Monday
Mar312008
Conservative coalition calls for oversight of tanker contract
Monday, March 31, 2008 at 3:47PM
At a press conference at the National Press Club coalition of conservative think tanks expressed their concern over the Air Force's award of the aerial tanker refueling plane contract to the European Aeronautic Defense, and Space consortium. Participants were Frank Gaffney of the Center for Security Policy, who was also a Deputy Assistant Secretary of Defense under Reagan. George Landrith of Frontiers of Freedom and Colin Hanna of Let Freedom Ring, Jim Martin the National Defense Council Foundation and 60 Plus.
The speakers express their concern with the recent award of a tanker contract to a European based defense contractor EADS instead of the American aerospace company Boeing. They said that the current tanker fleet dates back to the Eisenhower administration and that because the new tanker will last as long, they are concerned with the American military "marrying" into a European company with a potential for conflicting national security interests. They called on Congress to exercise their oversight in the event that the Government Accounting office does not rule against the Air Force decision.
They coalition also alleged that the Department of Defense changed the requirements for the tanker in the middle of the bidding process to ensure what Frank Gaffney called "competition über alles." Gaffney said that the Air Force was disregarding the requests of warfighters and that the bidding process amounted to a "bait and switch."
One of the first questions was whether the think tanks involved in the coalition received money from Boeing. Only the Center for Security Policy has received money from both Boeing and Northrop Grumman (the American subsidiary of EADS) in the last calendar year.
When asked about the the coalition's position on John McCain's role in the bidding process and McCain's possible interest on behalf of EADS, Gaffney said that while he is personal friends with McCain, he disagrees with him in this respect. He mentioned a correspondence sent from John McCain to Robert Gates, before Gates' confirmation as secretary of defense, saying that it encouraged competition over all without respect to the requirements of the warfighter.
Gaffney said that while he is unsure of the intentions of those working with John McCain who have lobbied in the past for EADS, that McCain's emphasis on competition contributed to the "delay of game" that is keeping replacement tankers from the force, which Gaffney said concerns him on a national security level.
The speakers express their concern with the recent award of a tanker contract to a European based defense contractor EADS instead of the American aerospace company Boeing. They said that the current tanker fleet dates back to the Eisenhower administration and that because the new tanker will last as long, they are concerned with the American military "marrying" into a European company with a potential for conflicting national security interests. They called on Congress to exercise their oversight in the event that the Government Accounting office does not rule against the Air Force decision.
They coalition also alleged that the Department of Defense changed the requirements for the tanker in the middle of the bidding process to ensure what Frank Gaffney called "competition über alles." Gaffney said that the Air Force was disregarding the requests of warfighters and that the bidding process amounted to a "bait and switch."
One of the first questions was whether the think tanks involved in the coalition received money from Boeing. Only the Center for Security Policy has received money from both Boeing and Northrop Grumman (the American subsidiary of EADS) in the last calendar year.
When asked about the the coalition's position on John McCain's role in the bidding process and McCain's possible interest on behalf of EADS, Gaffney said that while he is personal friends with McCain, he disagrees with him in this respect. He mentioned a correspondence sent from John McCain to Robert Gates, before Gates' confirmation as secretary of defense, saying that it encouraged competition over all without respect to the requirements of the warfighter.
Gaffney said that while he is unsure of the intentions of those working with John McCain who have lobbied in the past for EADS, that McCain's emphasis on competition contributed to the "delay of game" that is keeping replacement tankers from the force, which Gaffney said concerns him on a national security level.
Reader Comments (4)
Yawn. And there's just as many 'conservative' groups against mucking up the current award. These people have to learn the very large difference between what's best for the country and what's best for Boeing.
Boeing 'tanked' on their bid. What's their motive for doing better next time if they can always cry and get a free 'do-over'?
The Northrop Grumman Tanker win brings EADS capabilities to America with an addition of an assembly-plant in Mobile, Alabama. This win increases the US influence on how EADS conducts business. It has been shown that there is no negative impact to national security in giving this contract to NG/EADS. In comparison, there is far more risk to national security by Boeing sales to foreign countries. Therefore, the only reason congress would dare to override the Air Force's fair competitive process by protecting Boeing's corporate interests above the Air Force, and US taxpayer's interests, is to appear as pro-American. In reality, such a decision would be as anti-American as the former USSR's anti-competitive philosophies of the past.
So, how much marketing $$$ does Boeing give CNBC ? Do you think there might be a little bias there ?
Check out more Boeing "dirty pool" on another military contract, http://thehill.com/business--lobby/company-questions-air-force-contract-with-boeing-2008-03-13.html
Both contractors made numerous public statements on how transparent and complete the process was. Boeing was delighted with the process until they lost; they basically just assumed they would win.
Boeing keeps saying they would have proposed the 777 "if only they had known". They could have proposed both the 777 and the 767 if they wanted too. The 777 is dramatically larger than the A330, and much more expensive, plus they have a huge commercial backlog and could never have delivered on time. They’ve always know what Northrop was proposing, they are now acting like Northrop’s entry was a surprise to them. This isn’t the first DOD contract Boeing has bid on, give me a break, they know how to bid. They just apparently don’t know how to win, other than crying to their political hacks.
Boeing must think everyone is stupid enough to believe their bull about the fuel utilization of the 767, with fuel prices rising they have tried to spin fuel efficiency. In fact the A330 tanker carries 26% more fuel than the 767, so of course it would burn more fuel to deliver a full payload. The Northrop Grumman Tanker is more fuel efficient per gallon of fuel delivered to the war fighter. That is the parameter which the Air Force used in the competition, and Boeing knew that. One of the reasons that commercial airlines choose the A330 over the 767 is its fuel efficiency.
Boeing doesn’t really even care about the Tanker Contract; its small potato’s compared to the commercial business. After driving Lockheed out of the commercial aircraft business and buying McDonald Douglas, and then systematically closing their commercial assembly lines, they have achieved monopoly status in the US. Another wide body assembly line in the lower cost South East has Boeing sweating bullets. Boeing gets the message big time! They may have an American made commercial airliner business to compete with again. That’s what this is about. The Tanker contract is big, but it’s only 20 planes a year, Boeing sell’s 500 planes a year to the airlines they don’t want competition in the US again.
EADS has already announced they will produce commercial A330 freighters in the Tanker facility. Boeing may actually have to compete and the US industrial base will expand. There will actually be 3 places in the world where commercial wide bodies are assembled 2 of them in the US again.
When Northrop announced, and then quickly retracted, that the contract would actually be in-sourcing 1500 jobs from Europe they were talking about the A330 freighter work. EADS had a fit because the Germans, French and Britt’s might actually realize that they are not competitive with the facilities and workers Northrop and EADS are establishing in Alabama.
Because of the Dollar/Euro exchange rate, any work done on an aircraft in the US saves 40% in labor costs on the finished product. This is not even counting the lower labor cost in the US compared to the European welfare states. This is in-sourcing jobs to the US. EADS has an incentive is to do as much work here as they possibly can; not because they love America, but because it reduces the cost of the finial product. American subcontractors will actually be able to compete for more of the piece part work because of the favorable exchange rate. For once we are the lower cost market. Northrop’s 2nd and 3rd Tanker contract bid’s in a few years will in all probability have even more American content than this one, Boeing’s is likely to have less since all of their new commercial line are heavily outsourced. Boeing will not have that drum to beat anymore.
What Boeing won’t tell you is that they have outsourced more than 50% of their commercial aircraft business. The only reason the 767 has 85% domestic content is because the line is shutting down due to lack of commercial orders. If Boeing had offered the 777 it would have had less domestic US content than the A330. A large portion of the high tech 787 is manufactured in Japan including the wings! There is not very much high tech work in building a 20 year old 767 design. Wake up; the political hacks in Washington State are the ones whining the loudest. Less than 10% of A330 Tanker work is French, Boeing doesn’t mention that the major portion of the foreign content is from the UK one of our best allies. All of the militarization work will be done in Northrop’s new facility adjacent to the EADS assembly building. Northrop’s engineering work will be done in Melbourne Florida.
Why the Northrop Grumman KC-45 is the right plane for our Air Force:
In the last five tanker competitions; (Australia, UK, UAE, Saudi Arabia, and now the US) the KC-45 beat out the KC-767. Can all five air forces be wrong and Boeing be right? By the way Boeing did not protest any of the previous loses. What’s the reason for this? Because the Tanker contract will establish a new production capacity in the South East; which will threaten their monopoly in the commercial market?
Debates over airfield numbers and "bare base operations" are of little relevance to Air Force tanker concepts of operations. The tanker mission is to deliver fuel to receivers and suitable bases must have large stocks of fuel. In the past, Air Mobility Command has used about 70 airfields worldwide that meet its tanker basing requirements. Both the KC-767 and KC-45 can operate from all these airfields, but the KC-45 can launch with 20% more fuel and has better takeoff performance. Launching with more fuel means it can fly farther, stay on station longer, and refuel more receivers per sortie. That's one of the reasons why the Air Force and four other air forces chose the KC-45.
Boeing states that critical assumptions were changed to favor the larger KC-45, this is not true. No assumptions were changed after the final RFP was released. The Air Force released a series of draft assumptions before the final Request for Proposal and solicited input. For the final RFP, the Air Force elected to use realistic warfighting assumptions for parking and fuel loads. Both the KC-767 and KC-45 are multi-mission, medium-sized aircraft that can execute both aerial refueling and airlift missions. For the refueling mission, the KC-45, offers better takeoff performance, greater offload, better fuel efficiency, and longer range, it is clearly superior to the KC-767. When needed as an air lifter, the KC-45 offers significantly greater capacity.
On the issue of risk, Boeing bears the responsibility for their poor score. The aircraft Boeing proposed to the Air Force, the KC-767AT is not the same plane it sold to Japan and Italy, (two and five years behind schedule respectively). These foreign KC-767s carry only 160K lbs of fuel, which is 20% less than the current KC-135, which would have not met the minimum fuel payload requirement in the Air Force RFP. The proposed KC-767AT combines the wing, fuselage, and landing gear from different KC-767 models and has never been built, flown, tested, or certified. It uses a new engine never used on a B767 before. Boeing proposed integrating a digital cockpit with the old hydraulic flight control system, which historically has led to problems. They have not started boom development, and continue to have problems with their drogue pods. The AF concluded that Boeing's proposed development plan posed greater risks than Northrop’s plan. Boeing stated in their risk assessment that their offering reflected "inherent manufacturing genius”, yes they actually said that.
In contrast, Northrop has already built and tested the first Air Force tanker on its own nickel. That aircraft stands ready for final modification in Melbourne Florida. Northrop's boom has been tested and passed fuel. The KC-45 Final Assembly Line will be located in Mobile, Alabama. The Mobile Assembly line stand-up schedule is based on lead times experienced on these previous projects and includes additional schedule margin. The warfighter will not be affected should any delays occur due to the availability of a duplicate aircraft production line. Northrop's plan was viewed by the Air Force as less risky in terms of delivering warfighting capability on schedule.
Finally, Northrop came in cheaper than the Boeing design. Basically, Northrop offered a more capable, lower cost system at lower risk than Boeing. That's why they won. That's also the view of men and women from five different air forces who decide what type of aircraft they want to take into combat.