Archive for November, 2010

Air Force Confirms Slip While Their Error Roils Contest

24 November – Update: The Air Force reportedly reassigned the two persons involved in sending the information to the wrong bidders. They still claim that the error will not affect the contest. EADS has said on record that haven’t ruled out a protest based on this incident.

The Air Force in a recent announcement confirmed that the source selection for the KC-X new aerial tanker won’t be completed until second quarter of Fiscal Year 2011. This was part of a much more important admission by the military that they had accidentally sent evaluation information on Boeing (BA) and EADS (EADS:P) bids to the wrong teams. Boeing got EADS and vice versa.

The computer data files sent to the contractors included pricing data for the two bids. The effect of this error on the whole contest is yet undetermined and the Air Force seems to be trying to push through with the hope that the leak is minimal. Without the companies coming forward to admit to looking at the data there is no way of knowing how much effect this will have on the proposals.

Certainly this adds yet another twist to the ongoing saga that is the KC-X competition and will certainly play a role if there is a protest by the losing bidder.

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Navy LCS Strategy Raises Idea of Split KC-X Buy Again

In the past some analysts and members of Congress floated the idea of using both Boeing (BA) and EADS (EADS:P) as sources for new tankers. This split buy would negate contract protests and also more rapidly replace the aging KC-135 aircraft. The U.S. Air Force had always pushed back saying that the logistical costs of having two very different aircraft would be too expensive. Neither Boeing or EADS really supported the idea publicly either.

One of the leading proponents was Democratic Congressman John Murtha of Pennsylvania who died in the last year. The idea seemed to go away when the Air Force released its latest RFP and Boeing and EADS submitted their proposals.

Now the U.S. Navy’s decision to use two sources for their new small combatant the Littoral Combat Ship (LCS) is raising the issue again.

The original plan was to use two different designs and contractors to make this ship due to the large amount planned to be built. Two years ago because of cost and schedule problems the Navy changed its plan to one where several batches of ships would be awarded in separate contracts. But after receiving the proposals for the first batch the prices from the two bidders were so good the Navy has asked to go back to the dual source plan again.

There are some differences as the Navy planned for multiple providers even with the new acquisition strategy. The KC-X was always going to be one. The LCS despite two radically different hull designs meet the same basic requirements for speed, seakeeping, range and weapon layout. The Airbus 330 and Boeing 767 designs are quite different in fuel loads, range, runway and support requirements so the Air Force would still have two large, dissimilar logistic tails.

Even if Congress or others want the Air Force to copy the Navy in this case it really doesn’t make sense to do so. The original strategy should be stuck too and carried out.

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Article at Washingtonian Magazine

The Washingtonian Magazine has written a good history of the KC-X aerial tanker program. It may be found here.

It is timely to look back at what got the program to this state as we wait for the next contract award announcement in the next few months.

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Rockwell Collins Plans for KC-X Delay

Rockwell Collins (COL) had a good fourth quarter when they announced their most recent earnings. Overall revenue was up almost eight percent and profit twelve. Like most defense contractors though the company is planning for rougher times ahead as the U.S. defense budget declines.

Rockwell is part of Boeing’s (BA) team bidding for the KC-X new aerial tanker and the CEO, Clay Jones, said as part of the earnings release that they expect the contract award to be delayed.

Expectations were that it would be announced early next month but there have been consistent rumors and stories that this will be pushed off at least a few months as the Air Force evaluates EADS’ (EADS:P) and Boeing’s submissions.

The Air Force has been trying to buy a new tanker to replace the aging KC-135 aircraft now for most of this century. The current competition represents the third attempt and the second using competitive bids.

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