Boeing Continues to Announce Sub-Contractors for KC-46A

As the KC-46A aerial tanker program moves forward headed up by Boeing (BA) they continue to announce the different sub-contractors and parts suppliers. The latest is that BAE Systems (BAE:LSE), the British defense giant, will be providing touch panels to operate some of the systems on the aircraft.

The panels are derivatives of the current ones they manufacture for Boeing’s 737 airliner indicating that Boeing will follow its plan of utilizing components from its different aircraft to support the 767 based tanker. The cockpit is planned to be a version of that used in the new 787 Dreamliner expected to enter service in the next few months.

Leave a Comment

Boeing Issues Contracts for Cargo Nets

Boeing (BA) issued a contract to AmSafe Industries Inc. to manufacture the internal cargo nets for the KC-46A tanker aircraft. The contract has a value of about $45 million.

The barrier net system will be used to restrain and contain cargo inside the aircraft. One of the secondary missions of the modified 767 tanker being built by Boeing is to carry cargo and these nets are key to ensuring a safe flight.

AmSafe is one of the world’s leading manufacturer of these type of systems. They also build safety curtains as part of this to prevent any fire and smoke from the cargo area entering the cockpit and crew areas.

The KC-46A program is continuing a pace with the first aircraft expected to be flown in 2015. Ultimately the Air Force could buy over 170 of the aircraft from this contract.

Leave a Comment

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.

Leave a Comment

Boeing Releases Video of the Italian KC-767

Boeing (BA) has released a video on their Youtube channel of the Italian acceptance of the first two of their four KC-767A tankers.

The video may be found here.

Leave a Comment

Recent Tanker News Link Round Up

The site has been quiet since the award of the KC-46A contract to Boeing (BA), but here are some links to articles about different aspects of the program and the companies involved in the contest:

Boeing is slowly releasing information about the KC-46A design.

World Trade Organization softens ruling against EADS (EADS:P). Boeing and U.S. still claim victory.

House puts strong cost controls on KC-46A with mandatory reporting requirements for Air Force.

First Australian KC-30 arrives at RAAF base for introduction into service.

Leave a Comment

EADS NA Will Not Protest

At a press conference earlier today EADS NA (EADS:P) stated that they will not protest the KC-X tanker award to Boeing (BA).

This means that the U.S. Air Force has awarded a new tanker contract successfully and the last decade of fits-and-starts is over. Now the emphasis shifts to Boeing and their efforts to meet the schedule and performance requirements of the program.

Hopefully this means in a few years the KC-46A will be flying over the United States.

Comments (1)

GAO Denies U.S Aerospace’s Protest

The third bidder for the KC-X tanker contract, U.S. Aerospace (USAE) and its Ukrainian partner Antonov, had their protest denied yesterday by the Government Accountability Office (GAO).

The company had filed the protest because the Air Force had said their proposal was delivered past the deadline for submission. U.S. Aerospace claimed that their courier was deliberately delayed and should have been allowed to make the delivery on time.

This decision leaves only the Boeing (BA) and EADS (EADS:P) bids as being considered for the contract. The Air Force had previously said that a decision would be announced around the middle of November but there have been reports that this might slip.

Comments (1)

Can U.S. Aerospace and Antonov Win?

The KC-X new aerial tanker program Request for Proposals (RFP) attracted a third bid this time around. U.S. Aerospace submitted one based on the Ukrainian made Antonov transport. The question that immediately comes to mind is can this team win, or will it be Boeing (BA) or EADS (EADS:P)?

Realistically the chances of this bid being selected are low. The companies had asked for a sixty day extension to work on their proposal. The Air Force already slipping the contract deadline one month to accommodate EADS refused the further two month slip. This would have pushed award into 2011 with the current planned date of mid-November this year already late enough. The U.S. has been trying to get a replacement tanker for the aging KC-135 since 2001.

U.S. Aerospace and its partner obviously felt their proposal could be improved with the extra two months but did go ahead an turn one in that they feel meets all of the Air Force requirements. At the same time in a recent filing with the Securities and Exchange Commission (SEC) U.S. Aerospace makes clear that the Air Force could easily reject them.

The company writes “For any or all of these reasons, the Air Force may not select our bid, may disqualify our bid, or may refuse to consider it on the merits, or at all,” based on myriad factors. These include not meeting requirements, not having qualified sub-contractors, not having necessary facilities or capabilities and even missing the deadline. They didn’t do that turning one in on time.

Of course all of this could be standard “Forward Looking Statements” meant to make clear to anyone investing in their stock that they are being conservative in their estimates. The stock was trading at 18 cents at the close on Friday.

Certainly they have offered a cost effective approach. The Air Force must consider if it meets their requirements and they have the ability to produce the systems to the necessary schedule. Certainly stranger things have happened in defense contracting.

Leave a Comment

Boeing and Antonov Follow EADS and Submit KC-X Proposals

Boeing (BA) submitted their proposal for the KC-X aerial tanker program a day after rival EADS (EADS:P) did. Today was the day it was formally due, EADS coming in a little early. The Boeing proposal stresses their cost and size benefits over competing EADS with their larger A330 based aircraft. Boeing is basing their bid on a modified 767 airliner with advanced avionics from the yet to enter service 787.

Also U.S. Aerospace and Antonov submitted their competing proposal after losing a bid to delay things sixty days. There total cost is under thirty billion for a contract the Air Force has estimated at $37.5 billion based on an aircraft cost of only $150 million each.

The Air Force plan is to award the contract in four months. The three bids may make the competition’s source selection last longer and may also raise the chance of a protest.

If the U.S. Aerospace / Antonov team wins it might get very interesting.

Comments (2)

Reports That EADS Has U.S. Partner

EADS (EADS:P) had decided to go it alone with their own bid for the KC-X aerial tanker after former partner Northrop Grumman (NOC) decided the requirements favored Boeing (BA) too much. All that meant is that EADS would prime the contract but would probably find other companies, including U.S. ones, to sub for them. It is now being said by EADS that they have found at least one U.S. defense contractor to do “sensitive equipment”. The company is unidentified at this point.

This only makes sense as it allows Airbus to deliver a A330 aircraft or tanker to a U.S. facility to do the integration of the military equipment such as radios and defensive equipment. EADS is planning to do this with Lockheed Martin (LMT) on the Army’s new attempt at buying an Armed Reconnaissance Helicopter (ARH) and should do this for KC-X. Lockheed planned the same thing with Augusta Westland on the failed VH-71 program. By using an American company to do this sort of work it helps with security and technology transfer issues. It is also the reason that EADS North America exists.

Leave a Comment