By Marina Malenic
The Defense Department has terminated a $35 billion competition for a contract to produce the next generation Air Force refueling aircraft, leaving the next administration to grapple with what has become a highly contested and politically charged contest between Boeing [BA] and Northrop Grumman [NOC].
In a statement released yesterday morning, Defense Secretary Robert Gates said he had “determined that the solicitation and award cannot be accomplished by January,” as the Pentagon officially had announced was their plan last month (Defense Daily, Aug. 7).
“Over the past seven years the process has become enormously complex and emotional–in no small part because of mistakes and missteps along the way by the Department of Defense,” Gates said. “It is my judgment that in the time remaining to us, we can no longer complete a competition that would be viewed as fair and objective in this highly charged environment.”
Gates said a “cooling off” period would give the next administration an opportunity to start fresh with a new KC-X tanker acquisition strategy.
He also said the Pentagon would request funds in its fiscal year 2009 and subsequent budgets to maintain the current KC-135 fleet “at high-mission capable rates.”
The terminated effort was the Pentagon’s second attempt to award a tanker fleet replacement contract. The first award to Northrop Grumman and industry partner European Aeronautic Defense and Space Co. (EADS) was challenged by losing bidder Boeing in March. Congressional auditors sustained the protest, finding several irregularities that could have affected the outcome of the competition (Defense Daily, June 19).
Defense officials then put forth an ambitious plan to issue a revised final request for proposals (RFP) by late August and a contract early in the new year. A draft RFP was released last month, with the Pentagon re-emphasizing its intent to give “positive consideration” for the ability to offload fuel in excess of the Air Force’s threshold requirement when weighing industry bids (Defense Daily, Aug. 7).
Boeing officials then asked for a six-month extension of the deadline for submitting proposals. They argued that what the Pentagon deemed a “clarification” of the Air Force’s fueling needs in the new draft was, in effect, a request for a larger aircraft.
Northrop Grumman was competing a modification of its A330 aircraft, which has greater fuel capacity than Boeing’s offering, the KC-767.
The delay is a victory of sorts for Boeing. Company officials had threatened to drop out of the contest unless they were given more time to potentially submit a larger airframe for consideration. Boeing said in a statement released yesterday afternoon that the delay would provide “the appropriate time for this important and complex procurement to be conducted in a thorough and open competition.”
Northrop Grumman expressed disappointment.
“With this delay, it is conceivable that our warfighters will be forced to fly tankers as old as 80 years of age,” company spokesman Randy Belote said in a statement following the Pentagon’s decision.
Replacement of the Eisenhower-era fleet has long been a top Air Force priority. However, the service released a statement backing the secretary’s move to end the competition.
“The Air Force supports Secretary Gates’ decision to withdraw the [request for proposals] and give an incoming administration a clean start,” Air Force spokeswoman Lt. Col. Karen Platt said via email yesterday afternoon.