Calculated Ploy... Or Capitulation?
Representatives with Boeing KC-767 tanker team met with Pentagon
officials Tuesday to go over specifications for the oft-contested
KC-X contract bid... but there are murmurs Boeing may opt to cede
the competition to rival Northrop Grumman and EADS.
Citing reports in an industry trade journal, the Wichita Eagle
states Boeing may be considering withdrawing from the competition
outright, in response to the Pentagon's revised list of criteria
for the bid.
As ANN reported, those specs, issued by the
Pentagon last week, place greater emphasis on aerial refueling
duties, and capabilities above and beyond the Air Force's original
That bodes well for Northrop Grumman and EADS, whose KC-30
offers greater fuel capacity than the smaller Boeing KC-767. The
KC-30 won the original KC-X bid in February, but Boeing protested
to the Government Accountability Office on the grounds the Air
Force showed favoritism to the larger aircraft, despite the fact
the KC-767 more closely adhered to the Air Force's original
The GAO upheld that protest... and in July, the Pentagon threw
open the bid once again, although on an accelerated schedule. The
Pentagon also stripped decision-making authority from the USAF.
Boeing says it will wait for the Pentagon to release its final
requirements for KC-X, before making a decision on whether to back
out. Officials with the Department of Defense met with both Boeing
and Northrop/EADS on Tuesday, ahead of the deadline this week for
each party to submit their revised bids.
This could be a calculated ploy on Boeing's part; after all,
Northrop/EADs made a similar threat to back out of the
original KC-X competition in January 2007. Those
parties later agreed to bid the contract, after the Air Force added
language to the plan, that considered the KC-30's greater fuel
capacity as a selection point.
Should Boeing opt out of the deal, it would leave the Pentagon
with the admittedly easier -- but politically thorny -- choice to
award the de facto sole-source contract to Northrop.
The Pentagon could also once again revise the requirements for
KC-X to give Boeing greater parity, or time to develop a larger
777-based offering for the contract. Considering that Northrop/EADS
already won a recent competition, however -- combined with the
USAF's desperate need for new tankers to replace aging KC-135s --
it's less likely the DoD would take that route.
As for Boeing, it has other options, too. The company could
protest the Pentagon's final Request for Proposals, or opt to bid
for the contract anyway... hoping to either win, or force another
stalemate on protest should Northrop win once again.
Kansas Congressman Todd Tiahrt, a staunch Boeing advocate, told
the Eagle he met recently with Boeing executives and told them "one
of the options they have to consider is just walking away from the
But Tiahrt has a hole-card to play in that scenario, as well.
Even if Northrop wins the second bid -- outright, or in competition
-- the House and Senate defense appropriation committees "could
just cut the funding off until they do it right," he said.