Says KC-X RFP Differs From Criteria Cited In Going With
KC-45A
It's official. Citing irregularities with the process of the
competition and the evaluation of the competitors' bids, on Tuesday
Boeing filed a formal protest with the Government Accountability
Office (GAO), asking the agency to review the decision by the US
Air Force to award a contract to a team of Northrop Grumman and
European Aeronautic Defence and Space Company (EADS) to replace the
aging fleet of KC-135 aerial refueling tankers.
"Our analysis of the data presented by the Air Force shows that
this competition was seriously flawed and resulted in the selection
of the wrong airplane for the warfighter," said Mark McGraw, vice
president and program manager, Boeing Tanker Programs. "We have
fundamental concerns with the Air Force's evaluation, and we are
exercising our right under the process for a GAO review of the
decision to ensure that the process by which America's next
refueling tanker is selected is fair and results in the best choice
for the U.S. warfighters and taxpayers."
Following an internal
analysis of data presented at a March 7 debriefing on the decision,
Boeing concluded what began as an effort by the Air Force to run a
fair, open and transparent competition... evolved into a process
replete with irregularities. These irregularities placed Boeing at
a competitive disadvantage throughout this competition, the
American planemaker asserts, and even penalized Boeing for offering
a commercial-derivative airplane with lower costs and risks and
greater protection for troops.
"It is clear that the original mission for these tankers -- that
is, a medium-sized tanker where cargo and passenger transport was a
secondary consideration -- became lost in the process, and the Air
Force ended up with an oversized tanker," McGraw said. "As the
requirements were changed to accommodate the bigger, less capable
Airbus plane, evaluators arbitrarily discounted the significant
strengths of the KC-767, compromising on operational capabilities,
including the ability to refuel a more versatile array of aircraft
such as the V-22 and even the survivability of the tanker during
the most dangerous missions it will encounter."
Boeing is asking the GAO to examine several factors in the
competition, that it states were fundamentally flawed:
- The contract award and subsequent reports ignore the fact that
in reality Boeing and the Northrop/EADS team were assigned
identical ratings across all five evaluation factors: 1) Mission
Capability, 2) Risk, 3) Past Performance, 4) Cost/Price and 5)
Integrated Fleet Aerial Refueling Assessment. Indeed, an objective
review of the data as measured against the Request for Proposal
shows that Boeing had the better offering in terms of Most Probable
Life Cycle Costs, lower risk and better capability.
- Flaws in this procurement process resulted in a significant gap
between the aircraft the Air Force originally set out to procure --
a medium-sized tanker to replace the KC-135, as stated in the RFP
-- and the much larger Airbus A330-based tanker it ultimately
selected. It is clear that frequent and often unstated changes
during the course of the competition -- including manipulation of
evaluation criteria and application of unstated and unsupported
priorities among the key system requirements -- resulted in
selection of an aircraft that was radically different from that
sought by the Air Force and inferior to the Boeing 767 tanker
offering.
- Because of the way the Air Force treated Boeing's cost/price
data, the company was effectively denied its right to compete with
a commercial-derivative product, contrary not only to the RFP but
also to federal statute and regulation. The Air Force refused to
accept Boeing's Federal Acquisition Regulation-compliant cost/price
information, developed over 50 years of building commercial
aircraft, and instead treated the company's airframe cost/price
information as if it were a military-defense product. Not only did
this flawed decision deny the government the manufacturing benefits
of Boeing's unique in-line production capability, subjecting the
Air Force to higher risk, but it also resulted in a distortion of
the price at which Boeing actually offered to produce tankers.
- In evaluating Past Performance, Boeing claims the Air Force
ignored the fact that Boeing -- with 75 years of success in
producing tankers -- is the only company in the world that has
produced a commercial-derivative tanker equipped with an
operational aerial-refueling boom. Rather than consider recent
performance assessments that should have enhanced Boeing's
position, the Air Force focused on relatively insignificant details
on "somewhat relevant" Northrop/EADS programs to the disadvantage
of Boeing's experience.
"Boeing offered an aircraft that provided the best value and
performance for the stated mission at the lowest risk and lowest
life cycle cost," said McGraw. "We did bring our A-game to this
competition. Regrettably, irregularities in the process resulted in
an inconsistent and prejudicial application of procurement
practices and the selection of a higher-risk, higher-cost airplane
that's less suitable for the mission as defined by the Air Force's
own Request For Proposal. We are only asking that the rules of fair
competition be followed."
Original Report
0105 EDT: For better or for worse, they're
gonna do it. Boeing announced early Tuesday it will file a formal
protest later today, asking the Government Accountability Office
(GAO) to review the decision by the US Air Force to award a
contract to a team of Northrop Grumman and European Aeronautic
Defence and Space Company (EADS) to replace aerial refueling
tankers.
"Our team has taken a very close look at the tanker decision and
found serious flaws in the process that we believe warrant appeal,"
said Jim McNerney, Boeing chairman, president and chief executive
officer. "This is an extraordinary step rarely taken by our
company, and one we take very seriously."
Following a debriefing on the decision by the Air Force on March
7, Boeing officials spent three days
reviewing the Air Force case for its tanker award.
Boeing states a "rigorous" analysis of the Air Force evaluation
that resulted in the Northrop/EADS contract led the American
planemaker to the conclusion that a protest was necessary.
"Based upon what we have seen, we continue to believe we
submitted the most capable, lowest risk, lowest Most Probable Life
Cycle Cost airplane as measured against the Air Force's Request for
Proposal," McNerney said. "We look forward to the GAO's review of
the decision."
Boeing said it would provide additional details of its case in
conjunction with the protest filing on Tuesday. Stay tuned.