Boeing protests Air Force tanker contract award

“We have fundamental concerns with the Air Force’s evaluation, and we are exercising our right under the process for a GAO review of the decision to ensure that the process by which America’s next refueling tanker is selected is fair and results in the best choice for the U.S. war fighters and taxpayers,” said Mark McGraw, vice president and program manager for Boeing Tanker Programs.

McGraw asserted that flaws in the selection process led to the Defense Department choosing “the wrong airplane for the war fighter.”

“It is clear that the original mission for these tankers—that is, a medium-sized tanker where cargo and passenger transport was a secondary consideration—became lost in the process, and the Air Force ended up with an oversized tanker,” McGraw said. “As the requirements were changed to accommodate the bigger, less capable Airbus plane, evaluators arbitrarily discounted the significant strengths of the [Boeing] KC-767, compromising on operational capabilities, including the ability to refuel a more versatile array of aircraft such as the V-22 and even the survivability of the tanker during the most dangerous missions it will encounter.”

The Defense Department on Feb. 29 announced that Los Angeles-based Northrop Grumman and its partner EADS—the French-German parent company of Airbus—had been chosen over Boeing to build up to 179 new KC-45A tankers. The tankers are to replace hundreds of aging KC-135 Stratotanker aircraft that were introduced in the late 1950s. (For more, read “Air Force taps Northrop Grumman to build aerial refueling tankers.”)

On the day of the contract announcement, Pentagon officials said that the Northrop Grumman/EADS team offered the best value to the U.S. government based on the government’s criteria, and they emphasized that the contract competition was an “open and transparent and rigorous” process.

However, Chicago-based Boeing—which has been supplying the U.S. military with refueling tankers for decades—said that it conducted “a thorough analysis of data presented at a March 7 debriefing on the decision” and came to the conclusion that “what began as an effort by the Air Force to run a fair, open and transparent competition evolved into a process replete with irregularities.”

“These irregularities placed Boeing at a competitive disadvantage throughout this competition and even penalized Boeing for offering a commercial-derivative airplane with lower costs and risks and greater protection for troops,” the company said in a news release.

‘Frequent and often unstated changes’

Boeing said that it is asking the GAO to examine several factors in the competition that the company believes were “fundamentally flawed.” Among them, Boeing asserted that the flawed procurement process “resulted in a significant gap between the aircraft the Air Force originally set out to procure—a medium-sized tanker to replace the KC-135, as stated in the RFP—and the much larger Airbus A330-based tanker it ultimately selected.”

“It is clear that frequent and often unstated changes during the course of the competition—including manipulation of evaluation criteria and application of unstated and unsupported priorities among the key system requirements—resulted in selection of an aircraft that was radically different from that sought by the Air Force and inferior to the Boeing 767 tanker offering,” the company said in a news release.

Boeing also complained that the Air Force overlooked the company’s long history of producing tankers and that Boeing “is the only company in the world that has produced a commercial-derivative tanker equipped with an operational aerial-refueling boom.”

“Rather than consider recent performance assessments that should have enhanced Boeing’s position, the Air Force focused on relatively insignificant details on ‘somewhat relevant’ Northrop/EADS programs to the disadvantage of Boeing’s experience,” Boeing said.

“Boeing offered an aircraft that provided the best value and performance for the stated mission at the lowest risk and lowest life cycle cost,” McGraw said. “We did bring our ‘A’ game to this competition. Regrettably, irregularities in the process resulted in an inconsistent and prejudicial application of procurement practices and the selection of a higher-risk, higher-cost airplane that’s less suitable for the mission as defined by the Air Force’s own request for proposal. We are only asking that the rules of fair competition be followed.”