The competition between Boeing (BA) and Northrop Grumman (NOC) for the KC-X contract is pretty hot. As with many of these contracts the states that stand to benefit the most legislators are supportive. The states being Washington and Kansas for Boeing and primarily Alabama for Northrop. At the same time it doesn’t help anybody to throw insults around and play loose with facts.

Recently Senator Patty Murray of Washington was on National Public Radio (NPR) and supposedly said that “I would challenge anybody to tell me that they’ve stood on a line in Alabama and seen anybody building anything.” Ms. Murray demonstrates taht she knows little or nothing about the U.S. economy and Alabama’s contribution.

Mercedes Benz and Honda make thousands of cars a year in Alabama one assumes on a production line. Hyundai has a 500,000 car a year plant as well. Boeing employs thousands of people in the state as well working for NASA and the Defense Department. So she insulted those people while supporting them at the same time.

The contest should be above such petty insults.

It has been reported that last week Boeing (BA), Northrop Grumman (NOC) and EADS (EADS.P) had a series of meetings with the Air Force to discuss the draft KC-X RFP and the final one. After these meetings EADS and Northrop made clear that their threat not to submit a bid without changes to the RFP language was not an idle negotiation ploy as some have said. The companies believe that the current RFP is biased towards the smaller, cheaper Boeing 767 rather then the larger Airbus 330.

The discussions also indicate that the final RFP will come out before the end of January. Without two bidders it will be hard for the Air Force to proceed so they need a proposal from Northrop and EADS. At the same time they must have an RFP that will hopefully be protest proof and get the needed capability quickly.

One of the solutions that has been mooted to solve the KC-X issue is to buy aircraft from both Boeing (BA) and EADS (EADS.P). This would certainly eliminate many of the issues around the source selection. The Defense Department and Air Force have not supported this idea in the past due to the logistical costs related to operating two dissimilar aircraft. Of course the problem the Air Force faces is that the KC-30 and KC-767 are too dissimilar.

Some in Congress and in the industry suggested the split buy last Summer and now it has been raised again. If Northrop Grumman (NOC) does refuse to submit a bid then the contest is on hold unless there is the will to do a sole source contract again. The split buy would solve that issue and keep Northrop playing.

We will have to see how this plays out.