Boeing Tanker Protest Sustained!!!!!

[JDK]

Thanks Gentlemen.

For the record, I don't think there's any reason not to have a clear preference or insights into the strengths and weaknesses of either company, tender or aircraft. The issue is when a discussion features a nationally-identified 'home' competitor and a 'foreign' alternative, it's all too often that the honesty of the evaluation and rigour of the examination is thrown by unconscious bias - we all do it, all too easily. As I said, it often manifests itself in expecting strange motivations from 'them' and excusing 'minor' errors from 'us'. The test is 'would I say that if the names were reversed?' Often no.

It matters because WIX has lost a lot of non-US input because (IMHO) often posters from Europe and non native English speakers have not felt welcome or respected. That diversity of knowledge and views should be a major benefit for WIX, not a loss.

No finger pointing, but more like the previous two posts and less 'slams' of different - and sometimes uncomfortable takes - on our pet or 'home' topics. Thanks!

As to the specific case, I have little interest and less understanding of current aircraft and military procurement - but it's clearly a mess, and as I think I said in this thread before, the greatest loss is the airmen and forces requiring and waiting on the equipment. I also asked if anyone was aware of a tender process that did happen as it should - completely. I've had no offers, and despite keeping it as a question in the back of my mind, I've found none that seem like that. Says a lot about how we really play the game and why any organisation would be odd to do expect to win by following all 'the rules'.

Regards,

[bdk]

At this point, no matter what happens it is an embarassment to the US government. So much money and time would have been saved by going with the original lease/purchase arrangement.

A minor point, but...

Druyen, while still an employee of the US government, was talking to Boeing about a job for herself after her retirement and a job for her daughter. She was not convicted until after she and Sears were fired by Boeing. Druyen was not accused of doing anything illegal while at Boeing.

When Druyen commited her crime she was an employee of the US government. When Sears commited his crime (of offering Druyen a job) he was CFO of Boeing.

I am not aware of any EVIDENCE that the discussions between Druyen and Sears about employment had ANY effect on the tanker lease negotiations.

[The Inspector]

JDK,
Your last paragraph hits right at the crux of the problem. Everyone involved in this bucket of muck issue needs to be kept away from any other bidding for ANYTHING involving the U.S. Government. The process has become so perverted and twisted it's almost unrecognizable when compared to the original RFP.
Mostly what we (myself, BDK, CAPflyer, and all the others), I feel, were trying to do with ICLO (sorry buddy) is point out that yes, we would prefer to have the project 100% done here to keep a few thousand jobs in an economy that is the worst world wide in 80 years and shows no hint of getting better, in fact I'm expecting another steep drop unless someones gets their collective heads out of you know where-we also would prefer that the airframe in question be close to what the RFP specified as far as size and capabilities, the other offering is far to large and less capable, but no matter how many different ways and examples we put up for reasons NOT to purchase the 330 derivative he continues to hammer away with the same ineffective and off base talking points
I agree with BDK that this is an embarrassment to the U.S. military as well as a classic example of how not to deal with a major military purchase in public, but as long as we in the U.S. have to deal with an elected governing body (which, in theory was elected by 'me' to do 'my' business, not some corporate clowns wishes) where one side, for their own petty and petulant reasons, requires every item of business including when to break for lunch requires a 2/3's majority vote (when it does not) we will continue to face a log jam on this and every other issue needed to keep the government and military moving along smoothly. Dorothy visited the Land of Nod, I appear to be living in the Land of NO.

ICLO, you've stood by your guns admirably and put up a spirited and lively fight, no matter which way this ends you are a loyal and worthy opponent, and I wish my French were half as good as your English is-

[Iclo]

JDK: thanks for your input and positive view in this debate.

The Inspector: thanks for your friendly words.

This debate is not a fight, just an exchange of opinion.
I simply hope that you could understand that some comments about "European" could be not well taken from the other side. I suppose that these comments would be just ironic or "funny" in your mind, but as JDK pointed, there is a trouble of mutual comprehension in this subject. (and yes, on the two side )

To come back to the main subject, you pointed two interesting things in your last message:
- Put the priority on the US employement: If this feeling is comprehensive, there is a trouble: If your country decide to go in this way, accept that others countries will take same action: you don't buy equipement from foreign providers, the others countries will limit business with US companies. (And as I'm not an economist, I don't know if that this kind of protectionism will be legal, and yes, I don't know also if the European funding to Airbus was legal or not)
- The best plane for the job: As I said before I'm not enough qualified to have opinion on this decision but:
The decision to choose one of the two (perhaps soon three providers, was made in the past, and will be made by the Pentagon. I simply hope that this team of experts will made the best choice on a real evaluation of the capabilities of the different plane, with abstraction of the countries of the builders.

For me, these two points, show the real question: the bid is open worldwide or not ?

Regards

[bdk]

Here is the latest installment in my poison pen campaign against Airbus...

EADS' Tanker Math Looks Shaky
Blog: Forbes.com 07/12/2010
Author: Loren Thompson

Last week Boeing and European aerospace conglomerate EADS offered competing proposals to build the Air Force's next-generation aerial refueling tanker. This latest installment in the decade-long effort to modernize the fleet of 500 tankers -- many of which have now reached 50 years of age -- is unfolding against a very different political backdrop from that existing the last time the two companies bid for the tanker prize.

First, Northrop Grumman has dropped out of the bidding, so EADS now must compete without the cover provided by a big U.S. partner. Second, and most inconveniently for EADS, its Airbus unit has recently been taken to task by the World Trade Organization for using illegal subsidies from European governments in developing and marketing commercial transports.

The relevance of that latter development to the $35 billion tanker competition is that EADS proposes to use a modified Airbus commercial plane as its tanker. In fact, the A330 widebody it has selected is the most heavily subsidized transport in the entire Airbus lineup. That presents EADS with a big headache, because the Air Force has reworked its selection criteria for the future tanker to give EADS no credit for the fact that its bigger plane can carry more fuel or cargo. Instead, it has specified 372 mandatory requirements that both bidders' planes must meet, and once those requirements are satisfied, the competition is mostly about price. Unfortunately for EADS, its plane has 40 feet more wingspan than the rival Boeing 767 tanker; sells for $50 million more; and burns at least a ton more fuel per flight hour. What to do?

Back when EADS first entered the tanker saga several years ago, it had a plan to compensate for the higher price of its plane. First, it planned to convince the Air Force that a bigger plane with more carrying capacity should get extra credit in comparisons. Second, it promised to do much of the tanker work in the United States, especially in "red" states, at a time when Republicans controlled the White House and both chambers of Congress. And third, it planned to offer a concessionary price that would make the cost of the bigger Airbus plane more appealing -- not unlike the aggressive offers it often makes to airlines when competing with Boeing for commercial business.

The strategy almost worked. In 2008 the Northrop Grumman-EADS team scored an upset win against supposed frontrunner Boeing in an initial round of competition for the tanker. But then things began to go sour. The Government Accountability Office decided the Air Force had violated selection criteria by giving the EADS plane extra credit for carrying more fuel. Then the Democrats took Congress. Then they took the White House. Then Northrop Grumman dropped out of the bidding for a second round of the tanker competition. And then, most recently, the WTO condemned the heavy use of prohibited subsidies by Airbus to launch and market its airliners.

EADS insists that it can compete alone under the revised selection criteria and still prevail on price, however the company has not been forthcoming on how that is possible without using more illegal subsidies. Boeing and its backers in Congress are determined to block any use of prohibited funding sources, but EADS is a financial black box so it isn't easy to figure out whether money improperly provided by European governments to develop commercial transports is being used to reduce the cost of the tanker bid. EADS clearly would need to come up with billions of dollars in concessions to match Boeing's price on the 179 tankers the Air Force plans to buy. Company representatives say their plane is newer than the Boeing plane, and will be built in Alabama where costs are low, but that barely begins to explain how they can close a $50 million pricing gap with the Boeing plane.

The Air Force is trying real hard to stay out of the subsidies debate, but the issue will become unavoidable if it picks the European tanker again. Members of Congress will want to know how EADS got its price so low, and whether taxpayers are in effect being asked to reward the company for decades of violating trade rules. President Obama has assured French President Nicolas Sarkozy that the selection process will be "fair," but it's a safe bet that in the end, one of the two teams competing for the tanker program is going to head home feeling that it was cheated.

Loren Thompson Chief Operating Officer at the Lexington Institute is a public policy think tank based in Arlington, Va.

France EADS to Cut Bid to Win U.S. Refueling Tanker Order From Boeing, FTD Says
By Aaron Kirchfeld - Jul 12, 2010

European Aeronautic, Defence & Space Co.’s bid for a U.S. refueling tanker order may be below previous offers in 2008 and 2009 as the company aims to undercut Boeing Co. on pricing, Financial Times Deutschland reported, without saying where it got the information.

The refueling tanker based on the Airbus A330-200 may cost at least 10 percent less than the last offer of 184 million euros ($232 million) per aircraft, the newspaper said.

To contact the reporter on this story: Aaron Kirchfeld in Frankfurt

Looks like the US isn't the only country with new refueling tanker challenges...

EADS air tanker deal faces scrutiny in UK defence review
Reuters News 07/12/2010
Author: Adrian Croft
© Reuters Limited 2010.

LONDON, July 12 (Reuters) - British Business Secretary Vince Cable has submitted a cost analysis of a 10.5 billion pound ($15.75 billion) military air tanker deal to officials conducting a defence review, his department said on Monday.

Cable told a British newspaper he was seriously concerned about the contract to lease 14 converted Airbus A330 tanker aircraft to Britain's Royal Air Force (RAF).

"Vince Cable was provided with a dossier analysing the costings of the project. In recent weeks he has passed the dossier of information to the Ministry of Defence (MoD) and Treasury," a spokeswoman for Cable's department said.

She did not say who provided the dossier.

Cable's information has been given to "the authorities who are reviewing this project as part of the Strategic Defence Review," the department said.

Britain's two-month-old Conservative-Liberal Democrat coalition government has launched a wide-ranging defence review, which is expected to set the stage for cuts in defence spending to help rein in a record peace-time budget deficit.

All major defence programmes are under scrutiny.

The previous Labour government awarded a consortium led by Airbus parent EADS the contract to replace Britain's ageing fleet of mid-air refuelling planes in 2008 under a public-private partnership scheme.

CONSORTIUM DEFENDS CONTRACT

The tankers will be owned by the AirTanker consortium, led by EADS and also including Britain's Cobham, Rolls-Royce and VT Group, recently bought by Babcock, as well as France's Thales.

The 27-year contract includes maintenance and training. The government said at the time it would create 600 jobs in Britain and safeguard up to 3,000 others.

The Sunday Times newspaper quoted Cable as saying a well informed source had given him "detailed information on massively expensive and unnecessary commitments" under the programme.

It said he wanted a "fuller investigation" of the programme.

An AirTanker spokeswoman said the consortium was awarded the contract through a competitive process. "The MoD's final approval was made with a full understanding of all the costs and risks of this deal and the alternatives," she said.

An MoD spokeswoman said the defence review would look at all projects. "Until the review concludes in the autumn, it would be inappropriate to speculate about final decisions," she said.

The Sunday Times said the MoD would have to cover redundancy payments and pay 75 million pounds per aircraft if the contract was shelved.

Howard Wheeldon, a senior strategist at broker BGC Partners, said it was surprising Cable was calling for an inquiry given the urgency of replacing the current fleet.

"Whilst I have no doubt that there are cheaper aircraft lease deals on the market I am satisfied that the government is not being ripped off," he said in a note.

(Additional reporting by Rhys Jones, Tim Hepher; Editing by Stefano Ambrogi; Editing by David Cowell)

[bdk]

At least the economy is good for lobbyists!

Boeing, EADS spend $125 million lobbying
Published: July 14, 2010 at 8:45 AM

WASHINGTON, July 14 (UPI) -- In order to snatch the lucrative U.S. Air Force tanker contract, Boeing and its European rival EADS have spent nearly $125 million on lobbying in the past years.

Boeing and European Aeronautic Defense and Space Co., the parent of European plane maker Airbus, have been locked in a 9-year battle over a $40 billion contract to outfit the Air Force with 179 in-flight refueling tankers. For EADS, winning the contract could mean gaining a stronger foothold in the world's largest military market. Naturally, Boeing wants to prevent that.

In a bid to increase chances for their respective bids, the companies have spent more than $100 million on lobbying U.S. decision makers, figures from OpenSecrets.org, which tracks lobbying in U.S. politics, indicate.

Boeing during the past four years spent $54 million on lobbying efforts. EADS and its U.S. partner Northrop Grumman in the same period spent nearly $70 million on lobbying, OpenSecrets.org says. Northrop Grumman pulled out of the bidding in March, arguing the bidding conditions clearly favor rival Boeing.

Moreover, the companies spent several millions touting their planes in ads in newspapers, magazines and broadcast outlets.

Both Boeing and EADS this week submitted their official bids for the contract, a move that is linked to even more costs. The Hill, a Washington newspaper, reports that EADS North America spent $75,000 on printing its bidding materials. The company printed 50,000 pages -- six copies of its bid of more than 8,000 pages. Each set weighs around 100 pounds, the newspaper reports.

The Air Force has been eager to replace its Eisenhower-era tankers and is to announce a bid winner this fall.

The Europeans are throwing their KC-45 tanker, a large plane based on the Airbus A330, in the race. Boeing is bidding with an altered version of its 767, called New Generation Tanker.

The Generation Tanker is slightly smaller and probably cheaper than the KC-45; the European plane has logged more flight testing hours and is closer to serial production, experts say.

Both companies have argued that winning the contract would create and support thousands of U.S. jobs, in a bidding war that goes back several years.

The KC-45 won the contract in February 2008 but the decision was overturned four months later by the Government Accountability Office after Boeing challenged it. The GAO said it found problems with the bidding and the contract is up for grabs.

Moreover, both sides are accusing each other of profiting from illegal government subsidies.

[262crew]

[bdk]

Two of the Japan Air Self-Defense Force’s KC-767 aerial refueling tankers traveled to Eielson Air Force Base, Alaska, in June to participate in one of the biggest joint large-force military exercises of 2010.

The Japan Air Self-Defense Force sent two KC-767 tanker aircraft to support their E-767 AWACS and F-15J aircraft and transport their support crews to Alaska and back to Japan.

<SNIP>

Red Flag-Alaska is a Pacific Air Forces-directed field training exercise for U.S. and coalition forces that is staged on the Joint Pacific Alaskan Range Complex. At the complex, one of the largest air-ground facilities in the United States encompassing nearly 67,000 square miles of the Eastern portion of Interior Alaska, the crews hone their warrior skills flying various combat scenarios in simulated combat conditions.

More than 2,500 personnel and 124 aircraft representing Shaw Air Force Base, S.C.; Davis-Monthan Air Force Base, Ariz.; Yokota Air Base in Japan; Kadena Air Base in Japan and Hickam Air Force Base, Hawaii, joined units from the Louisiana and Florida Air National Guard for the 10-day Red Flag event.

A U.S. Marine Corps Harrier squadron from Marine Corps Air Station Yuma, Ariz., also participated.

Boeing has delivered four KC-767 aerial refueling tankers to JASDF. The aircraft are configured with an open architecture cockpit, an advanced Boeing air refueling boom and an advanced Remote Aerial Refueling Operator (RARO) II system. The JASDF selected the convertible freighter configuration, allowing it to carry cargo or passengers, while maintaining its primary role as an aerial tanker. With a convertible freighter interior, the Japan tanker can be rapidly converted from all-passenger to all-cargo configurations.

In March 2009, JASDF declared Initial Operational Capability (IOC) for the tankers when the third aircraft was inducted into the fleet. In April 2010, Japan’s Air Self Defense Force completed its Operational Evaluation of the tanker fleet at Komaki Air Base.

[bdk]

Boeing CEO Calls Tanker Contest 'a Price Shootout'
The Wall Street Journal Online 07/20/2010
Author: Peter Sanders


FARNBOROUGH, England–The protracted and acrimonious contest to supply the U.S. Air Force with a new fleet of aerial refueling tankers will come down to how cheaply rivals Boeing Co. and Airbus are willing to sell their planes to the Pentagon, according to Boeing's chief executive.

"It has become a price shootout between companies with two capable machines," Jim McNerney, Boeing's chairman and CEO, said in an interview at the Farnborough International Air Show Tuesday.


The two aerospace giants are competing for a $35 billion contract to build a fleet of 179 new tankers for the Air Force. The new fleet of Boeing jets would replace the current aging fleet, some of which have been in service since the Eisenhower era.


On Saturday, Louis Gallois, chief executive of Airbus parent European Aeronautic Defence & Space Co., said that his company plans to "fight like hell" to win the contract but that his "board does not want to lose money" to win the business. "We prefer to lose [the contract] than not make money," he said.


In the past, Mr. McNerney and other Boeing executives said they expected Airbus might underbid Boeing.


"We plan to bid very aggressively, but there is a point beyond which I can't go because I have a duty to my shareholders," Mr. McNerney said on Tuesday.


Boeing is proposing to use a modified version of its 767 wide-body jetliner, while Airbus's plan calls for a modified A330 passenger jet that's slightly larger than the 767.


Both companies submitted their bids to the Pentagon earlier this month. A winner is expected to be announced Nov. 12.


In January 2008, Airbus was awarded the contract to supply the new fleet of aerial tankers, but Boeing protested the way that the contract was decided and the decision was eventually overturned, leading to the latest competition.


Separately, Mr. McNerney addressed one of the hot topics of this year's show: the future of Boeing's best-selling narrow-body 737.


In recent weeks, Boeing executives have said that the company will decide by year-end whether to design an entirely new jet or to make modifications—including a new, more fuel-efficient engine—to its current offering.


Whatever decision the company makes will likely have an impact on its current backlog of orders for the 737, which currently stands at more than 2,000. Boeing recently raised its 737 production rate to 35 planes a month to help meet demand.


Mr. McNerney said the question largely rests on whether the company thinks enough new technology will exist by 2020. "If by 2020 the technology is real, re-engining doesn't make sense," he said. "But if it's going to be 2025 before that new technology is ready, then the case for re-engining strengthens. And we're not just talking about engine technology but systems and materials as well."


Airbus is also expected to decide later this year whether to offer an entirely new plane or to add new engines to its A320 family of narrow-body planes.


Boeing engineers, Mr. McNerney says, are also studying whether they will build a new plane out of the traditional aluminum or use composite material like the type used on the new 787 Dreamliner.


"I don't think we know yet if [any new plane] will be predominately aluminum or composite," he says. "Certainly, we'll use more composite and titanium components on whatever we build in the future."

[bdk]

Air Force's tanker deadline looks in doubt

The Air Force likely will miss its November target for awarding the contract, aerospace analysts say.

By Michelle Dunlop
Herald Writer

The U.S. Air Force has four months until it's slated to award a $35 billion contract for new refueling tankers, but already analysts are casting doubt on whether the Pentagon will make its deadline.

"The entire process is likely to slip into 2012," Scott Hamilton, analyst with Issaquah's Leeham Co., said Monday on his Web site.

The Air Force's quest to replace 179 of its Eisenhower-era KC-135 tankers has dragged on for nearly a decade. In its third attempt to award the lucrative contract, the Air Force has three competitors -- the Boeing Co., EADS and duo U.S. Aerospace and Antonov -- vying for its prize. The Air Force previously said it wanted the winner to begin work in November.

For Boeing, the tanker contract means keeping its 767 jet production line alive for years to come here in Everett. Boeing is in the process of moving its 767 line into a new spot in the Everett factory, a move that's expected to be done by year's end. The company also is implementing lean manufacturing processes to reduce waste and improve efficiency.

After Boeing reported its quarterly earnings last week, Morgan Stanley analyst Heidi Wood expressed doubts in a note to investors that the Air Force would meet its November target for announcing the tanker contest winner.

Hamilton believes there's a good chance the process will slide into 2012. The losing competitor is likely to protest the Air Force's decision to the Government Accountability Office, which could drag the contest on for months.

In 2008, the Air Force awarded the contract to Northrop Grumman and its partner EADS. Boeing successfully protested the award, leading the Air Force to call off the contest until after the 2008 presidential election, when the new administration took office. Nearly two and a half years later, the contract has yet to be awarded.

The timetable for the contest was disrupted earlier this year, when Northrop Grumman withdrew, leaving EADS to go it alone. The Air Force extended the bid deadline by 60 days to allow EADS to compile a solo bid. Airbus' parent company, EADS would assemble its tanker, based on an Airbus A330 jet, in Mobile, Ala.

Although Alabama officials recently traveled to the Farnborough Airshow near London to tout the state's abilities and to Airbus' facilities in Toulouse, France, to learn more about its manufacturing process, not every one in the region is convinced EADS has the political capital to win. Just last week, the Birmingham News' editorial board said it doesn't exactly share Alabama officials' optimism. Over the past few years, the editorial board noted "repeated meddling by Boeing minions in Congress" to thwart EADS from winning.

"Frankly, the odds don't look so good for EADS," the newspaper said.

The U.S. Aerospace/Antonov team was late to the process and most analysts say its unlikely their bid will be taken seriously.

Hamilton notes, however, that if the contest is delayed, Boeing potentially could lose one of its most adamant supporters in Congress. Sen. Patty Murray, D-Wash, is in a tough battle with Republican challenger Dino Rossi. Murray holds a key seat in the Senate's appropriations committee and recently began airing campaign commercials featuring Boeing workers.

Still, Boeing would have support in the House from Rep. Norm Dicks, D-Wash., who holds a powerful position in Defense appropriations.

[Enemy Ace]

They need to just flip a coin and buy whatever.

[The Inspector]

Sure, but now it'll be some time after the New Year (they just haven't specified which New Year)

[michaelharadon]

Even more drama: http://www.wired.com/dangerroom/2010/08 ... re-absurd/

[Iclo]

It's not to be aggressive, but Bdk really, you don't have any personnal opinion on the discussion to develop ?

Do you support the oppinion that equipment for the USAF could only be buy from US providers, or not ?

[Enemy Ace]

Maybe I'm just in a generous mood this morning but after all the US aircraft the NATO partners have purchased over the years (think F-86, F-100, F-4, F-5, 135, C-130, F-16, F-18 Etc Etc Etc) would it really be so out of line to buy a significant US military airplane from Europe?
The fact is both the Airbus and Boeing are good airplanes, The USAF needs a new plane, quit screwing around and move on.