By Emelie Rutherford
The Air Force’s top officer said yesterday neither company competing for the aerial-refueling tanker contract received insight into the other’s price proposal or any advantage after the service accidentally disclosed sensitive data to the two rivals.
Air Force Chief of Staff Gen. Norton Schwartz insisted the material mistakenly sent this month to competitors Boeing [BA] and European Aeronautic Defence and Space Co. (EADS) about each others’ KC-X aircraft bids was not “proprietary” pricing data. While he told reporters two Air Force personnel have been removed from the tanker program over the mix-up, he said this latest hiccup will not alter the acquisition strategy for long-delayed aircraft competition.
“Clearly this was a disappointment, a profound disappointment,” Schwartz said at a Defense Writers Group breakfast in Washington.
The Air Force inadvertently sent each company a compact disc containing one page of “technical non-proprietary information” regarding the other company’s Integrated Fleet Aerial Refueling Assessments, he said. Those Air Force analyses are intended to determine how many tankers are required for different refueling scenarios.
“There was no offerer proposed pricing information on the discs,” he said.
Schwartz said he believes EADS and Boeing now are operating under a “level” playing field in the KC-X tanker contest.
“Both offerers have the same information relative to this inadvertent disclosure,” he said. “So the bottom line is there’s no difference between Boeing or EADS with respect to what was inadvertently disclosed.”
Schwartz said following both an internal and an independent review of the document mix-up the Air Force removed two people “from their role in the program office.” He refused to say who they are, but confirmed the program manager is not one of them. He said “those responsible will be held accountable” and indicated further actions may be taken.
Schwartz said he remains firmly opposed to splitting the tanker contract between Boeing and EADS, a plan advocated by some lawmakers frustrated with years of delays in the contract award.
“The acquisition strategy hasn’t changed,” the top Air Force officer said. “We’re looking for this increment of aircraft, 179 birds, (to come from) a single producer.”
He repeated Air Force and Pentagon leaders’ arguments opposing a dual procurement: the service does not want to pay for two supply chains and training requirements for the tankers, and it cannot afford to buy a high enough volume of tankers from each company each year to reach a desirable economic order quantity.
“We would have to produce at least 24 a year, and probably more, to make it viable for two producers,” he said. “And we intend to purchase somewhere around 15, given the available funding.”
EADS North America CEO Sean O’Keefe told reporters Monday he was not immediately concerned about the document imbroglio (Defense Daily, Nov. 23).
He said he had “no objection” to the Air Force’s handling of the competition, yet said his company executives had not yet ruled out protesting the release of the information.
O’Keefe said EADS officials did not read the misdirected material about Boeing.
Boeing has declined to comment on the incident.
The Air Force has again delayed the date of the tanker contract award, which was expected any time and is now projected for early 2011. A spokesman said Monday the delay is unrelated to the document mix-up.