform that still maintains a robust user base, the KC-45 offers the Air Force a strong base for repairs and maintenance as well as the opportunity to innovate in the future.
“One of the advantages that we offer with our platform is that any changes that are made to it by commercial customers would find their way into the Air Force tanker. That’s an obvious benefit to the American taxpayer,” Belote stated. The KC-45 offers a large fuel capacity in its wings, an advanced digital cockpit with fly-by-wire controls, a fuselage cross-section maximized for passenger and cargo payloads, cargo holds that accommodate NATO standard 463L pallets, and bulk cargo containers, according to Northrop Grumman.
Indeed, the large fuel capacity was key to the selection of the aircraft the first time around. The KC-30, with its wingspan of about 198 feet, offered 250,000 pounds of fuel capability. The KC-767, with a wingspan of 156 feet, offered about 202,000 pounds. The KC-30 also could carry more people and pallets (up to 280 passengers versus 190 for the KC-767 and up to 32 pallets versus 19 for the KC-767).
The revised RFP places less emphasis on these technical attributes as well as disregarding risk and past performance, Belote protested, echoing complaints made in an October 29 letter to the Defense Department from Senator John McCain (R-Ariz.), who led the charge against the original Boeing lease deal.
In addition, the Air Force is seeking an 18-year fixed price contract for the new KC-X, Belote noted. It would be extremely difficult for either company to project total lifecycle costs for their aircraft that far into the future.
KC-7A7
In the original competition, Boeing offered its 767-based tanker to fulfill the Air Force requirement. But this time around, Boeing was reluctant to publicly commit to the same strategy at press time.
“We’re in the process of wrapping up the draft-RFP process and awaiting the final RFP,” Boeing spokesman William Barksdale told MLF.
“Any detailed discussion of our potential offering would be premature in this competitive environment as we prepare our proposal based on the actual requirements. While our competitor can talk about their airplane now because it’s the same as they’ve offered in the past, we’ll be taking a different path as the requirements will determine our proposal.”
The Boeing KC-7A7 family of tankers includes both the 767-based tanker and the 777-based tanker. Boeing might bid either tanker or offer a combination of the two, Barksdale insisted.
“If the Air Force wants an agile, flexible wide-body tanker that is well suited to operate in an austere, expeditionary environment, the 767-based tanker is a great choice. Based on mission scenarios, it can offload 20 percent more fuel, carry three times more cargo and transport five times more passengers than the KC-135,” Barksdale commented.
“If the Air Force values more fuel, cargo and passengers, the 777- based tanker offers superior capability. At virtually the same size as the A-330, it delivers 23 percent more fuel, 44 percent more cargo and 42 percent more passengers than the Airbus A330 in a more reliable and technologically advanced airframe,” he added.
The KC-777 would offer the possibility of carrying more than 350,000 pounds of fuel and offloading more than 220,000 pounds on a flight of 500 nautical miles. ♦