The current U.S. fleet of aerial tankers consists of a few hundred Cold War era KC-135 aircraft and less then a hundred KC-10 built in the Eighties. The KC-135 is based on the Boeing (BA) 707 airliner but were built as tankers not converted from passenger aircraft. The KC-X program will replace most of the KC-135 if all 400 or more are purchased and built. The initial contract which the proposals are due on is for about 150 aircraft.

Because it will now be several years before the first KC-X flies and a substantial number are available the U.S. Air Force will need to continue to upgrade, maintain and overhaul the existing aircraft. The most modern variant of the KC-135 is the R model. Today ARINC Engineering Services was awarded a contract to upgrade several KC-135R models with new avionics. No value was given for the contract but it will provide modern, digital instruments for the older aircraft. Eventually all KC-135R will receive this upgrade.

Due to the fact that it has taken almost ten years to get to this, the third, attempt to award a contract for a new tanker the KC-135 and KC-10 fleets will fly for several more years beyond what was expected. The continued investment in modernizing these aircraft will help them meet the current set of mission requirements while waiting for the new tankers.

This is an article I wrote at BNET: Government about EADS decision to submit a proposal.

“The decade-long saga to replace the KC-X aerial tanker contract begins a new chapter. The European aerospace giant EADS (EADS: P) and Airbus, its subsidiary, announced that it will definitely submit a contract proposal to the Air Force. The program will replace the aging Cold War KC-135 tankers (pictured).

Boeing (BA) thought it had won the contract for at least 179 new aircraft earlier this year when Northrop Grumman (NOC) who had bid in partnership with EADS withdrew from the bidding. Then, earlier this month, the Pentagon agreed to extend the deadline, at EADS’ request, to allow it time to submit a new bid.”

Read the rest at BNET.

In an article at the Seattle Times, Dominic Gates writes that EADS (EADS:P) is planning on offsetting some of their cost disadvantages related to the bigger aircraft and establishing a new production facility with less development. The aircraft they will offer again for the KC-X program is a modified version of the A330 MRTT already planned for Australia, Great Britain, UAE and Saudi Arabia.

The aircraft is a little behind schedule but is in test flights and will deploy the first of five aircraft to Australia this year. The U.K. ones are slated for 2011 and the two oil states will get there aircraft soon after. There will have to be some modifications to the A330 to meet U.S. Air Force needs but they should be minor. EADS feels that Boeing (BA) will have to spend more money to get their 767 based tanker ready as it does incorporate the 787 cockpit and parts of other 767 models. This means that it is not identical to the 767 tankers ordered by Japan and Italy. Japan has received three of their four aircraft while Italy has seen developmental delays and has not received any.

It is expected that the A330 will cost more to manufacture due to its size and the shipping involved to send the components to the U.S. from overseas. The bigger aircraft while capable of carrying more fuel and having a longer range then the 767 will cost more to operate and may require infrastructure investment as it is much larger then the KC-135 tankers being replaced.

Once the proposals are in it will be seen if EADS can do their pricing correctly.

Over at BNET: Government where I also publish I have a piece on how this third try will be the winning one for the Air Force and Defense Department to get a new aircraft to replace the aging KC-135 fleet. There still remain many challenges with the contest as Northrop may not bid and Boeing has expressed concerns with the fixed price portion of the contract.

It will be an interesting next few months as this is all worked out. Next deadline is May 10th when proposals are due.

Congressman John Murtha (D-PA) a senior Democratic Representative and the Chair of the Defense Appropriations Subcommittee died yesterday from surgery complications. Murtha had at one time pushed the idea of awarding KC-X contracts to both Boeing (BA) and the Northrop Grumman (NOC) and EADS (EADS:P) teams as a way to rapidly replace the aging KC-135 aircraft. He eventually gave up on the idea.

The rationale for the split buy is that it builds the aircraft quicker while also removing the uncertainty of a protest over a single award. The U.S. Air Force and Department of Defense have made it clear that they do not want to do this due to the increased logistical cost associated with operating two different aircraft. The systems might complement each other with the bigger, longer range KC-30 being based further back in the U.S. and its more permanent bases overseas with the KC-767 flying forward and supporting operations in-and-around South West Asia.

The dual award would also mean that Northrop and EADS will be guaranteed work so their threat not to participate in the latest round would not need to be carried out. That is why organizations like the Aerospace Alliance representing Mississippi, Alabama and Florida support they idea. Some work in Mobile, AL is better then none.

The chances of a split buy are fairly remote but there are still those who want it.

The Mayor of Mobile, AL was recently on Capitol Hill raising the issue of buying the new KC-X tanker from both Boeing (BA) and Northrop Grumman (NOC). Northrop and its partner EADS (EADS:P) plan to assemble the A330 aircraft in Mobile and then fit them out with the necessary equipment at a Northrop plant. The idea of awarding contracts to both companies has been discussed before. The primary benefit besides avoiding a protest and delaying the program again would be to more quickly replace the KC-135 aircraft.

The U.S.A.F. and Defense Department have not been positive about this idea in the past due to the larger, more expensive logistics tail required to support two dissimilar systems. During World War II and the Cold War the U.S. often did invest in multiple systems for a mission often operated by separate services. The U.S. military has not had the resources to afford this kind of commitment.

The new RFP is expected to be released within a matter of weeks. For the Air Force to do a dual award it would require development and approval of a whole new acquisition strategy. This would lead to even further delays in this contract. The chances of buying the two aircraft in the next year or so are very slight.

The KC-X Tanker RFP is expected to be released in the next few weeks. Previously Notthrop and its partner EADS had threatened not to participate as they felt the draft RFP was biased in favor of Boeing. Now they are saying they will wait and see what is in the RFP when it is put out. It is in the best interest of the Air Force and the U.S. Government to receive multiple bids on the project.

Without competition the chance of this third attempt proceeding will be difficult. Sole sourcing the contract to either Boeing or the Northrop team will cause an outcry in Congress no matter what as both companies have their supporters. Not putting out a competitive RFP will only lead to protests and further delays in what has become a critical program to replace the aging KC-135 aircraft.

We are all going to have to wait to see what the Air Force puts out and how Northrop, EADS and Boeing respond to it.

This analysis at The Gehrson-Lehamn Group stresses that the Northrop Grumman/EADS A330 based tanker proposal will be more expensive then the Boeing 767 one due to the larger size of the aircraft and the requirements for investments in infrastructure to support it. The conclusion is that the 767 aircraft is currently closer in size to the existing KC-135 fleet and the existing Air Force bases, runways and facilities will support it with little or no modifications.

A key part of building a good proposal and running a smart acquisition campaign is to always remember the customer. That's not very tough on KC-X. We see the U.S. Air Force working very hard to fly and maintain their current fleet of KC-135 air refueling tankers each day and realize they must have a new tanker as soon as possible. I just read a posting in Air Force Magazine's Daily Report eNewsletter ("Afghan Surge Prompts Mobility Records") describing the service's record breaking efforts in Afghanistan that tells it all. According to the story, USAF mobility forces have set records for cargo airdropped (4.1 million pounds in September). On the tanker side, approximately 80 million pounds of fuel was offloaded last month compared to 60 million pounds way back in February. For those of you who have served in the Air Mobility Command, this type of surge is not new but still very impressive. Whether it's the planners at the Tanker Airlift Control Center managing the global movement of aircraft or the aircrews and maintainers keeping it all on schedule despite some difficult challenges, it is very clear how important the U.S. Air Force is to keeping America safe and projecting our nation's reach. Read more at United States Tanker

Prior to the release of the latest RFP for the KC-X tanker program some in Congress and the media mooted using a split award for the aircraft. This would allow for faster fielding of tankers to expedite replacement of the older KC-135′s. It would also possibly reduce the chance of a protest by either Northrop or Boeing as well as spreading the contract around to different states.

The biggest issue with the idea is that it would add cost to the program. Through the necessity of having two separate support tails the overall program would be more expensive. There would be two training tracks, sets of support equipment and parts pools alone. The aircraft also may not be complimentary. The DoD estimated back in April that the total additional cost would be over $14 billion.

Obviously neither the Air Force or the U.S. Government has this kind of money available to support the idea. It would have to be payed for at the expense of other Air Force or DoD programs. It may be that cost estimates with more refinement are created that reduce this, but right now the plan is one company and one aircraft.