Contract Dispute

[thedrifter]

Contract Dispute
By Dave Reaboi
Published 7/7/2008 12:07:20 AM

Honest conservative partisans from either side of the KC-X "tanker war" should concede that there were no perfect choices in awarding the contract for the in-flight refueling aircraft earlier this year.

Ruling in favor of European-owned EADS opened the Air Force up to legitimate national security criticisms, not to mention rewarding a foreign state-owned and operated business for unfair practices. Ruling in Boeing's favor would have both enraged free trade purists (with long histories of antipathy toward the Washington defense giant) and re-fired old controversies in the Senate.

The just-released Government Accountability Office report should end the tanker controversy -- at least within the conservative commentariat. After all, the "free market" opinion, expressed by, among others, the Wall Street Journal and several contributors to National Review, rests on the assumption that the tanker competition was fair.

They assumed that the Air Force chose the best refueling tanker for its needs. If a majority-foreign tanker was selected on the basis of its merits, all the better victory for the principles of laissez faire trade.

This is a sympathetic case for many conservatives, who'd sooner die than look like protectionists and strange bedfellows with John Murtha, Patty Murray and the AFL-CIO. Of course, today's liberal democrats and unions (as well as Lou Dobbs and Pat Buchanan) are forthrightly protectionist. However, there's plenty reason to favor Boeing in the "tanker war" that has nothing to do with jingoism.

Here, the GAO report describes why:
We find that the agency's selection… as reflecting the best value to the government was undermined by a number of prejudicial errors that call into question the Air Force's decision that Northrop Grumman's proposal was technically acceptable…. In addition, we find a number of errors in the agency's cost evaluation that result in Boeing… as the offeror with the lowest evaluated most probable life cycle costs to the government.

The report could read as a primer on the tanker row thus far (admittedly, though, a dry one), from the initial request for proposals to unlocking the criteria on which the decision should've been based.

In detail, it refutes most conservatives' assumptions about the tanker process in two ways. First, it makes clear -- embarrassingly so, to the Air Force -- that the process was corrupt. Whether by accident or design, procurement officials misled Boeing regarding the basic criteria on which the award would be given.

The report shows that the tanker decision was rife with irregularities and questionable decisions.


SECONDLY, THE REPORT should go a long way toward correcting the rumors and propaganda disseminated by EADS in the days following the announcement of the award.

In an effort to hurriedly establish talking points to leverage the debate, whisper-campaigns from unnamed sources leaked misleading information to the press about a so-called lopsided victory on the part of the EADS tanker, including that, in the eyes of the Air Force, Boeing was beaten "by a mile."

The GAO contradicts these talking points, and then some. While most of the proprietary information is blacked-out, the report contends that the Air Force assessed the Boeing and Airbus tankers very differently.

Not only were the two proposals "very similar" in quality, but there's reason to believe the Air Force overlooked several of the primary requirements in the case of the EADS tanker -- which possibly would make it ineligible for the award -- including the fact that the proposal failed to prove the tanker could actually refuel all currently compatible planes using Air Force procedures.

A key requirement for the KC-X tanker is its ability to meet, among others, overrun and breakaway performance standards. This has to do with a plane's dive speed and ability to refuel in complex situations and at high speeds. After admitting the Airbus tanker was unable to pass this threshold without an additional "fix," the GAO report found that the Air Force made no effort to verify that the "fix" would work at all.

Another assumption shattered by the GAO report is just as damaging to the free market case: that the Airbus A330 tanker was chosen because it was a larger than Boeing's K-767 and, hence, offered more room for cargo and personnel.

While this is undoubtedly true, the report makes clear that the Air Force's intention was to look for a replacement for a medium-sized tanker first, with two procurements for the larger planes just over the horizon. In other words, the chief criterion on which the Airbus tanker was selected was irrelevant to the request for proposal at hand.


WE CAN NOW SEE that, by awarding EADS/Airbus with the tanker contract, the Air Force didn't select the best plane for the job. Even professional earmark fighters, long suspicious of Boeing, should be able to make peace with a re-evaluation based on a very clear and disinterested reading of the original criteria.

After all, there's no virtue in choosing the wrong $35 billion product just to show your free trade bona fides.

The GAO report on the Air Force's KC-X tanker decision ought to put to rest the "tanker wars" for all but the most entrenched, bitter partisans. Independent pork-fighting groups -- or conservatives concerned with the integrity of competition in government procurement -- should re-evaluate their stance based on this new information.


Dave Reaboi is a research associate at the Center for Security Policy, a non-partisan defense research organization in Washington, D.C.




Ellie

[thedrifter]

Let's Solve the Tanker Mess
by Gen. John Handy (more by this author)
Posted 07/07/2008 ET


Most of us in the Air Force mobility community were a bit surprised by the decision to buy the quite large Airbus-330 tanker instead of the smaller Boeing 767 tanker. But the real shock was in the unusually harsh language used by the Government Accountability Office in overturning that decision. It was the harshest language used to overturn an action by the Air Forces choice that I have read in my entire career.

In that career -- spanning 39 years in the Air Force -- I was fortunate enough to have been the Commander of the United States Transportation Command (USTRANSCOM) and the USAF Air Mobility Command (AMC) from November 2001 until retiring from the Air Force in October 2005.

I devoted many years to the operation of air refueling tankers in support of the hundreds of other aircraft and tens of thousands of soldiers, sailors, airmen, marines and Coast Guardsmen who depend on them to create the “air bridge” that enables American forces and relief supplies to reach any corner of the world in only a few hours. Without the tankers performing when and where needed, America would not -- quite literally -- be a “superpower.”

In the many challenges we faced in those years, the soldiers, sailors, airmen and marines in TRANSCOM pulled together as a joint team to get the job done on a daily basis throughout the entire time I was blessed to be their commander. We engaged in multiple crises around the world -- humanitarian disasters as well as significant military conflicts in both Afghanistan and Iraq.

The most serious limitation we had was our equipment: the shortage of adequate mobility assets -- meaning airlift and air refueling aircraft. First among those problems was then, and is now, the tankers.

I spoke about the air refueling tanker age and shortages on a routine basis with anyone who would listen. And I did so in the context of the other requirement those badly needed assets would support which includes virtually everything the armed services have to move from one place to another that can be loaded onto an airplane.

The shocking language of the GAO decision compels me to do something I’ve never done before: to speak out publicly. I am not employed by either Boeing or Northrop-Grumman. But the service I’ve devoted most of my life to appears to need a bit of help.

Somewhere in the acquisition process, it is obvious to me that someone lost sight of the requirement. Based on what the GAO decided, it’s up to people such as myself to remind everyone of the warfighter requirement for a modern air refueling tanker aircraft.

Recall that we started this acquisition process in order to replace the Eisenhower era KC-135 aircraft with a modern version capable of accomplishing everything the current fleet does plus additional needs for the future. Thus the required aircraft is of small to medium size much like the KC-135. Not a very large aircraft like the current KC-10, which may be replaced later with a comparably large aircraft.

Why a smaller to medium size aircraft? Because, first of all, you want tankers to deploy in sufficient numbers in order to accomplish all assigned tasks. You need to bed them down on the maximum number of airfields around the world along with or close to the customer -- airborne fighters, bombers and other mobility assets in need of fuel close to or right over the fight or crisis. This allows the supported combatant commander the ability to conduct effective operations around the clock. The impact of more tankers is more refueling booms in the sky, more refueling orbits covered, wider geographic coverage, more aircraft refueled, and more fuel provided. A “KC-135 like” aircraft takes up far less ramp space, is far more maneuverable on the ground and does not have the risk of jet blast reorganizing your entire ramp when engine power is applied.

The second requirement is survivability. The aircraft and crew must be able to compete in a threat environment that contains enhanced surface to air missiles and other significant threats. The crew must receive superior situational awareness to include automatic route planning and re-routing and steering cues to avoid those threats. They must have maximum armor protection, fuel tank explosion protection and world class chemical/biological protection. All of this means the warfighter has the requirement for a large number of highly flexible and survivable air refueling aircraft.

I also want the acquired aircraft to be integrated with the current defense transportation system. That means 463L compatible pallets; floor loaded on a freighter capable floor all compatible with the current modern airlift fleet. When I put passenger seats in this aircraft, I want to be able to use existing airlift aircraft seats and pallets. When tasked with our precious aero medical mission, I want to be able to use integral medical crew seats, onboard oxygen generation systems, more outlets and be able to use the USAF patient support pallet. I do not want to harness the USAF with the problem of going out to acquire unique assets due to a more radically sized and equipped tanker aircraft.

Now, if you look at these rather simple requirements and look at the previous offerings from industry, you might agree with me that the KC-767 more closely meets these needs than the competition. If that’s what the warfighters need, that’s what they should get.

My purpose is only to help select the right aircraft that meets the warfighter’s requirements. It is not anything else. With that thought in mind, the KC-767 -- or another that is the same size and has the same capabilities -- is the right aircraft for the USAF. Now let’s see what the new leadership of the Air Force does to obtain the right aircraft for the warfighter.

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General John Handy, USAF (Ret.) is the former commander of both Air Mobility Command, where he had responsibility for all Air Force tanker operations and US Transportation Command where he was responsible for the air, land and sea movement of all DOD personnel. He is now the executive vice president of a domestic over-ocean shipping company based in Charlotte, NC.

Ellie