Archive for McCain

Boeing and DoD Release Latest Estimate for KC-46A First Phase Contract

The Hill is reporting that Boeing (BA) currently estimates the first phase of the KC-46A contract at about $5.2 billion or 6% above the $4.9 billion ceiling price. All of that increase if that is what it turns out to be will be paid for by Boeing. The cost share of the difference between $3.9 billion target price and the $4.9 billion ceiling will be split between the Government and Boeing.

There was some consternation when the reports of Boeing’s efforts costing a great deal more then the $3.6 billion price at which the contract was awarded. This led to charges that Boeing “bought in” the contract by bidding deliberately low so that competitor EADS North America, part of European aerospace giant, EADS (EADS:P), could not win.

As the contract goes forward the total cost will change depending on what challenges the program faces and if it needs more time and investment to develop the variant of the Boeing 767 airliner. It may end up being less then $5.2 billion or even more as the program evolves.

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Good Summary Of The KC-X Situation

The Kansas City Star has this lengthy article that describes the whole situation and explains how we got where we are with the KC-X tanker RFP. The article by Cleon Rickle may be found here. Key takeaways are:

“”I am confident Boeing can build the best plane for the Air Force, no matter the competition,” said U.S. Sen. Pat Roberts,of Kansas. “However, I urge the Department of Defense to run a fair competition and avoid coddling EADS to the detriment of American warfighters who have waited eight years for this contest to end and decades for a new tanker.”

“We will offer a modern, more capable tanker in response to the Defense Department’s decision to encourage competition for this major taxpayer investment,” said EADS North America chairman Ralph Crosby, Jr. “Our KC-45 is the only real, flying, low-risk solution that today meets the demanding Air Force air refueling requirements and is actually in production now. ”

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John McCain Inserts Himself Into KC-X Competition

Senator John McCain (R-AZ) whose efforts frustrated the Air Force’s attempts to award Boeing a lease deal for the new tanker back in 2001 – 2004 started the whole competition now says that he wants an independent “watchdog” as part of this source selection. He was not clear as to who he would want to do this but hopes to have an unbiased source selection.

If there is a protest over the latest attempt the GAO will be the “independent” agency tasked with sorting that out. If they fail there is always the U.S. Court of Appeals. Those should be independent enough for Senator McCain.

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