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09/02/10
USAF Issues KC-X Update, Ignores Northrop Demands
By Stephen Trimble
The US Air Force has issued a "presoliciation notice" for the KC-X tanker contract that suggests at least two of the three changes demanded by the Northrop Grumman/EADS North America team will not be incorporated in the final request for proposals (RFP).
The notice released on 8 February on the Federal Business Opportunities web site precedes the publication of the final RFP, which the notice says will not occur before 23 February.
The USAF plans to award a fixed-price contract for the four-year development phase, the notice says.
Northrop and EADS executives have demanded that the USAF adopt a traditional "cost-plus" contract policy for KC-X, arguing the fixed-price plan makes the contractor assume all of the risk of schedule delays and cost overruns.
For its part, Boeing supports the USAF's fixed-price approach for the KC-X development phase. "Even though it's [a] firm-fixed-price [strategy], I believe there is shared risk," says Chris Chadwick, president of Boeing Military Aircraft, speaking on 3 February at the Singapore Airshow.
The notice also appears to indicate that the performance requirements for the KC-X aircraft will be based on the existing KC-135R. For example, the USAF calls for a fuel offload capability "at least as good as the KC-135R".
The USAF's decision to make the KC-135R the baseline for its desired performance for the KC-X tanker has raised concerns for the Northrop/EADS team, which is proposing the KC-45 (formerly known as KC-30). The tanker version of the Airbus A330-200 airliner is significantly larger than the Boeing KC-767, which is one of the aircraft Boeing could propose. Both aircraft are larger than the KC-135R.
How the final RFP will address the Northrop-led team's third major concern is left unclear by the presolicitation notice. Northrop executives have criticized the draft RFP for evaluation criteria heavily focused on price, calling the strategy a "race to the bottom".
The presolicitation notice says the contract will be awarded on a "best value" basis, in which price can be balanced against performance and risk.
Northrop is not backing off of its threat to withdraw from the competition.
"Northrop Grumman feels that the draft RFP, as structured, fails the test of true competition and, without a responsive set of changes, is not an RFP to which Northrop Grumman can respond," the company says in a statement.
Boeing referred questions about its response to the presolicitation notice to a statement posted on its tanker blog on 9 February.
"We must offer and deliver an American designed and built combat-ready tanker at the lowest cost to the taxpayer," Boeing says. "And in 15 days, Boeing will do just that."
