This is the latest post I wrote for BNET: Government entitled “KC-X Aerial Tanker Contract Starting To Become A Farce”.

It starts “The Air Force’s ten-year effort to purchase a new aerial tanker continues rapidly seems to be disintegrating. The third attempt at awarding a contract for what has now become one of the most critical needs for the Department of Defense has been roiled by international trade, politics and concerns about the whole approach.”

You may read the rest here.

EADS North America released a statement last night about the sixty day extension granted for KC-X proposals. They stated:

“Since the Department of Defense indicated their interest in EADS’ participation as prime contractor in the KC-X tanker competition, the company has carefully assessed the many requirements necessary to participate. We have firmly indicated that a 90-day extension would be the minimum time necessary to prepare a responsible proposal for this $40 billion program. We will consider the Department’s decision to offer a 60-day extension.”

This seems to indicate that EADS may still have given themselves an option not to participate by claiming the need for ninety days vice sixty.

The Air Force and Department of Defense acquisition officials briefed Congress and the press today on the new RFP for the KC-X. It had some slight changes from the draft release a few months ago. The key question is will Northrop bid this time around?

They won the last contract to have that thrown out on Boeing’s protest. Much more to come on this in the days ahead.

In a post on BNET Industries, Matthew Potter notes that the Department of Defense is willing to go ahead with only Boeing bidding on the KC-X:

The Secretary of Defense Robert Gates in testimony to the House Armed Services Committee made it clear that the Defense Department and U.S. Air Force will release the Request for Proposal (RFP) for the new KC-X tanker and award a contract even if only Boeing (BA) submits a proposal. The Department hopes that the Northrop Grumman (NOC) and EADS (EADS:P) will submit a bid but will go forward with the planned contract even if they don’t.

In early December Northrop Grumman’s CEO sent a letter to the Air Force stating that due to the terms of the draft RFP they felt that it so favored Boeing that they and their partner EADS, parent of Airbus, would not submit a proposal. Northrop had won the contract in 2008 only to lose it on protest by Boeing with the Government Accountability Office (GAO) saying that the Air Force changed the requirements and was not completely fair to Boeing. An earlier attempt to award Boeing a lease for KC-767 aircraft collapsed amid scandals and Congressional desire to have contest.

Read the entire post Defense Department Willing To Do KC-X With Only Boeing Bid for more.

Yesterday Northrop announced that it is considering not participating in thew new KC-X competition. They are concerned that the the way the price requirement is structured may not be fair to them. They are also pursuing the complaint that their cost data was provided to Boeing during the protest of the last award and want access to the same information.

If Northrop and EADS don’t submit a bid it will be hard to get actual competition on the contract. That would leave just one submission, Boeing, or perhaps two from them if they go the route of having a 777 as well as a 767 proposal. This situation would make it hard for the Air Force to proceed.

The chances of Northrop doing this is low and the Department of Defense realizes it. This is the largest procurement coming down the road and both EADS and Boeing need the work. Of course if there is really a belief that their bid cannot win no matter what then Northrop should just save the money and not prepare one. This is only the draft RFP so the next year or so should be interesting.

Take a look at this Reuters story ...

Looks like the Department of Defense and U.S. Air Force have already pushed back on this. Our position is that the U.S. Air Force clearly and definitively dealt with this issue and we look forward to our first meeting with the Air Force in this competition.