GAO Expresses Concerns with KC-46A Development

The Government Accountability Office (GAO) released a report on the KC-46A new aerial tanker program and expressed some concerns with the schedule. Boeing (BA) won the contract to develop a version of their 767 airliner and deliver 17 aircraft after a long struggle with EADS (EADS:P).

GAO is worried that some of the software that is being developed to control the mission planning, defense and routing of the aircraft is being done at the same time as production and testing. GAO also considers the new fuel boom operating station and control higher risk as it has yet to be demonstrated in normal operating environment and at a high maturity. Similar systems are in use on only 3 tankers operated by non-U.S. military.

The KC-46A contract as expected has had some cost increases and earlier this year the Director, Operational Test & Evaluation (D,OT&E) also expressed that the test schedule was not adequate and the program did not allow enough time for the necessary testing.

The Air Force and Boeing dispute the reports claiming the program is on track and risks manageable.

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Will EADS Protest?

Now that the U.S. Air Force and Defense Department have awarded the KC-X new aerial tanker contract to Boeing (BA) for their KC-46A aircraft the major question is whether the losing EADS NA (EADS:P) bid will protest? In 2008 when the Air Force selected Northrop Grumman (NOC) and EADS Boeing did protest and the choice was overturned leading to this current iteration of the contest. Considering this is the only fixed wing aviation program in the near future or at least until the Next Generation Bomber program emerges it may be hard for EADS not to protest on the chance that they might win or at least there would be another competition.

In their public statement the company is non-committal about the chances of filing a protest with the Government Accountability Office (GAO). They say “EADS North America officials today expressed disappointment and concern over the announcement by the U.S. Air Force that it had selected a high-risk, concept aircraft over the proven, more capable KC-45 for the nation’s next aerial refueling tanker.” but they also say ““Though we had hoped for a different outcome, it’s important to remember that this is one business opportunity among many for EADS in the United States,”. So read into that what you may.

At a minimum the filing of an unsuccessful protest would delay the initiation of the contract for about 100 days making the delivery of any new tankers to the Air Force even later then they will be after an almost ten year process to build a new one.

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Loren Thompson Predicts EADS Win

The well known aerospace analyst writes that based on discussions he has had it looks good for EADS North America to win the current KC-X new aerial tanker competition. He believes that the information accidentally shared by the U.S. Air Force with EADS and its U.S. competitor, Boeing (BA), indicate that the analysis by the source selection board favors EADS A330 MTT based bid.

EADS did win the contest two years ago teamed with Northrop Grumman (NOC) only to have it overturned on protest by Boeing. The Government Accountability Office (GAO) ruled that the Air Force had not applied its own criteria properly in evaluating those bids.

This time around EADS bid by itself and proposed basically the same aircraft. Boeing bid a modified version of their 767 tanker incorporating parts of the new 787 cockpit and other improvements.

Last month the Air Force had to admit it sent information to the two bidders about the others after mixing up the CD’s with data.

In Thompson’s analysis the data showed the Air Force favoring the EADS aircraft. Of course Boeing will have a chance to protest if they really do lose this contract.

In another piece of this very complicated puzzle this latest development may have serious affects on the latest attempt to replace the KC-135 Cold War era tankers.

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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.

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Air Force Preparing for Slip to KC-X Award?

There are now reports that the U.S. Air Force may slip the announcement of a winner of the KC-X contract until the end of the year. The last planned date was the middle of November. This was a slight slip as the original goal was to have work start on that date.

Now it could be as late as just before Christmas that an award will be made. There are potential concerns with the results of the mid-term elections in early November that may have to be reflected on when coming to a decision on whether to award to Boeing (BA) or EADS (EADS:P). No matter what the program may see further delay if the loser protests the decision.

The Government Accountability Office (GAO) is also addressing two protests by the U.S. Aerospace (USAE) and Antonov team over the failure of the Air Force to accept their proposal claiming it was delivered five minutes too late. There is a chance that any upholding of the protests would cause further delays to the source selection and award.

The KC-X is now on its third iteration over the the last nine years and continues to look as if a new tanker won’t be purchased anytime soon.

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First Protest Filed for KC-X Competition

There has been plenty of expectations that the loser of the latest KC-X competition would file a protest. Boeing (BA) was able to overturn the award to Northrop Grumman (NOC) and EADS (EADS:P) in 2008 when the Government Accountability Office (GAO) upheld its protest of that contract. Now there has already been a protest of this round before the source selection has really got underway. The protester, too, is not one of the usual suspects but U.S. Aerospace (USAE) who announced that they were teaming with Ukrainian aircraft manufacturer Antonov for the multi-billion program to replace the KC-135 in use by the U.S. Air Force.

U.S. Aerospace is protesting the fact that the Air Force said their proposal was received late and will not be considered in the competition. The service has made clear that only the EADS and Boeing ones were received by the deadline of 2:00 PM on 9 July.

The upstart bidder says that their proposal was at the site thirty minutes prior to that time but that Air Force personnel deliberately delayed the courier preventing delivery until five minutes after the deadline. The Air Force is standing by its decision.

The KC-X has been an on-again-off-again program for most of this decade. The initial plan of a lease of 767 based aircraft from Boeing was thrown out amid convictions of U.S. Air Force and Boeing personnel for corruption. The second attempt as mentioned above was lost on protest. This third try looked fairly smooth once EADS committed to bid on their own until late June when the U.S. Aerospace proposal emerged. Now a source selection that is supposed to be complete in early November is facing a potential hiccup depending on how the GAO rules on U.S. Aerospace’s protest. The addition of a third proposal to evaluate may cause delays in the selection and award process.

KC-X just gets more interesting as time passes.

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Department of Defense Willing to do KC-X with only Boeing

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.

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