Luke_Wilbur Posted March 1, 2008 Report Share Posted March 1, 2008 The Air Force announced today it has selected Northrop Grumman Corp. to build its next-generation air-refueling tanker aircraft. The contract calls for up to 179 new KC-45A tankers to be built over the next decade or so at a cost of around $35 billion. Tanker aircraft are used to refuel other aircraft while in flight. This initial contract for the newly named KC-45A will provide significantly greater air refueling capabilities than our current fleet of Eisenhower-era KC-135s,” Air Force Secretary Michael W. Wynne told reporters at a Pentagon news conference. The new tanker “will be able to refuel U.S. and allied aircraft in every area of responsibility, worldwide, 24 hours a day, in adverse weather and be equipped with defensive systems,” Wynne said. The new planes eventually will replace hundreds of aging KC-135 Stratotanker aircraft that were introduced in the late 1950s. "Today's tanker decision is a major step in the Air Force’s critical recapitalizing and modernization that is going to be required to defend the United States and to support our international partners in the 21st century, Wynne said. The new aircraft also will used to carry cargo, passengers, and medical patients, the Air Force secretary said. "The KC-45, built by Northrop Grumman, will provide our nation and partners the critical ability to reach across the globe and project our combat capability or our humanitarian friendship rapidly and effectively,” Gen. Duncan J. McNabb, the Air Force’s vice chief of staff, said. The new tankers, McNabb continued, will “ensure our bombers and our fighters can deliver global power and give our intelligence, surveillance and reconnaissance platforms the ability to provide global vigilance.” The Airbus-Northrop Grumman partnership had competed against the Boeing Co. for the tanker contract, said Sue C. Payton, assistant secretary of the Air Force for acquisition. Payton cited the transparency of the contracting competition, noting both enterprises had received regular feedback from the Air Force on how they were performing throughout the process. Northrop Grumman clearly provided the best value to the government,” Payton said, noting the Airbus-allied group’s plane earned superior marks for mission capability, past performance and in several other categories. I would tell you, that, overall, Northrop Grumman did have strong areas in aerial refueling and in airlift,” Payton said. There was “no bias” involved in the awarding of the contract, she emphasized. Both competitors will be debriefed in coming weeks, Payton said, noting there is an appeal process. If everything goes well, the first test aircraft should be flying by 2010, said Air Force Gen. Arthur J. Lichte, commander of Air Mobility Command based at Scott Air Force Base, Ill. Air Mobility Command provides the U.S. military with passenger, cargo, tanker and other aircraft support. The Air Force should receive the first group of operational KC-45A aircraft around 2013, Lichte said. Citing his role as Air Mobility Command’s chief, Lichte expressed relief that the process to deliver a new air refueling tanker to his service is moving forward. We know that in the future years we will have a new tanker," Lichte said. "Tankers are what really enable the fight." We were just informed that our KC-767 Advanced Tanker proposal was not selected in the KC-135 Replacement Program known as KC-X. Obviously we are very disappointed with this outcome. We believe that we offered the Air Force the best value and lowest risk tanker for its mission. Our next step is to request and receive a debrief from the Air Force. Once we have reviewed the details behind the award, we will make a decision concerning our possible options, keeping in mind at all times the impact to the warfighter and our nation. The Boeing Company would like to thank the many people who helped us in this campaign. We have received tremendous support from our suppliers, elected federal/state/local leaders, unions, community groups, and the 160,738 men and women who work for Boeing. Bill Barksdale Boeing Tanker Communications office: (703) 872-4579 mobile: (314) 707-3294 william.a.barksdale (AT) boeing.com Northrop Grumman Corporation (NYSE:NOC) announced today that it has been selected by the U.S. Air Force to provide the KC-45A aerial refueling tanker for the KC-135 tanker replacement program. The Air Force's KC-45A is based on the highly-successful A330 commercial airframe, produced by EADS. "We are excited to partner with the Air Force for their number one acquisition priority, the KC-45A Tanker," said Ronald D. Sugar, Northrop Grumman chairman and chief executive officer. "Northrop Grumman's vast expertise in aerospace design, development and systems integration will ensure our nation's warfighters receive the most capable and versatile tanker ever built. The Northrop Grumman KC-45A tanker will be a game changer." The initial KC-45A contract provides four System Design and Development aircraft and is valued at $1.5 billion. The first KC-45A airframe completed its first flight on Sept. 25, 2007 and will now begin military conversion to the tanker configuration. The KC-45A's Aerial Refueling Boom System is currently in flight test and has successfully performed numerous in-flight contacts with receiver aircraft. "Clearly the U.S. Air Force conducted a thorough and transparent competition in choosing their new tanker, which resulted in selection of the aircraft that best meets their current and future requirements," said Gary Ervin, corporate vice president and president of Northrop Grumman's Integrated Systems sector. "By selecting the most capable and modern aircraft, the Air Force has embraced a system that provides a best-value solution to our armed forces and our nation." The KC-45A Tanker aircraft will be assembled at new, state-of-the-art manufacturing facilities in Mobile, Ala., and will employ 25,000 workers at 230 U.S. companies. The KC-45A's refueling systems will be built at new facilities in Bridgeport, W.Va., and delivered to the KC-45A Production Center for aircraft integration. The KC-45A will be built by a world-class industrial team led by Northrop Grumman, and includes primary subcontractor EADS North America and General Electric Aviation, Sargent Fletcher, Honeywell, Parker, AAR Cargo Systems, Telephonics and Knight Aerospace. Northrop Grumman Corporation is a $32 billion global defense and technology company whose 120,000 employees provide innovative systems, products, and solutions in information and services, electronics, aerospace and shipbuilding to government and commercial customers worldwide. Contact: Randy Belote (703) 875-8525 randy.belote (AT) ngc.com Selection of the Northrop Grumman KC-30 Tanker by the U.S. Air Force, a system based on EADS’ A330 MRTT (Multi Role Tanker Transport) and designated by the USAF as the KC-45A, will significantly increase EADS’ industrial presence and commitment in the United States, as well as its role as a U.S.-based defence and homeland security provider. EADS North America is the partner to Northrop Grumman on the new tanker, with responsibility for assembling airframes and providing completed flight-qualified aircraft and refuelling sub-systems. The KC-45A Tanker is based on the EADS A330 MRTT (Multi Role Tanker Transport). Its airframe is derived from the popular A330 jetliner produced by EADS’ Airbus Division, of which more than 880 have been ordered worldwide in passenger and freighter configurations. The Military Transport Aircraft Division (MTAD) is responsible within the EADS Group for all military derivative programmes based on Airbus platforms, including tankers. This latest success in a series of competitions worldwide confirms the EADS-based military tanker as the best solution available on the market. Following its purchase by the Royal Australian Air Force, the MRTT solution has been officially ordered by the Royal Saudi Air Force and the UAE Air Force, as well as selected by the Royal Air Force of the UK. Selection of the KC-45A Tanker was announced today by the U.S. Air Force, culminating a multi-year evaluation. The programme award calls for 179 aircraft with an estimated contract value of US$ 40 billion. The initial KC-45A contract for Northrop Grumman covers four System Design and Development aircraft and is valued at US$ 1.5 billion. Louis Gallois, CEO of EADS, stated: “We have committed our energies to this important U.S. Air Force programme and to our team mate Northrop Grumman. Selecting a tanker based on the A330 MRTT will provide the U.S. Air Force with the most modern and capable tanker aircraft available today.” He added: “This major selection is a win-win for our customers, for allied industrial cooperation and for EADS. It signals a quantum leap forward in our commitment to the U.S. defence customer, reflects and supports our global strategy to increase EADS’ industrial presence in key markets and our goal to balance the company’s defence and commercial portfolios.” Tom Enders, President and CEO of Airbus said: “Northrop Grumman and the U.S. Air Force can count on the full resources of Airbus to support the KC-45A tanker’s production and delivery. All four System Design and Development aircraft are already in production. Preparatory work is now underway for our commitment to co-locate the final assembly of the tankers and A330 civilian freighter aircraft at Mobile, Alabama, creating the first new large commercial aircraft assembly facility in the U.S. in over 40 years.” Carlos Suárez, Chairman of EADS CASA and Head of Military Transport Aircraft Division stated: “This selection is a monumental achievement and firmly establishes the A330 MRTT as the state-of-the-art air refuelling system. The A330 MRTT platform now has won five consecutive global competitions and is clearly the standard for new-generation tankers worldwide.” “We are proud that the U.S. Air Force chose the Northrop Grumman/EADS team to modernize its aerial refuelling fleet,” said EADS North America Chairman and CEO Ralph D. Crosby, Jr. “EADS has committed our full resources to support this vital programme for our prime contractor, Northrop Grumman, the U.S. Air Force and the warfighters that this system will serve for decades to come. We already have begun the work necessary to expand our U.S. industrial footprint in support of this important programme.” EADS has made major investments in the KC-45A Tanker, as well as its international tanker programmes, spending more than US$ 100 million to develop the aircraft’s advanced Aerial Refuelling Boom System (ARBS), while also building the first airframe – which made its maiden flight last September, and will now begin military conversion to the full aerial cargo configuration. Production of KC-45A airframes will be performed at Airbus’ new Mobile, Alabama aerospace centre of excellence which houses the Airbus KC-45A final assembly facility. In addition the final assembly of Airbus A330 civilian freighters will be performed there, providing a robust final assembly line to ensure low risk, high efficiency and increased capacity for both the U.S. Air Force and commercial Airbus customers. EADS North America’s role in support of the Northrop Grumman KC-45A Tanker programme marks its latest contribution to the defence and security of the United States. The company already is supplying through its subsidiary American Eurocopter up to 345 UH-72A Lakota Light Utility Helicopters to the U.S. Army for homeland security operations, medical evacuation, passenger/logistics transportation and drug interdiction missions. In addition, the U.S. Coast Guard is acquiring CN-235 maritime patrol aircraft, designated the HC-144A, from EADS CASA, and the service operates a fleet of nearly 100 Eurocopter HH-65 helicopters, whose upgrades were provided by American Eurocopter. EADS is a global leader in aerospace, defence and related services. In 2006, EADS generated revenues of € 39.4 billion and employed a workforce of about 116,000. The Group includes the aircraft manufacturer Airbus, the world's largest helicopter supplier Eurocopter and EADS Astrium, the European leader in space programmes from Ariane to Galileo. Its Defence & Security Division is a provider of comprehensive systems solutions and makes EADS the major partner in the Eurofighter consortium as well as a stakeholder in the missile systems provider MBDA. EADS also develops the A400M through its Military Transport Aircraft Division. Pierre Bayle Tel.: +33 1 42 24 20 63 Why Did This Happen? The Darleen A. Druyan Scandal Darleen A. Druyun (a.k.a the Dragon Lady), was a member of the Senior Executive Service, is principal deputy assistant secretary of the Air Force for acquisition and management, Washington, D.C. She supervised, directed and oversaw the management of Air Force acquisition programs and acquisition streamlining, and provides advice on acquisition matters to the assistant secretary of the Air Force for acquisition, chief of staff and secretary of the Air Force. She launched the Air Force acquisition reform "Lightning Bolts" initiatives to jump-start acquisition reform in the Air Force. She helds the position of chairman of the NATO Airborne Early Warning and Control Program Management Board of Directors. The board was chartered by the North Atlantic Council to manage the multibillion dollar 12-nation funded NATO E-3A Program. Prior to joining the staff of the secretary of the Air Force, Mrs. Druyun served as associate administrator for procurement at the National Aeronautics and Space Administration. She was directly responsible for providing functional management leadership and direction of procurement activities. In April 1992 she was appointed NASA's chief of staff, responsible for providing counsel on all matters of policy and agency procedures, and managing the activities of the agency. She was appointed to her current position in February 1993. In 1993 Druyun was investigated for her involvement in a plan to speed up payments by the Air Force to McDonnell Douglas . Although several other people involved were discharged, Druyun kept her position. In 2000 Druyun sent the resumes of her daughter, a recent college graduate, and her daughter's fiancé, a published PhD Aeronautical Engineer, to Boeing and both were hired. The investigation into her illegal activities was spearheaded by Senator John McCain. Druyun and Michael Sears, Boeing's chief financial officer, discussed Druyun's hiring during negotiations on a $23 billion deal in which the Air Force would buy or lease as many as 100 Boeing 767 aerial-refueling planes. Druyun subsequently went to work for Boeing. Sears also was convicted and served four months in prison. According to an October 27 Washington Post article, Boeing executives met with Darleen Druyun on September 25, 2001, to discuss how the company could sell the tankers even though the Air Force did not have the funds to cover the deal. “Druyun agreed at the meeting, according to notes taken by Boeing, not only to promote the leasing idea on Capitol Hill but also to find needed money by cutting back a comparatively inexpensive modernization program for existing tankers—an arrangement, Boeing and the Air Force have acknowledged, that will retire flightworthy tankers early to procure new ones,” the Post reported. “She also said ‘work placement could help’ [promote the deal], meaning that Boeing should ensure that subcontracts were awarded in the districts of key Congress members, according to the notes.” In April 2002, Senator McCain, along with Senator Carl Levin and Senator John Warner, requested that the Congressional Budget Office (CBO) undertake an analysis of the proposed lease.98 CBO lacked access to the figures that the Air Force and Boeing were negotiating, but analyzed the lease deal using a variety of assumptions. Based on its model, CBO informed Senator McCain that the leasing option would cost approximately $37 billion.100 On the other hand, CBO estimated to buy the 100 tankers outright would cost approximately $25 billion. Moreover, the Air Force would then own, and thus be able to use, sell, or lease the aircraft after the lease expired. Upon receiving this analysis from CBO, Senator McCain’s office promptly issued a press release using CBO’s estimates as evidence that the lease option was a bad idea. Senator McCain stated in the press release, “CBO is one of the most respected nonpartisan agencies in Washington. Their analysis confirms what everyone already knows; this leasing proposal is a bad deal for the taxpayers, a bad deal for the military, and a bad deal for pretty much everyone but Boeing.” In May 2002, Senator McCain cited to a report by GAO as proof that the lease plan was a bad idea. He highlighted that GAO estimated it would cost the Air Force $26 billion to lease 100 tankers for 6-10 years, while the existing tanker fleet could be upgraded for approximately $3.6 billion. The National Legal and Policy Center (NLPC), suspicious of the lease, informed the DoD IG that on October 21, 2002, while she was negotiating the tanker deal, Ms. Druyun sold her home to Boeing Vice President and assistant general counsel, John Judy. The U.S. Government Accountability Office, a congressional watchdog agency, concluded Druyun improperly steered the original contract to Boeing. Druyun, entered a supplemental plea agreement in the United States District Court for the Eastern District of Virginia for conspiracy to violate Title 18, U. S. Code § 208(a).14 On April 20, 2004, as part of her original plea agreement, Ms. Druyun acknowledged a conflict of interest in negotiating a job with Boeing while simultaneously negotiating a contract with the same company in her capacity as the senior procurement official for the Air Force. Druyun served nine months at a medium-security facility in Marianna, Fla. She was also fined $5,000 and ordered to serve three years of community service. She was released October 3, 2005. Ms. Druyun was eventually hired by Boeing to help lead its missile defense business at a salary of $250,000 a year There have been wide repercussions from the scandal. Two senior civilian officials in the Air Force, one of them the service's secretary, James Roche, went into early retirement. Druyun's conviction triggered 51 reviews — of contracts, Air Force procedures, Pentagon acquisition practices and conflict-of-interest regulations — then-acting Air Force Secretary Michael Dominguez told the Senate Armed Services Committee in April. The Air Force also is opened to competition a portion of its contract to build a new small satellite-guided bomb that had been awarded to Boeing. Ms. Druyun now acknowledges that she agreed to pay a higher price for the tankers than she thought they were really worth. She admitted explicitly that she agreed to the inflated prices to curry favor with her future employers and as a “parting gift to Boeing” from her position as a senior Air Force procurement official. She also admitted to providing Boeing with a Airbus proprietary pricing information related to this same procurement. For more information read the attached PDF The Darleen Druyun Debacle: Procurement, Power, and Corruption BY Jeffrey Branstetter GetTRDoc.pdf Absolute Power Corrupts Absolutely Quote Link to comment Share on other sites More sharing options...
Guest Boeing Tanker Communications Posted March 11, 2008 Report Share Posted March 11, 2008 The Boeing Company [NYSE: BA] will file a formal protest on Today asking the Government Accountability Office (GAO) to review the decision by the U.S. 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. A rigorous analysis of the Air Force evaluation that resulted in the Northrop/EADS contract led Boeing 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. Bill Barksdale Boeing Tanker Communications office: (314) 232-0860 mobile: (314) 707-3294 william.a.barksdale@boeing.com Quote Link to comment Share on other sites More sharing options...
Guest Jed Babbin Posted April 10, 2008 Report Share Posted April 10, 2008 The controversial Air Force decision to spend $40 billion on the outsized Airbus A330-based air refueling tanker was largely premised on conclusions drawn from data about airfields that were incomplete and incorrect, I learned in a Capitol Hill meeting earlier this week. The Air Force determined the ability of each competing aircraft to perform the tanker mission using a complex computer model called the "Integrated Fleet Air Refueling Assessment" ("IFARA" in the inevitable military acronym). One key part of that assessment relied on data which determined the capacity of airfields to accept the weight and size of the aircraft. Quote Link to comment Share on other sites More sharing options...
Guest Michael R. Golden Posted June 19, 2008 Report Share Posted June 19, 2008 The Government Accountability Office (GAO) sustained the Boeing Company’s protest of the Department of the Air Force’s award of a contract to Northrop Grumman Systems Corporation for KC-X aerial refueling tankers. Boeing challenged the Air Force’s technical and cost evaluations, conduct of discussions, and source selection decision. “Our review of the record led us to conclude that the Air Force had made a number of significant errors that could have affected the outcome of what was a close competition between Boeing and Northrop Grumman. We therefore sustained Boeing’s protest,” said Michael R. Golden, the GAO’s managing associate general counsel for procurement law. “We also denied a number of Boeing’s challenges to the award to Northrop Grumman, because we found that the record did not provide us with a basis to conclude that the agency had violated the legal requirements with respect to those challenges.” The GAO recommended that the Air Force reopen discussions with the offerors, obtain revised proposals, re-evaluate the revised proposals, and make a new source selection decision, consistent with the GAO’s decision. The agency also made a number of other recommendations including that, if the Air Force believed that the solicitation, as reasonably interpreted, does not adequately state its needs, the Air Force should amend the solicitation prior to conducting further discussions with the offerors; that if Boeing’s proposal is ultimately selected for award, the Air Force should terminate the contract awarded to Northrop Grumman; and that the Air Force reimburse Boeing the costs of filing and pursuing the protest, including reasonable attorneys’ fees. By statute, the Air Force is given 60 days to inform the GAO of the Air Force’s actions in response to GAO’s recommendations. The GAO decision should not be read to reflect a view as to the merits of the firms’ respective aircraft. Judgments about which offeror will most successfully meet governmental needs are largely reserved for the procuring agencies, subject only to such statutory and regulatory requirements as full and open competition and fairness to potential offerors. The GAO bid protest process examines whether procuring agencies have complied with those requirements. Specifically, GAO sustained the protest for the following reasons: 1. The Air Force, in making the award decision, did not assess the relative merits of the proposals in accordance with the evaluation criteria identified in the solicitation, which provided for a relative order of importance for the various technical requirements. The agency also did not take into account the fact that Boeing offered to satisfy more non-mandatory technical “requirements” than Northrop Grumman, even though the solicitation expressly requested offerors to satisfy as many of these technical “requirements” as possible. 2. The Air Force’s use as a key discriminator that Northrop Grumman proposed to exceed a key performance parameter objective relating to aerial refueling to a greater degree than Boeing violated the solicitation’s evaluation provision that “no consideration will be provided for exceeding [key performance parameter] objectives.” 3. The protest record did not demonstrate the reasonableness of the Air Force’s determination that Northrop Grumman’s proposed aerial refueling tanker could refuel all current Air Force fixed-wing tanker-compatible receiver aircraft in accordance with current Air Force procedures, as required by the solicitation. 4. The Air Force conducted misleading and unequal discussions with Boeing, by informing Boeing that it had fully satisfied a key performance parameter objective relating to operational utility, but later determined that Boeing had only partially met this objective, without advising Boeing of this change in the agency’s assessment and while continuing to conduct discussions with Northrop Grumman relating to its satisfaction of the same key performance parameter objective. 5. The Air Force unreasonably determined that Northrop Grumman’s refusal to agree to a specific solicitation requirement that it plan and support the agency to achieve initial organic depot-level maintenance within two years after delivery of the first full-rate production aircraft was an “administrative oversight,” and improperly made award, despite this clear exception to a material solicitation requirement. 6. The Air Force’s evaluation of military construction costs in calculating the offerors’ most probable life cycle costs for their proposed aircraft was unreasonable, where the agency during the protest conceded that it made a number of errors in evaluation that, when corrected, result in Boeing displacing Northrop Grumman as the offeror with the lowest most probable life cycle cost; where the evaluation did not account for the offerors’ specific proposals; and where the calculation of military construction costs based on a notional (hypothetical) plan was not reasonably supported. 7. The Air Force improperly increased Boeing’s estimated non-recurring engineering costs in calculating that firm’s most probable life cycle costs to account for risk associated with Boeing’s failure to satisfactorily explain the basis for how it priced this cost element, where the agency had not found that the proposed costs for that element were unrealistically low. In addition, the Air Force’s use of a simulation model to determine Boeing’s probable non-recurring engineering costs was unreasonable, because the Air Force used as data inputs in the model the percentage of cost growth associated with weapons systems at an overall program level and there was no indication that these inputs would be a reliable predictor of anticipated growth in Boeing’s non-recurring engineering costs. The 69-page decision was issued under a protective order, because it contains proprietary and source selection sensitive information. The GAO has directed counsel for the parties to promptly identify information that cannot be publicly released so that GAO can expeditiously prepare and release, as soon as possible, a public version of the decision. Although the Air Force intends to ultimately procure up to 179 KC-X aircraft, the solicitation (No. FA8625-07-R-6470) provided for an initial contract for system development and demonstration of the KC-X aircraft and procurement of up to 80 aircraft. The solicitation provided that award of the contract would be on a “best value” basis, and stated a detailed evaluation scheme that identified technical and cost factors and their relative weights. With respect to the cost factor, the solicitation provided that the Air Force would calculate a “most probable life cycle cost” estimate for each offeror, including military construction costs. In addition, the solicitation provided a detailed system requirements document that identified minimum requirements (called key performance parameter thresholds) that offerors must satisfy to receive award. The solicitation also identified desired features and performance characteristics of the aircraft (which the solicitation identified as “requirements,” or in certain cases, as objectives) that offerors were encouraged, but were not required, to provide. The agency received proposals and conducted numerous rounds of negotiations with Boeing and Northrop Grumman. The Air Force selected Northrop Grumman’s proposal for award on February 29, 2008, and Boeing filed its protest with the GAO on March 11, supplementing it numerous times thereafter. In accordance with GAO’s Bid Protest Regulations, GAO obtained a report from the agency and comments on that report from Boeing and Northrop Grumman. The documentary record produced by the Air Force in this protest is voluminous and complex. The GAO also conducted a hearing, at which testimony was received from a number of Air Force witnesses to complete and explain the record. Following the hearing, GAO received further comments from the parties, addressing the hearing testimony as well as other aspects of the record. Quote Link to comment Share on other sites More sharing options...
Guest U.S. Senator John McCain Posted June 19, 2008 Report Share Posted June 19, 2008 My paramount concern on the tanker replacement program has always been that the Air Force buy the most capable aerial refueling tankers at the most reasonable cost. Everyone agrees that this can only happen under fair and open competition. The GAO’s finding that the Air Force did not fairly apply its own rules in making its original award decision must be taken very seriously. As I have under similar circumstances, I now urge the Air Force to carefully consider the GAO’s decision and implement its recommendations as quickly as, and to the fullest extent, possible. Quote Link to comment Share on other sites More sharing options...
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