Congress, the media and the KC-45 award

March 9, 2008 by Dagpotter
Filed under: Boeing, Contract Awards, EADS, Northrop Grumman Corp., U.S. Air Force, commercial aviation, logistics, production program 

I made the mistake of watching Lou Dobbs on CNN this Saturday who had a rant about the KC-45 award to Northrop Grumman and EADS. The only guest he had on was the head of the machinist union from Boeing who was obviously not unbiased. He had no guest from DoD or Northrop to talk about the award. It was clear that Mr. Dobbs does not understand how DoD buys things. Here is the video from Mr. Dobbs blog on this issue. There are Federal law and regulations, and DoD regulations that govern how the military must procure things. In DoD the key first step is the writing of and approval of requirements. These Key Performance Parameters (KPP) are the minimum requirements that a system must meet. The next step is writing a Request for Proposal (RFP). This provides the companies interested in bidding on a contract the requirements and the data they need to cost the program. They then submit a proposal that lays out the technical solution to meet the requirements and provides data on cost and past performance. For the KC-45 tanker contract there are only two Western companies that could bid on it - EADS and Boeing. McDonnell Douglas, who built the last tanker the Air Force bought in the Eighties, the KC-10, is now part of Boeing. The Source Selection Board that reviewed the proposals was looking for the solution that met the requirements at the best cost to the government. Some contracts are lowest price, but most contracts like this one are “best value”. By forcing the Air Force to have a competition, which Congress did after the Druyan scandal, meant that either EADS or Boeing would win. It seems that EADS offered the best value, and thus won. Mr. Dobbs needs to do some research before spouting off on this. If Congress wants to make the DoD budget a jobs program they can do so. They just need to throw out everything and choose the contracts themselves. Please raise your hand if you think that that would deliver to our forces the best systems and the best price.

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