Now Reports That EADS May Bid After All

There is a rumor that the Pentagon may delay the deadline for submission of a proposal for the KC-X to accommodate either a solo bid or another partnership. This contradicts what was reported yesterday that EADS-NA CEO Sean O’Keefe said the company wouldn’t bid without Northrop Grumman (NOC). It will be seriously difficult for the company to bid by itself. It would need to find another U.S. company to work with.

This might be second thoughts by DoD as they realize how difficult doing a single bid contract award will be. This is not a sole source contract but right now it would only receive one qualified offer.

EADS-NA Says Not Comfortable Priming KC-X Contract

Aviation Week is reporting that EADS-North America felt it needed an partner on the KC-X contract as it was not comfortable being the prime for such a large effort. While EADS has experienced some decent growth in the U.S. it still has a fairly lean organization.

The company was confident that they could provide to Northrop the basic airframes on cost and schedule. Northrop would have then been responsible for the necessary military modifications. EADS would have had to find a partner in General Dynamics, Raytheon or Lockheed Martin. There would be few large contractors available in the U.S. with the past experience to support a contract of this size.

Reports That Northrop Won’t Bid

It is being reported that Northrop Grumman (NOC) will not submit a proposal in response to the new KC-X RFP released at the end of last month. Supposedly the announcement will be made after the markets close. Northrop had written to the DoD in December saying they most likely would not without changes in the RFP to make it fairer to the Airbus 330 based aircraft.

There is no word on whether EADS will find another partner or bid by themselves for the $35 billion contract.

Boeing Will Submit Proposal Based on K-767

As it did in the last contest two years ago Boeing (BA) plans to submit a 767 based tanker. This is similar to the ones they are already building for Japan. To differentiate it from previous versions they are calling it a “NewGen” aircraft. Boeing will upgrade the basic 767 design with a new fueling boom and parts of the 787 cockpit technology.

There is still no formal word from Northrop Grumman (NOC) or EADS (EADS:P) if they plan to submit a proposal this time around.

EADS Supports Bid For KC-X

It is being reported by various sources that EADS is pressuring Northrop Grumman to go ahead and submit a bid for the new KC-X RFP. Northrop had informed the Government that they planned not to if the terms were not significantly changed. They felt the RFP was favoring Boeing’s cheaper, smaller KC-767 aircraft.

The final RFP came out two weeks ago and still no word from Northrop that they will go ahead and submit something in May. EADS obviously would like another chance to win the contest after they lost the last one to Boeing’s protest in 2008. The $35 billion would go a long way to make up for the lost A400M revenue.

As Expected Alabama Press Critical Of Air Force RFP

Writing in support of Northrop Grumman and the “Mobile region” the Mobile Press-Register has and editorial summing up the situation on the new RFP from their view. They do not demand that the RFP be changed or the contract be given to Northrop and EADS but they do point out that:

“If Northrop pulls out of the contest, Boeing may get the tanker contract, but the entire deal will be tainted — first by Boeing’s own corruption and collusion with some Pentagon officials several years ago over an earlier version of the tanker deal, and second by a decision-making process that puts politics above defense needs.”

It is true that a single bid competition is not much of a competition.

Alabama Senators Not Happy With New RFP

In an article in The Mobile Press Register Senators Shelby (R-AL) and Sessions (R-AL) make it clear that they are not happy with the new RFP. Shelby says “The final RFP discredits the integrity of the entire process,” and Sessions seems to feel that Northrop Grumman (NOC) won’t bid. He laments the lack of competition in the process.

This of course is not a surprising reaction as Northrop and EADS planned to assemble the basic A330 aircraft in Mobile, AL and then integrate the military systems at a Northrop facility.

KC-X RFP To Be Released Soon

The Federal Business Operations “FedBizOps” website posted a presolicitation notice yesterday stating that the final RFP for the KC-X will be posted no earlier than 23 February. The draft RFP had been released in September last year. Since then it has been updated and modified several times.

Most recently the latest set of questions and answers were posted on January 27th. The two big issues are how much the final RFP has changed from the draft one and whether Northrop Grumman (NOC) and its partner EADS will bid on the contract. The turn around time for a proposal may be fairly quick as this is the second competition in three years and the draft RFP has been out for six months.

Senator Shelby Freezes Obama Nominees Over KC-X

It has been reported that Senator Shelby (R-AL) has placed a hold on every nomination made by President Obama that must be confirmed by the Senate. This means that without a vote of over 60 Senators the nominations cannot be considered. Putting a hold on specific individuals is not uncommon but the use of the “blanket hold” is. Reportedly Shelby is upset about progress on the KC-X RFP as well as plans to build a new national Explosive Ordnance Disposal (EOD) school at Redstone Arsenal in Huntsville, AL.

Shelby had been a Democrat until the election of Bill Clinton when he switched parties. It would be hard to believe that this broad attack will force any changes to the RFP to make it more attractive to Northrop Grumman (NOC) and EADS (EADS:P). It will also be hard for Shelby to sustain this kind of action for long.

EADS Deadline For A400M Will Pass With No Resolution In Sight

It looks like EADS and its European customers will not meet there goal of resolving the A400M by the end of January. The company has threatened to...

Support For Northrop Not Bidding On KC-X

Northrop Grumman and its partner EADS threatened a few weeks ago not to participate in the next attempt at buying a new tanker for U.S.A.F. Many feel that this is just a negotiating ploy to have the terms of the RFP changed to make it easier for Northrop to win. The company has expressed concern that the way the RFP is written now it will favor Boeing to the point that Northrop sees no reason to bid.

The U.S.A.F. and DoD need to attract multiple bids. They cannot go through with the program without some sort of competition. Now it has been made clear that both the Board of Directors of Northrop, stock analysts are shareholders are supportive of the plan not to propose. One would think that there should be an attempt to win $35 billion of work but the goal of Mr. Bush, the new CEO, and his supporters is to increase the margin and profitability of the company. This means he and his supporters want to concentrate on getting work and getting it done.

The KC-X program in its third iteration faces some problems. The chance of a protest by either losing side is high. Both teams have supporter in Congress. The program may be hard to get up-and-running with so much politics involved. If Northrop feels there is little chance of them winning this contract again or quickly making money off of it then they should not proceed.

A400M Progressing In Flight Tests But Not Negotiations

While the A400M slowly collects flight test data talks to save the troubled program continue. Negotiations are ongoing between EADS and the seven...

KC-X Tanker RFP Out In February

At a recent press availability the U.S. Air Force Chief of Staff, General Schwartz, said that he expects the final RFP for the KC-X contest to be released next month. He also stated that it will be little changed from the draft RFP. Both Northrop (NOC) and Boeing (BA) have been submitting questions and comments on the draft RFP and some of these will be addressed in the final one. The RFP will be released a few weeks after the 2011 Defense Budget goes to Congress which is planned for 2 February.

Schwarz did say that the final RFP may have changes based on recent comments by Northrop and its partner EADS (EADS:P) that they might not participate as they felt the RFP favored Boeing too much. Both groups had also commented on the use of a fixed price development contract and how it transferred too much risk to the contractor from the Government.

Framework Seems To Have Been Reached To Allow A400M Resolution

Late last week it was announced that EADS and the customers for the A400M transport seemed to have reached a framework to allow talks to proceed that may resolve the funding issues with the program. Due to about two years of development and integration problems the aircraft only achieved first flight in December, 2009 and now will not deliver the first aircraft until 2012. These have caused EADS and its subsidiary Airbus to spend billions beyond the money planned.

The company is trying to work a deal where the customers pay a large portion of the overruns as the initial contract was a Fixed Price one that did not provide enough funding to cover the delays. EADS has spent over five billion Euros of its own money on the program and is hoping that either through price increases or direct investment the seven major European buyers will cover these costs. Recently EADS had threatened to just go ahead and end work on the program and eat the losses rather then continuing it and losing more money.

After a recent meeting it became clear that most of the countries involved are willing to work out some financial deal with EADS and that company will agree to continue talking. There will be a meeting in early February to begin these discussions. The compromise being discussed would see increased production prices and lower quantities for a few years with EADS absorbing some of the cost overruns internally. Then there would have to be a decision point in the future whether to complete the program’s planned total quantity. One of the two FMS customers, South Africa, already canceled their order due to the price increases proposed by EADS.

The A400M is the premier military aerospace program in Europe and it suffered from the optimistic plan to use a fixed price development contract. Not completing it would be seen as a blow to EADS and European defense integration. At the same time all of the customers are facing financial pressure due to the global downturn and increased social spending. At the same time building only a few of the aircraft solves nobody’s problems.

A400M first flight video from signatoryvideos. http://www.youtube.com/watch?v=oX-kIUYRyDk

Northrop And EADS Wait On Final RFP Release

The KC-X Tanker RFP is expected to be released in the next few weeks. Previously Notthrop and its partner EADS had threatened not to participate as they felt the draft RFP was biased in favor of Boeing. Now they are saying they will wait and see what is in the RFP when it is put out. It is in the best interest of the Air Force and the U.S. Government to receive multiple bids on the project.

Without competition the chance of this third attempt proceeding will be difficult. Sole sourcing the contract to either Boeing or the Northrop team will cause an outcry in Congress no matter what as both companies have their supporters. Not putting out a competitive RFP will only lead to protests and further delays in what has become a critical program to replace the aging KC-135 aircraft.

We are all going to have to wait to see what the Air Force puts out and how Northrop, EADS and Boeing respond to it.

EADS Threatens To End A400M

With negotiations to change the contract for the A400M transport at a standstill EADS is threatening to end the program themselves. This means...

Alabama Keeps Pushing The Air Force

Supposedly in a meeting between DoD and Air Force officials with members of the Alabama Congressional delegation it came out that the U.S.A.F. will adjust the KC-X RFP to keep Northrop Grumman (NOC) and EADS (EADS.P) in the competition. This of course is a report by Senator Sessions (R-AL) from the meeting. There is no official response as to how the U.S. officials will react to Northrop’s threatened non-participation.

It is in the best interest of the U.S. Government to have two bidders for this program and this may be a necessary step to assure that.

Presumed Bidders Meet With Air Force

It has been reported that last week Boeing (BA), Northrop Grumman (NOC) and EADS (EADS.P) had a series of meetings with the Air Force to discuss the draft KC-X RFP and the final one. After these meetings EADS and Northrop made clear that their threat not to submit a bid without changes to the RFP language was not an idle negotiation ploy as some have said. The companies believe that the current RFP is biased towards the smaller, cheaper Boeing 767 rather then the larger Airbus 330.

The discussions also indicate that the final RFP will come out before the end of January. Without two bidders it will be hard for the Air Force to proceed so they need a proposal from Northrop and EADS. At the same time they must have an RFP that will hopefully be protest proof and get the needed capability quickly.

Split Buy Again?

One of the solutions that has been mooted to solve the KC-X issue is to buy aircraft from both Boeing (BA) and EADS (EADS.P). This would certainly eliminate many of the issues around the source selection. The Defense Department and Air Force have not supported this idea in the past due to the logistical costs related to operating two dissimilar aircraft. Of course the problem the Air Force faces is that the KC-30 and KC-767 are too dissimilar.

Some in Congress and in the industry suggested the split buy last Summer and now it has been raised again. If Northrop Grumman (NOC) does refuse to submit a bid then the contest is on hold unless there is the will to do a sole source contract again. The split buy would solve that issue and keep Northrop playing.

We will have to see how this plays out.

Northrop Congressional Supporters Continue Harsh Words

Last week Northrop Grumman (NOC) and its partner EADS (EADS.P) wrote a letter to the Defense Department stating that they are not interested in bidding on the KC-X contract if the current RFP language stands. Their argument is that it is currently biased towards a smaller aircraft which means that it is set up to give Boeing the contract. In their eyes there is no reason to go through the motion of bidding just not to win.

This of course caused all sorts of critics to rise up and claim that Northrop was trying to force the Government to bias the RFP and contract towards Northrop. Basically this is an attempt to blackmail the Government. The problem the Air Force has faced is that they need to write a RFP that gets them the best value bid meeting all of its requirements and is done in such a way that no protest occurs. This is proving difficult to do. The two aircraft, KC-767 or A330, are dissimilar enough that the requirements have to be carefully chosen. At the same time there is a great deal of pressure in Congress to support American companies and products. This is the state that the U.S. has gotten itself into by allowing only one major source of aircraft of this size to remain — Boeing (BA).

Now Northrop’s supporters in Congress are striking back. In a recent editorial the Congressman for Mobile, AL where EADS will assemble the aircraft, Jo Bonner (R-AL), writes that it is unfair to tar Northrop. In his eyes the Government is going out of their way to award a sole source contract to Boeing. This violates the spirit if not the law on contracting. He writes “And the reason Northrop Grumman, and its partner EADS, was not playing a game of chicken is because the draft RFP, released by the Air Force in September, has been all but written to guarantee the pre-selection of the smaller, older and much less capable Boeing 767″.

That is the crux of the problem. The Government lost the last attempt to award the contract competitively. Their attempt to let a sole source lease to Boeing before that was overturned by Congress. This next round doesn’t look good either. There is a crying need for this capability and it lags because of politics, industrial policy and poor management.

Pro-Boeing Legislators Want Air Force To Penalize EADS

Several Representatives and Senators from states where Boeing (BA) would do much of the work if they won the KC-X tanker contract are pushing the Air Force to either exclude outright EADS (EADS.P) or place a cost factor on their bid. This is all due to the World Trade Organization (WTO) draft ruling that the company received illegal subsidies from several European governments. Supporters of the Northrop Grumman (NG) and EADS say that the ruling is draft and not finalized and should not apply in this competition.

If there was such a move by the Air Force it would significantly reduce the competition in the contract process. It would make the Air Force award the contract to Boeing as the other bid would not be competitive. Of course this is what the legislators want, but a sole source award to Boeing probably would not be palatable to others in Congress or the Department of Defense. There should be at least two bids for each contract and this one is limited to Boeing, EADS and possibly the Russian company Ilyushin. Chances are that a Russian aircraft would not be chosen no matter how cost effective it is. This leaves the U.S. in a very limited position with the KC-X.

This kind of fighting can be expected to go on for the next several months to after the contract award and resolution of any protest.

EADS Facing Pressure Over A400M

There are reports that France and Germany are discussing holding EADS, the parent of Airbus, to their contract for the A400M military transport....

EADS Continues Efforts To Gain Support Of Tanker

It has been reported that EADS spent almost $200,000.00 last quarter on just tanker related lobbying. It is not uncommon for larger companies of all sorts to spend time in Congress working to support their programs and proposals.

The KC-X contract being so important this effort will be even more concentrated. EADS work with its supportive Congressional members has already worked out well especially with the delegation from Alabama. Support like this will be key as the RFP goes final, proposals are submitted and the source selection works its course. The next quarter reports should show similar numbers.

Northrop Grumman And EADS Keep Pressure On

Northrop Grumman and EADS continue their preparation of the battlefield by criticizing the draft RFP put out by the U.S. Air Force a month ago. They believe that by focusing on cost as the prime discriminator in the award that it is biased against their possible proposal. In The Miami Herald article here there representative described the situation: “This is tantamount to a cost shootout that accelerates the race to the bottom,”. They have already received support for this view from some in Congress.

See this to continue on until the contract is awarded.

Northrop Threatening No Participation Over Cost Data

Yesterday Northrop announced that it is considering not participating in thew new KC-X competition. They are concerned that the the way the price requirement is structured may not be fair to them. They are also pursuing the complaint that their cost data was provided to Boeing during the protest of the last award and want access to the same information.

If Northrop and EADS don’t submit a bid it will be hard to get actual competition on the contract. That would leave just one submission, Boeing, or perhaps two from them if they go the route of having a 777 as well as a 767 proposal. This situation would make it hard for the Air Force to proceed.

The chances of Northrop doing this is low and the Department of Defense realizes it. This is the largest procurement coming down the road and both EADS and Boeing need the work. Of course if there is really a belief that their bid cannot win no matter what then Northrop should just save the money and not prepare one. This is only the draft RFP so the next year or so should be interesting.

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  • Boeing Can’t Be Seen As Taking Advantage Of Being Sole Bidder
  • Boeing Completes Preliminary Design of Free Electron Laser Weapon System
  • House Armed Services Committee: Hearing on the FY 2011 Budget Requests from the U.S. Southern Command and the U.S. Northern Command
  • House Armed Services Committee: Skelton Statement on Anniversary of Iraq Invasion
  • JHPSSL Program Receives Acclaimed Laureate Award From Editors of Aviation Week and Space Technology Magazine
  • Boeing Receives Additional Contract for Joint Helmet Mounted Cueing Systems
  • Lockheed Martin F-35 Joint Strike Fighter Succeeds in First Vertical Landing
  • House Armed Services Committee: Skelton to Introduce Legislation to Protect TRICARE
  • DOD CONTRACTS for March 18, 2010
  • Today in the Department of Defense, Friday, March 19, 2010
  • Contracts for March 18, 2010
  • Northrop Grumman Begins Installing First EHF Satcom Hardware on B-2
  • Raytheon Missile Systems Establishes Air and Missile Defense Systems Product Line
  • U.S. Department of Energy Selects Lockheed Martin to Advance Ocean Thermal Energy Conversion Utility Power Plans
  • Raytheon Awarded $12 Million for Patriot Missile Field Surveillance Program
  • Northrop Grumman Names Janis Pamiljans Vice President of the Navy Unmanned Combat Air System Program
  • Northrop Grumman Names Steven L. Enewold Vice President of Broad Area Maritime Surveillance Unmanned Aircraft System Program
  • House Armed Services Committee: Hearing on the FY 2011 Budget Requests from the U.S. Central Command, U.S. Special Operations Command, and U.S. Transportation Command
  • DOD CONTRACTS for March 17, 2010
  • Northrop Grumman Awarded Planning Contract for the Refueling and Complex Overhaul of USS Abraham Lincoln (CVN 72)
  • Today in the Department of Defense, Thursday, March 18, 2010
  • National Guard (In Federal Status) And Reserve Activated as of March 16, 2010
  • Contracts for March 17, 2010
  • India, the New Land of Opportunity for Defense Contractors
  • Sage [Grouse] Decision: Why the Feds Refused to Flip the Bird at Power Players
  • Today in the Department of Defense, Wednesday, March 17, 2010
  • DOD CONTRACTS for March 16, 2010
  • US Navy Flag Officer Announcement
  • USAF General Officer Announcement (REPOSTED)
  • DOD Senior Executive Service Appointments and Reassignments
  • Contracts for March 16, 2010
  • Northrop Grumman Delivers 500th Directional Infrared Countermeasures System
  • Lockheed Martin Awarded Task Order for Continued Production of Symphony IED Jammer Systems
  • General Dynamics Advanced Information Systems Awarded $31 Million Navy F/A-18 Mission Computer Contract
  • Lockheed’s JSF is Overdue, Over Budget – and Too Big to Fail
  • Norad Flight Exercise Planned For Washington, D.C.
  • Deputy Commanding General (Support) to Brief Live from Iraq
  • Contracts for March 15, 2010
  • Krauss-Maffei Wegmann (KMW) Pinpoint Protection for Afghanistan
  • Marinette Marine Facility Expansion to Enhance Lockheed Martin’s Littoral Combat Ship Program
  • FI Report: Near-Term Growth Expected in Medium/Heavy Military Rotorcraft Market
  • General Dynamics Itronix Launches New GDAssure(TM) Program that Certifies Customer Computer Systems Prior to Installation
  • Lockheed Martin Delivers Innovative Full-Motion Video Intelligence System to USJFCOM
  • General Officer Announcement
  • USAF General Officer Assignments
  • USMC Flag Officer Announcement
  • Christopher Gregoire Named Lockheed Martin Vice President and Controller
  • DOD CONTRACTS for March 15, 2010
  • Today in the Department of Defense, Tuesday, March 16, 2010
  • Now Reports That EADS May Bid After All
  • General Dynamics Awarded $9 Million Contract for U.S. Army Medical Command Lean Six Sigma Support
  • Lockheed Martin Delivers 1,000th Vertical Launch ASROC Missile
  • Raytheon’s Excalibur Ib Demonstrates Accuracy During First Guided-Flight Tests
  • James Webb Space Telescope Core Completes Thermal Testing
  • Sniper ATP Demonstrates Enhanced ISR Capability at Empire Challenge
  • CNO Announces Flag Officer Assignments
  • DOD CONTRACTS for March 12, 2010
  • DOD News Briefing with Ashton Carter from the Pentagon
  • Northrop Grumman Holds 3rd Annual International CEESIM Users’ Conference in the United Kingdom
  • Lockheed Martin Awarded $23 Million for Production of JASSM-Extended Range Test Missiles
  • Northrop Grumman Delivers Upgraded U.S. Navy Targets
  • U.S. Army Receives First Lockheed Martin EQ-36 Counterfire Target Acquisition Radar System
  • Manufacturing of Northrop Grumman’s First Low-Rate Initial Production E-2D Advanced Hawkeye Begins
  • Raytheon and National Geospatial-Intelligence Agency Improve Flow of Commercial Imagery to Analysts and Warfighters
  • Lockheed Martin Receives $60 Million Worldwide LANTIRN Depot Award
  • General Dynamics Awarded Department of Homeland Security National Communications System Contract
  • Northrop Grumman Plays Major Role in NASA’s Development of Alternate Astronaut Escape System
  • Government of Canada Names General Dynamics Land Systems-Canada as Prime Contractor for LAV III Upgrade Program
  • Northrop Grumman’s Second E-2D Advanced Hawkeye Enters Next Phase of Flight Testing
  • Optex Systems Receives $3.4 Million Purchase Order from General Dynamics Land Systems
  • Raytheon Completes Critical Milestone for Mobile X-band Radar System
  • General Dynamics Awarded $22 Million by U.S. Navy for Repair Work on USS Hartford
  • Military Base Realignments and Closures: DOD Needs to Update Savings Estimates and Continue to Address Challenges in Consolidating Supply-Related Functions at Depot Maintenance Locations. GAO-09-703, July 9
  • House Armed Services Committee: schedule for the week of July 13 –17, 2009
  • GAO Report: Overseas Contingency Operations: Reported Obligations for the Department of Defense. GAO-09-791R
  • Raytheon’s AESA Radar for Boeing F-15E Receives New Designation
  • Northrop Grumman Successfully Demonstrates Capabilities of LITENING Targeting System on U.S. Navy F/A-18E/F
  • Raytheon’s GBU-53/B Small Diameter Bomb II Completes Risk Reduction
  • Hawker Beechcraft, Lockheed Martin Team to Compete for U.S. Air Force Light Attack and Armed Reconnaissance Aircraft
  • Lockheed Martin C-5M Super Galaxy Sets World Aviation Records
  • Northrop Grumman Advanced Composite Mate Joint Passes Stringent Tests for NASA’s Composite Crew Module Demonstration Program
  • Lockheed Martin Team Passes Critical Design Review for Solar Ultraviolet Imager for GOES-R Satellite Series
  • UK Awards Javelin Joint Venture $176 Million for Javelin Missile Rounds
  • Contracts for March 12, 2010
  • Lawsuit Successfully Defends Contract Against Inroads of In-Sourcing
  • Two Helicopter Programs Start Over
  • EADS-NA Says Not Comfortable Priming KC-X Contract
  • Spirit AeroSystems Named to Boeing Tanker Supplier Team — Press Release
  • Contracts for March 11, 2010
  • Northrop Grumman Names Paul Russell to Lead Space Navigation Business Area
  • Northrop Grumman Awarded U.S. Army Europe Linguist Contract
  • Aegis Weapon System Tested During International Multiple Ship Demonstration
  • Raytheon, Motion Reality Ink Agreement For Virtual Applications
  • Lockheed Martin Awarded Arizona Support Center Contract for M-TADS/PNVS
  • Lockheed Martin and Aegisound Honored With Defense Department’s Nunn-Perry Award
  • GeoEye Selects Lockheed Martin to Build Next-Generation Commercial Remote Sensing Satellite System
  • STOVL Jet Prepares for Vertical Landing
  • DOD CONTRACTS for March 11, 2010
  • US Navy: Flag Officer Announcement
  • US Army: General Officer Announcement

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