US Navy awards aircraft CLS contract

Rolls-Royce was awarded a contract to provide support to US Navy aircraft engines. It is worth about $90 M and could last five years if all options are provided. Rolls Royce makes the engine for the T-45 trainer used by the Navy and the Air Force. The CLS is called “Power by the Hour”, meaning service is provided based on the use of the engines by the aircraft. Each flight hour will cost so much for the maintenance.

For more see the press release at MarketWatch.com.

Air Mobility Command General pessimistic on tanker

Gen Lichte, the commander of AMC, expressed concern with the pace of the KC-45 recompete. He is concerned that not only will there be further delays in the award, but that the loser will then protest the recompete. DoD, taking over the competition from the Air Force, had originally planned for proposal submission in August. At Boeing’s request they have delayed this until 1 October, with a goal of awarding the contract by the end of Calendar Year 2008. Boeing is asking for more time, claiming that the requirements may drive them to bid a different aircraft then the B767 previously proposed. EADS and Northrop Grumman will most likely use a proposal that is mostly like the one that won last time. They even had the first KC-45 under construction.

Business Week has an article here.

US Air Force to award CSAR-X recompete soon

In a contract that has fallen to the back burner recently due to KC-45 events, the Air Force announced that they would complete the recompete for the CSAR-X by September. Contract award would be soon after. The CSAR-X contract to replace the HH-60 PaveHawk aircraft was originally awarded to Boeing with a variant of the CH-47. Sikorsky and Lockheed Martin protested and won with the GAO ruling that the Air Force did not apply the selection criteria properly. The whole contract was recompeted with Boeing, Sikorsky and Lockheed resubmitting bids.

For more see this article at www.pressconnects.com for the Binghamton area.

Europeon view of KC-45

This article in the Deutsche Welle provides a good round up of the current on goings of the KC-45 recompete. It reiterates that despite rumors on not participating in this round Boeing went ahead and had their meeting with OSD and the Air Force to discuss the RFP. Obviously there is a great deal of interest in Germany, and Europe as a whole, for EADS to win the contract. It would be the largest to date for a primarily European based company.

Boeing may refuse to bid on KC-45 recompete

Rumors are swirling that Boeing may not bid on the new contract for the KC-45. See an article here. Supposedly Boeing is piqued that the new requirements supposedly favor Northrop Grumman and EADS and will not submit a bid. If there is only one bid it may require the whole process to start over again, of course if DoD and the Air Force change the requirements EADS could claim the same thing and the whole program will get stuck. Unfortunately DoD and the Air Force have to do the new process as GAO upheld the Boeing protest. More to come on this very complicated story.

DoD and USAF agree to recompete KC-45 contract

In light of the GAO report the USAF and DoD decided to recompete the new tanker contract. See an article here. This, like the CSAR-X, means that a whole new competition will be held. The Air Force will rewrite the RFP and Boeing and Northrop Grumman will resubmit proposals. Much of the work preparing these will be already done which will speed up the process for the bidders.

KC-45 protest summary report released

The GAO released a summary of why they upheld the protest by Boeing over the KC-45 award. See an article here. The chief reason was due to the Air Force’s failure to properly apply the criteria for source selection. Of the several reasons listed two ones that stand out is that they gave EADS credit for exceeding a requirement when they should not have, and rather than just noting the risk associated with the Boeing bid the Air Force calculated a dollar figure to overcome that risk. This alone drove up the cost proposal of the Boeing K-767 aircraft. The Air Force technically still does not have to withdraw the award to Northrop Grumman and EADS, but they would be best off reopening the competition.

Market bets on new tanker competition

EADS shares are down in Europe, and I am sure Northrop Grumman’s will also drop today. See this article. The market is assuming that the Air Force will follow the GAO’s recommendation and reopen the competition. EADS performance has been heavily affected by the delays to the A380 and the scandals with their management. Also they have labor issues as they try to sort out the French-German split and make themselves more efficient. There is still a good chance that EADS will win the new competition.

Seattle Times’ Analysis of Boeing Contract Win

In this article entitled Boeing Wins Tanker Protest, But Drama Is Far From Over, the Seattle Times states:

The saga of the Air Force refueling tanker contract is not over by a long shot, though Boeing won a huge victory Wednesday when the Government Accountability Office (GAO) comprehensively backed the company’s protest of the initial contract award.

Read the original article here.

Boeing’s protest sustained by the GAO

The GAO ruled today in Boeing’s favor on the KC-45 protest.  They decided that the Air Force failed to properly apply its source selection criteria and did not calculate some of Boeing’s costs correctly.  See a story here.  The GAO recommended that the competition be reopened.  This is what happened with the CSAR-X contract, ironically enough won by Boeing but now back in source selection.  The Air Force is not required to follow the GAO’s recommendation, but if it does not Boeing is sure to go to the Court of Appeals and Congress could make it very difficult for the Air Force to execute the contract.

GAO to decide KC-45 protest soon

This article is a good summary of the KC-45 contract. The GAO is supposed to rule on Boeing’s protest within the next two weeks. One would have to bet that they will disallow the protest. There is a chance though, that somehow the Air Force screwed up in how they applied the criteria. Then the process would be reopened again, like the CSAR-X. The article also raises the issue of the US Presidential election. John McCain was the key person that got Boeing in trouble over the attempted lease deal five years ago, and Senator Obama represents the state where Boeing now has its headquarters. Congress has also held off weighing in while the protest wound its course. It is best to think that this is not over yet.

Two DoD contracting issues coincide

This article describes efforts by the US Justice Department to investigate a non-profit charity somehow hired by the US military to do intelligence work. In a somewhat related issue it happens to be in Johnstown, PA home of many companies the creation of Congressman John Murtha (D-PA) purely used to shovel US tax dollars into the local economy. The company became noticed when it hired a gentlemen waiting to start his political appointee job in the Air Force and paid him $26 K even though he admitted doing no work for them, or anybody else for that matter. Mr. Murtha has created a network of different companies that he just earmarks funds for. A non-profit company also has the ability to be preferred for US contracts. Somehow Mr. Murtha knows all this, but contracting officers and DCMA don’t.

GPS III contract award expected by the 16th

According to this article the Air Force is expected to award the GPS III contract this week following a successful DAB a few weeks ago. Boeing and Lockheed Martin are in the running, and some are inevitably expecting a protest by the loser. Lockheed Martin won most of the GPS II work and Boeing did some of the original satellites. One hopes that the USAF acquisition people have their ducks in a row on this one as there last two major awards have been protested, and one, CSAR-X, successfully.

Hillary accused of hypocrisy on KC-45

This article explains why some feel that Democratic candidate for President, Hillary Clinton, has been accused of double standards on the KC-45 contract. The basic argument is that she is very supportive of the VH-71 contract for the new Presidential helicopter. This is also a foreign aircraft teamed with a US integrator, here Lockheed Martin. The fact that the final assembly is done in Oswego, NY as compared to Alabama has nothing to do with it she says. On the KC-45, like many Democrats, she has taken a protective stance. While not as outspoken as Barack Obama, she has made noises of disapproval of the selection of EADS over Boeing. Senator McCain, due to his rather role in the whole matter, supports the Air Force’s position. More to come, I am sure.

Looks like Australia will go with the JSF

Australia had being going back and forth on wanting the F-22 instead of the JSF. China, I am sure, has a lot to do with this. According to this story, the decision has been made to go with the F-35. America has a law preventing the export of the F-22, but Australia had asked for it anyway. There was some desire from the USAF to sell it, as every FMS sale lowers the price and the Air Force would like some more. The only way that is going to happen is to get it cheaper. So it will have to be seen if any sales overseas are made. Certainly Australia and the UK would be the prime customers for the F-22.

OSD expresses concern over protests

In this story Mr. Young, the Assistant Secretary of Defense of Acquisition, Technology and Logistics expresses concern over the recent amount of protests with large systems. Part of the story is letting Boeing know not to focus on the recent lost KC-45 award, but to look to future competitions. He also generally agreed with the recent GAO report that systems are over cost and behind schedule, but that is to be expected. Read more

Boeing sort of pushing CIA brief on EADS bribery

According to The Hill Boeing is using its lobbyists to push Members of Congress to receive a briefing from the CIA on “foreign companies” using questionable means in their attempts to win contracts. See the article here. Of note the only two Congressman to talk on the record about this were Tiahart from Kansas, a vocal opponent of the deal and a former Boeing employee and Dicks from Washington. Both have been very supportive of Boeing in their attempt to throw out the KC-45 award to Northrop Grumman and EADS. Obviously Northrop Grumman is upset that Boeing would be stooping to this. The protest result will be announced in early June by the GAO. Congress cannot do anything but de-fund the program, something they are hesitant to do as it is important to the modernization of the Air Force.

India to buy 384 light helicopters

After canceling an earlier contract for Army helicopters, India is trying it again. This time though they are buying 259 for their Army and another 125 for the Air Force. See an article here. For information on the previous contract action see this. It is expected that Bell, Eurocopter, Augusta and Kamov will bid on the contract. The Indian government had for years relied on Russian and British equipment, but is now turning to America and other nations for their procurements. Based on past other procurements we will see similar aircraft to those that were proposed for the US Army’s Light Utility Helicopter (LUH) program which was won by the Eurocopter EC-145 aircraft.

Busy day for contract awards

A great deal of contracts were announced today by DoD. See Defenselink.mil press release for more here. Highlights include a $50 M contract to General Atomics for the Air Force to buy 24 Predators and a $119 M contract to Raytheon for South Korean FMS of PATRIOT PAC-3.

Senator’s Shelby view of the KC-45 contract

This article in The Financial Times by Senator Shelby sums up the view from Alabama on the KC-45 contract award. He stresses the fact that the Air Force utilized the proper DoD regulations and instructions on requirements and source selection. Unfortunately for Boeing there is no standard for number of US jobs in these kind of selections.

Air Force to decide on F-35 depot

An interesting part of the entry of any new equipment into service is where to have its depot? If the military is using their traditional three level maintenance program the system will require a depot. According to this short article in The Salt Lake Tribune it sounds like the Air Force’s depots, here Hill in Utah, are competing to get the F-35 Joint Strike Fighter (JSF) work. Read more

Congress begins political war to overturn KC-45 decision

Based on this story run in The Hays Daily News, Senators and Congressmen from the losing states are beginning the process to use politics to overturn the KC-45 award to Northrop-Grumman and EADS. Unfortunately there are Senators and Congressman from the states that stand to gain from the award. Read more

Loren Thompson on why Boeing lost

In this article in The Seattle Times, noted aerospace analyst Loren Thompson explains why Boeing lost to Northrop-Grumman and EADS. Basically, the 767 wasn’t competitive. Read more

Reaction to the KC-X award

Here are some links that are commenting on the win by Northrop Grumman and EADS.

http://www.aero-news.net/ - KC-45A Wins Deal Over Boeing’s KC-767 Note: I think no matter what aircraft was chosen it would be called the KC-45A.

Wichita, KS News on MSNBC - Key phrase from Sen Roberts of KS: “”I am deeply troubled by the Air Force’s decision to award the KC-X tanker to a French company that has never built a tanker in its history. We should have an American tanker built by an American company with American workers. I can not believe we would create French jobs in place of Kansas jobs.”

Seattle Post-Intelligencer - “Tanker award caps tumultuous period” - Good round up of the history of the KC-X program.

Leeham Company LLC Analysis by Scott Hamilton - “Boeing will be out of the tanker business for the next 20-40 years if it loses the KC-45A
award, its spokesman predicted, which helps explain why Boeing is fighting so hard to win the competition.”

Oh yeah, how they feel at Northrop Grummand and EADS: http://www.youtube.com/watch?v=YX5oqEfAydg

Air Force awards KC-X to team of Northrop Grumman and EADS

The Air Force announced today that the Northrop Grumman and EADS team won the KC-X contract. News story is here. This is a huge decision and marks a major change in US defense policy. Read more

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