Why didn't favored Boeing win Air Force tanker contract?

[babylonsister]

Why didn't favored Boeing win Air Force tanker contract?
By Les Blumenthal | McClatchy Newspapers

* Posted on Saturday, March 15, 2008



WASHINGTON — The question had been whispered up and down Capitol Hill corridors in the days after the Air Force chose a European plane rather than a Boeing one to replace the nation's fleet of aging aerial-refueling tankers.

Rep. Norm Dicks finally asked it.

"Some people are saying Boeing was arrogant, discourteous?" the Washington state Democrat asked Air Force Secretary Michael Wynne.

"All my dealings with Boeing were objective and professional," Wynne responded.

Wynne didn't elaborate. Dicks didn't press.

At congressional hearings over the past two weeks, Wynne and other Air Force officials have defended the $35 billion tanker contract time and again, saying that the competition was fair, open and legal.

But plenty of questions remain unanswered about why Boeing didn't get a contract that it had been heavily favored to win. They include:

* Did the Air Force make critical changes in the final bid proposal and a computer model used to evaluate the bids that ended up throwing the contract to Northrop Grumman and the European Aerospace Defense and Space Co., the parent company of Boeing's rival, Airbus?

* Did the Boeing Co. misread crucial signals about the contract because of a strained relationship with the Air Force after a 5-year-old procurement scandal that sent two people to jail and led to the resignation of the company's chief executive?

* Was Boeing's commercial airplane division so fixated on the sexy new 787 Dreamliner that producing 12 to 15 stodgy old 767s a year for the Air Force became secondary?

* Did the Boeing defense team, convinced that it would win, get out-hustled by Northrop-EADS, which according to Air Force officials brought its "A game" to the competition?

* Did the Pentagon buckle under pressure from Sen. John McCain, R-Ariz., who demanded that there be more than one bidder even if it meant that the Air Force couldn't consider the estimated billions of dollars in possibly illegal government subsidies that the European plane manufacturer received? And how will McCain's involvement play out as he campaigns for president in states such as Ohio and Michigan, which already have seen jobs exported, and Washington, Kansas and Missouri, where Boeing has plants?

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http://www.mcclatchydc.com/226/story/30428.html

[Bluzmann57]

1. Because Boeing is Unionized

and non American labor is cheaper?

[gravity]

2. Airbus is subsidized

Economically, it benefits the US because France is basically using its taxes to pay for some of the costs.

[MaryCeleste]

4. Wrong: So is NGC and for that matter EADS

[hack89]

3. The key is the Pacific

which is the most likely theater of war in the future. It is a huge area with relatively few air bases (compared to Europe). A bigger tanker with more fuel and more on station time simply makes more military sense.

There are good military reasons why Boeing lost.

[MaryCeleste]

5. The DoD procurement process is well regulated and after the Druyan fiasco this one was

monitored almost excessively. GAO has 100 days to file its report. I expect the award to stand.

The measurement criteria were well defined. I'm betting that Boeing got lazy and thought they had a lock on it. Prior bad acts would not have been a direct factor, though the changes in the procurement process would have made it harder for Boeing to play the political influence/domestic card.

On the technical side, it Boeing bid a multi model hybrid, NGC did not. The NGC airframe choice was stable and 10 years newer. It was somewhat larger but still met the field length requirements. The 777 did not.

The domestic content issue is overblown. Boeing is exporting more and more of its commercial work. This being a commercial derivative would have significant non-domestic content, most likely more than the 85% claimed. NGC claimed 58% with efforts to increase it.