The
Boeing [NYSE: BA] KC-767 would be a lower-risk aerial
refueling tanker for the American military and taxpayers
than the Airbus A330-based KC-30, and it would be superior
in the areas of cost, production, schedule and capability.
An
analysis of the evaluation that led to the choice of
the tanker proposed by the team of Northrop Grumman
and the European Aeronautic Defence and Space Company
(EADS) reveals that numerous irregularities in the process
resulted in a higher-risk, higher-cost aircraft being
selected. Those irregularities form the basis of a protest
Boeing filed with the Government Accountability Office
following the contract award announced on Feb. 29.
"We
offered a tanker that exceeded the mission requirements,
kept the manufacturing risk as low as possible and offered
an aircraft that saved billions of taxpayer dollars,"
said Gregg Rusbarsky, director of Boeing's U.S. Air
Force Tanker Program. "Compare that with EADS-Northrop,
who have never delivered the core technology for aerial
refueling -- a working air-to-air refueling boom."
When
calculating risk, the contract decision failed to account
for multiple manufacturing challenges the A330-based
tanker is likely to encounter. EADS and Northrop will
need to integrate different corporate partners, numerous
factory sites, different cultures and technical standards,
all into a single enterprise that is expected to deliver
aerial tankers on time and on budget.
KC-30
production would be managed by two companies on two
continents in five countries, separated by one ocean.
According to EADS-Northrop, the initial production plan
will build the first six aircraft in five different
ways. The first tanker will be assembled as a passenger
plane by Airbus in Toulouse, France, converted to a
freighter in Dresden, Germany, converted to a tanker
in Madrid, Spain, and flown to Melbourne, Fla., for
finishing. For aircraft 2 and 3, Madrid's involvement
will be eliminated, and Melbourne will do the tanker
conversion -- for the first time. By aircraft 4, Mobile,
Ala., will replace Melbourne, and for the first time,
begin the tanker conversion. Production will vastly
change when the process converts from a modification
to an in-line production system at the start of low-rate
assembly. Finally, the basic aircraft will likely change
from the passenger A330 to the A330 Freighter, so the
aircraft would have a real cargo floor for the first
time. This presents extreme challenges for configuration
control and U.S. Federal Aviation Administration (FAA)
certification, yet this approach was rated equal in
risk to the less risky, more efficient Boeing plan.
Not
only has Boeing built or upgraded more than 2,000 operational
tankers to include recent delivery of two KC-767s to
Japan, the company has also delivered more than 100
commercially derived military aircraft to the U.S. military
and all have passed rigorous FAA certification requirements.
Boeing has also delivered five commercial derivatives
of the initial 767 airplane.
Not
only has Boeing built or upgraded more than 2,000 operational
tankers to include recent delivery of two KC-767s to
Japan, the company has also delivered more than 100
commercially derived military aircraft to the U.S. military
and all have passed rigorous FAA certification requirements.
Boeing has also delivered five commercial derivatives
of the initial 767 airplane.
Additionally,
Boeing has met all the manufacturing requirements requested
by the Air Force, including an independent analysis
by The Rand Corp. that was commissioned by the U.S.
Department of Defense. Rand had recommended an export-compliant
in-line manufacturing approach for the new tanker.
Airforce calculation in 2001
--------------------------------
Conklin & de Decker, an independent aviation
research company
Boeing: Study Projects That As Oil Prices Climb, 767 Tanker
Most Cost Efficient
ST. LOUIS, March 17, 2008 -- Boeing [NYSE: BA] reports that
the U.S. Air Force likely would pay up to $30 billion more
in fuel bills over 40 years to operate a fleet of 179 Airbus
A330-200 aerial refueling tankers, compared to a similar number
of tankers based on the Boeing 767-200ER.
This
assessment is based on a Conklin & de Decker Aviation Information
study, funded by Boeing, that calculated the Air Force's cost
with oil at $100 per barrel and $125 per barrel. Oil prices
hit a record high last week above $110 a barrel, and many
analysts expect prices to continue climbing. .
Conklin & de Decker, an independent aviation research company,
recently recalculated fuel price costs for the Boeing 767-200ER
and the Airbus A330-200, popular commercial twin-aisle aircraft
that are being converted to military aerial refueling tankers.
They fly about the same distance, but the larger, heavier
A330 is less fuel efficient than the 767-200ER. As a result,
the A330-200 consumes 24 percent more fuel per trip than the
767-200ER.
The
study also factored in estimated costs of refining, transportation,
storage, handling and fueling the aircraft. It concluded the
estimated price per gallon at $3.11 with oil costing $100
per barrel would cost the Air Force about $25 billion dollar
more over the 40-year service life of 179 Airbus A330-200
tankers, and $29.8 billion more with oil at $125 a barrel.
The Air Force previously estimated that it pays an additional
$600 million a year for each $10 per barrel increase.
In
January, Boeing funded and released a 53-page study by Conklin
& de Decker that showed Boeing's 767 airplane consumed 24
percent less fuel than the larger A330 and would save about
$14.6 billion in fuel costs over 40 years. The study used
published data to calculate the fuel consumption of flying
a fleet of 179 767-200ER and Airbus A330-200 aircraft over
a 40-year service life. The Air Force's Request for Proposal
called for a highly capable, medium-sized, low-risk and low-cost
refueling tanker to replace its aging fleet of KC-135 tankers.
On
Feb. 29, the Air Force selected Northrop Grumman-EADS to build
179 next-generation A330 tankers. In briefing Boeing on their
decision, Air Force evaluators acknowledged that they placed
little value on fuel and maintenance lifecycle costs, despite
paying $6.6 billion on aviation fuel in 2006.
Boeing
has filed a formal protest with the Government Accountability
Office, asking the agency to review the Air Force's decision.
"Based
upon what we have seen, we continue to believe we submitted
the most capable, the lowest risk and lowest cost airplane
as measured against the Air Force's Request for Proposal,"
said Mark McGraw, vice president, Boeing Tanker Programs.
"This latest estimate in increased life-cycle costs for the
Airbus plane adds to our fundamental concerns with the Air
Force's evaluation and decision."
On
March 11, 2008 Boeing filed a formal Protest regarding
the selection by the U.S. Air Force of the Northrop Grumman/European
Aeronautic Defense and Space Company KC-30 Over the Boeing KC-767
for its KC-X medium-sized tanker program. The decision to protest
was not one made lightly. However, what became clear in the
debriefings following the selection was that the KC-X acquisition
process was flawed. Repeatedly, fundamental but often unstated
changes were made to the bid requirements and evaluation criteria.
These arbitrary changes not only unfairly skewed the results
against Boeing: they penalized the warfighter and the taxpayer
by selecting an airplane that did not satisfy the Air Force's
own bid requirements.
Let's
look at the facts
SIZE
REQUIREMENT. The KC-X Request for Proposal (RFP) sought
to replace aging KC-135s, a medium-sized tanker. A future program,
KC-z, would aim to replace larger KC-10 tanker. In fact, during
the KC-X acquisition process, Boeing was led to believe that
its 767 was the appropriate platform to offer, since it appeared
to answer precisely the Air Force's requirements. Yet the KC-30
is much larger than the KC-767 and even 27% Larger than the
KC-10. This excess capacity sacrifices fundamental Air Force
requirements of deploy ability and survivability. It doesn't
add up.
MISSION CAPABILITY. In analyzing Mission
Capability, the most important evaluation factor. Boeing received
the highest possible rating, meeting or exceeding all key A
Performance Parameters. Among other measurements, the Air Force
identified positive "discriminators" as well as "weaknesses"
While the KC-30 had 30 discriminators and five weaknesses, among
them its aerial refueling boom, the KC-767 had 98 discriminators
and only one weakness. It doesn't add up.
RISK.
In assessing Risk, Boeing and its competitor received
equal scores. And yet Boeing is an integrated company with one
management team and 75 years of tanker-building experience.
Furthermore, the KC-767 will be built on an existing production
line that has made 767s for years.
By
contrast the KC-30 will be built by a
combination of a U.S. company and a European one, with two management
teams on two continents, with no experience building tankers
together - utilizing numerous production facilities across Europe
and in an American plant that doesn't yet exist. It doesn't
add up.
COST.
The RFP made clear that the Most Probable Life Cycle
Cost (MPLCC) was the key Cost/Price metric for source selection.
The MPLCC not only includes the cost of acquisition: It includes
the cost of operation and maintenance. In its evaluation the
Air Force discounted the weight of the MPLCC and inflated Boeing's
costs by billions of dollars, even though Boeing's proposed
cost data was in full compliance with the Federal Acquisition
Regulation. As a result, the Air Force and taxpayers will pay
billions more for the Northrop Grumman/EADS airplane. It doesn't
add up
PAST
PERFORMANCE. Past Performance was rated "Satisfactory
Confidence" for both Boeing and Northrop Grumman/EADS, despite
the enormous disparity of experience between the two in building
tankers and military derivatives of commercial aircraft Older
and outdated Contractor Performance Assessment Ratings were
used for Boeing while KC-X evaluators ignored or failed to adequately
account for numerous troubled programs from its competitor (some
examples include the Australian tanker, the A400M Airlifter,
and E-2D SDD). Additionally, Boeing has certified and delivered
to Japan two of the most advanced tanker aircraft in existence,
a critical achievement that received insignificant credit. It
doesn't add up.
The
bottom line is that the selection process for the KC-X was flawed
by countless irregularities. In the evaluation, selection criteria
were misapplied, the RFP was disregarded and the requirements
of the Federal Acquisition Regulation were not adhered to-resulting
in the selection of a much larger, more vulnerable, less capable
and ultimately more costly offering. It's a decision that doesn't
add up: not for the warfighter or the taxpayer. And one that
should not stand .
Boeing
KC-767 Tanker Determined More Survivable in U.S. Air Force
Evaluation
ST. LOUIS, April 11, 2008 -- Boeing [NYSE: BA] today said
the U.S. Air Force's decision to award a contract for the
next aerial refueling airplane to the team of Northrop Grumman
and the European Aeronautic Defence and Space Company (EADS)
is at odds with the fact that the Northrop/EADS team's KC-30
is less survivable and more vulnerable to attack than the
Boeing KC-767 Advanced Tanker.
The
Air Force evaluation cited the Boeing offering to be more
advantageous in the critical area of survivability. The evaluators
found the KC-767 tanker had almost five times as many survivability
discriminators as its competitor.
Speaking this week at the Aerial Refueling Systems Advisory
Group (ARSAG) Conference in Orlando, Fla., former U.S. Air
Force Chief of Staff and retired Gen. Ronald Fogleman stressed
that survivability greatly enhances the operational utility
of a tanker.
"When I saw the Air Force's assessment of both candidate aircraft
in the survivability area, I was struck by the fact that they
clearly saw the KC-767 as a more survivable tanker," Fogleman
told the ARSAG audience in his role as a consultant to Boeing's
tanker effort. "To be survivable, tanker aircraft must contain
systems to identify and defeat threats, provide improved situational
awareness to the aircrew to avoid threat areas, and protect
the crew in the event of attack. The KC-767 has a superior
survivability rating and will have greater operational utility
to the joint commander and provide better protection to aircrews
that must face real-world threats."
On Feb. 29, the Air Force selected Northrop/EADS' Airbus A330
derivative over Boeing's 767 derivative. Boeing subsequently
asked the Government Accountability Office to review the decision,
citing numerous irregularities and a flawed process that included
deviations from the evaluation and award criteria established
by the service for the competition.
During the Air Force debrief, the Boeing team discovered the
KC-767 outranked the KC-30 in the critical survivability category.
The KC-767 achieved a total score of 24 positive discriminators
-- including 11 described as major -- while the KC-30 scored
five, none of which were major.
Major survivability discriminators for the Boeing KC-767 included:
More robust surface-to-air missile defense systems
Cockpit displays that improve situational awareness to enable
flight crews to better see and assess the threat environment
Better Electro-Magnetic Pulse (EMP) hardening -- the KC-767
is better able to operate in an EMP environment compared
with the KC-30
Automatic route planning/rerouting and steering cues to
the flight crew to avoid threats once they are detected
Better armor-protection features for the flight crew and
critical aircraft systems Better fuel-tank-explosion protection
features.
Boeing's
KC-767 Advanced Tanker will be equipped with the latest and
most reliable integrated defensive equipment to protect the
aircraft and crew by avoiding, defeating or surviving threats,
resulting in unprecedented tanker survivability -- far superior
to all current Air Force tankers as well as the Northrop/EADS
KC-30. The Boeing KC-767 also includes a comprehensive set
of capabilities that enables unrestricted operations while
providing maximum protection for the tanker crew.
Boeing
KC-767 Tanker Adds Up to Best Value for Warfighter, Taxpayers
ST.
LOUIS, April 15, 2008 -- The Boeing [NYSE: BA] KC-767 Advanced
Tanker would save billions of dollars over the anticipated
lifetime of the aircraft compared with the larger Airbus-based
KC-30. Nonetheless, the U.S. government selected the larger
air tanker from the team of Northrop Grumman and the European
Aeronautic Defence and Space Company (EADS).
Due
to irregularities in the competition, such as the cost comparison,
Boeing has protested the decision and asked the Government
Accountability Office (GAO) to determine if the tanker acquisition
process, including the cost analysis, was unfair and flawed.
As the GAO reviews the decision, Boeing is also calling on
policymakers to question why the comparison of full costs
of the new tanker fleet failed to reflect that the Airbus
KC-30 tanker is larger, heavier, less fuel-efficient and --
according to the Northrop/EADS team itself -- more costly
to operate.
"As
Americans pay their taxes this week, it's essential that they
consider how effectively those dollars will be spent to equip
U.S. warfighters," said Sen. Sam Brownback of Kansas. "It's
especially important to think about the total cost of developing,
producing, operating and maintaining vital defense assets
that must be ready to fly at least two generations of American
military men and women."
In
evaluating the two tanker offerings, the U.S. government determined
that the Boeing KC-767 and the Northrop/EADS KC-30 were nearly
equal at a cost of $108 billion to buy and operate 179 tankers
over 25 years. Boeing contends that a realistic comparison
of life-cycle costs -- what the Air Force calls Most Probable
Life-Cycle Costs (MPLCC) -- should have resulted in a significantly
higher price tag for the Airbus KC-30 when considering the
biggest cost drivers: fuel, maintenance costs and infrastructure.
Fuel: Using commercial aviation data, a Conklin & deDecker
Aviation Information fuel study funded by Boeing indicated
that with the price of oil between $100-125 per barrel,
the larger, heavier and less fuel-efficient KC-30 would
cost $30 billion more in fuel costs than the Boeing KC-767
over an anticipated 40-year service life.
Maintenance: Based on the requirements for a smaller aircraft,
the KC-767 would be approximately 22 percent less costly
than the KC-30. Military Construction: The larger KC-30
would require approximately $2 billion to build or upgrade
hangars, ramps, access roads and other facilities at tanker
bases, while existing facilities that are sized for the
current fleet of KC-135 tankers will be able to accommodate
the smaller KC-767 with substantially less costly improvements
required.
Additional Infrastructure Costs: To accommodate Air National
Guard and Air Force Reserve units -- which operate primarily
from civilian airfields and have 60 percent of the Air Force
tanker fleet -- further costly investment would be required
to upgrade facilities where KC-30s would be based.
More robust surface-to-air missile defense systems