Congressman Tiahrt petition re: KC-X Tanker

[skymstr02]

Boeing cannot lose anything that they were not awarded. No jobs were lost by losing this contract. Boeing was not building 767 tankers for the US Government, they wanted to though.

[CAPFlyer]

Boeing cannot lose anything that they were not awarded. No jobs were lost by losing this contract. Boeing was not building 767 tankers for the US Government, they wanted to though.

I'm sorry, but did you miss the entire evolution of how we got to here?

Boeing WON a lease contract for 100 KC-767s.

Boeing then WON a competition with EADS/NG for the KC-X.

Both times, they were then told that they didn't win (even though they had the paper in their hands that they did) first because a politician thought that Boeing was trying to "profit rape" the government and then because a 2nd tier government employee and 3rd tier Boeing executive acted inappropriately. Then to add to the insult, they were kicked in the groin when the RFP was changed and caused an unfair competition in which they were not told what the rules really were.

BTW Randy, the F-23 with the upper vectoring nozzles was of a higher sustained turning speed than the F-22 in addition to better roll rate and a higher supercruise and top speed than the F-22. The problem "officially" that the USAF stated was that the winning aircraft had to have full thrust vectoring, but yet (again) this was never part of the official RFP requirements, so yes, it was a valid argument to bring up.

[bdk]

Boeing cannot lose anything that they were not awarded. No jobs were lost by losing this contract. Boeing was not building 767 tankers for the US Government, they wanted to though.

Boeing is already redeploying employees in Wichita. What are you talking about? This also accelerates the closing of the 767 line. When the plan is for BCAS to produce 737, 747, 767, 777 and 787 simultaneously and the 767 goes away, what do you think happens?

[JDK]

Hi CAPFlyer,

I appreciate your detail, but that's not what I'm commenting on. In your overall basic retail theory, you provide what the customer wants - not what they say they want, but what they're going to buy (and, hopefully, where you can make a profit.) IF Boeing were genuinely surprised by the change of heart, then there was a failure in Boeing's ability to keep up with the game, whether it was behind closed doors, deals being made with Airbus around the back or whatever. As bdk's said, we aren't taking 'rubes' here anywhere, and if Boeing weren't able to compete with Airbus to get the deal (in whatever way it took) then that remains their shortcoming. (Which I agree it tough, unfair, but you aren't seriously expecting me to feel that a multi-billion international Company needs us to feel sorry for it? If they aren't able to play and win...)

Both times, they were then told that they didn't win (even though they had the paper in their hands that they did) first because a politician thought that Boeing was trying to "profit rape" the government and then because a 2nd tier government employee and 3rd tier Boeing executive acted inappropriately. Then to add to the insult, they were kicked in the groin when the RFP was changed and caused an unfair competition in which they were not told what the rules really were.

So they didn't keep up with Airbus. Who said these process were straightforward and all on the table rules? Of course there's tricks and wrinkles to the thing. Boeing aren't up to winning the contract because it's not 'fair'?

I'm sure if you try really hard you can find a defenc/se contract that was awarded above board on a truly 'fair' basis, but I'm d@mned if I can think of one in the history of aviation. In the 1960s Australia's domestic lightplane business was killed by cut-price Cessnas imported from the US. It wasn't 'fair', but there's no use whining about it.

Losers can always find excuses, and try for a recount, whatever the situation. Boeing d@mn well know how to win contracts, and if they didn't win this one it was because they failed to do what was required. (Sure if you have a Boeing stake, that's a big disappointment.)

(Just my opinion, I am, and remain ignorant of current defens/ce purchasing, lots of good input here, no disrespect...)

Regards,

[b29flteng]

In my un-educated opinion, neither airplane would be a good tanker. About four years ago I chatted with a Boeing engineer from Wichita that worked on the project. In simple terms: The 767 is built with the minimum amount of metal to make it safe for airline use, i.e. metal thickness. When the KC-135 was built the engineers would come up with say .032 skin thickness for a certain part, and use .040 instead just to be safe. The 767, and all airliners are now built to the minimum 150% standard, where as the KC-135 would make the 200% standard. He mentioned a fuel manifold that needed to go through the front spar of the 767, it needed a huge doubler and additional stiffeners to make it work, while on the KC-135 it would have taken just a small doubler. Another thing is they brought in some "Boomers" and they said the video system, instead of the man-in-the-pod system used on the KC-135, would not work very well. Boeing had problems with an all electric boom, compared to the hydraulic boom on the 135. He said they had an inadequate hydraulic system on the 767 to handle the load with a hydraulic boom. They had questions about if you lose an engine you lose half of your electrical system. In a nutshell, he said the KC-767 would look like a 767, but that was the only common thing between it and an airliner 767. I believe the A-330 will have the same problems. I don't have any answers, just an opinion.

[CAPFlyer]

When the KC-135 was built the engineers would come up with say .032 skin thickness for a certain part, and use .040 instead just to be safe.

First, part of the plan on both the 767 and A330 was to beef up the structure to support the new mission.

Second, the assertion quoted above unfortunately isn't quite accurate. If they'd done as you said, then there would not have been the wing skin cracks that developed in the late 1960s that have required 3 subsequent reskins of the lower wing of the KC-135 fleet. It also would not have resulted in the problem with the KC-135's exploding in mid-air due to fuel vapors as they would have insisted on the originally planned nitrogen inerting system that was deleted because the Air Force thought it'd be too hard to support (like the need for de-mineralized water wasn't...).

No airplane in history has ever been "perfect" for the job it performs. But if you are diligent about working with the user to make it as well as possible, you can get close, but it requires full disclosure by all parties on what is expected of the airplane and what it can realistically deliver.

[b29flteng]

Like I said, uneducated and simplified opinion... Remember the 135 was built using slide rules and was never intended to last this long. Also, remember back in the 1950s, military aircraft were in service for only about 10 years before the next generation jet came on line. Now they're suppose to last for 60 years or so. So your bound to have airframe longivity problems. How long ago was the contract for the F-22 won, 1985? It's just been in service for about a year now.

[skymstr02]

Boeing cannot lose anything that they were not awarded. No jobs were lost by losing this contract. Boeing was not building 767 tankers for the US Government, they wanted to though.

Boeing is already redeploying employees in Wichita. What are you talking about? This also accelerates the closing of the 767 line. When the plan is for BCAS to produce 737, 747, 767, 777 and 787 simultaneously and the 767 goes away, what do you think happens?

Then Boeing deserves to get hit in the wallet, its poor business practice to bet on the come and staff for a contract with no signature on the bottom line. Those Boeing employees can move from Wichita to Mobile now.

Boeing lost, Northrop Grumman won, get over it already! The bottom line is that the USAF will be getting a superior product to perform its mission. Passing gas is only a part of the aircrafts mission.

The seven six can go away, its technologically behind the times, the seven eight is going to be its replacement. The intended military contract was the only thing that was going to keep the seven six line open longer than it had to be.

[Broken-Wrench]

Like they say down south "Ain't nothin over" They are going to fight this tooth and nail.

[CAPFlyer]

...for a contract with no signature on the bottom line.

That's the problem. They had a signature on the bottom line. Not once, but twice. They twice started ramping up with a contract in hand only to have the contract in hand get yanked out from that hand and told "we don't like the contract so we're going to redo it". It's government strong-arm tactics out of control.

[bdk]

...its poor business practice to bet on the come and staff for a contract with no signature on the bottom line. Those Boeing employees can move from Wichita to Mobile now.

The staff was already there for the 767 tanker being manufactured for the Italians and the Japanese. There are only a few aircraft though, so the folks involved in that program will be excessed. Are you expecting the Boeing employees from the 767 line in Puget Sound to move to Tolouse?

I deal with Government contracts on a daily basis is my job.

I'm curious what kind of commodities, because you obviously are out of touch with the way aerospace procurement contracts are let. Have you ever heard of "long lead funding"? Do you know that Boeing buys materials for the C-17 at risk before they even are contracted by the government to build those aircraft? If they didn't production would have ended 3 times already and the program would have been unaffordable for the government to restart. Is that a good or a bad business practice? Boeing puts itself at risk for the benefit of the government. McCain was instrumental in blocking multi-year production contracts which allow defense contractors to economize through long-term material procuremnet contracts. Congress now authorizes C-17 procurement annually for the following year, even though the lead time for some materials can be up to three years. So the program is under the threat of ending every single year. The current C-17 contract is for aircraft through 2009 only. Excess capacity is also low at machine shops because of the boom in commercial aircraft construction so it is even hard to buy machine time slots years into the future. This is the environment under which defense contractors now work.

More in the news:

http://news.yahoo.com/s/ap/20080308/ap_on_el_pr/mccain_air_force_tankers[/quote]

[JDK]

Are you expecting the Boeing employees from the 767 line in Puget Sound to move to Tolouse?

Well, the food's better.

Boeing puts itself at risk for the benefit of the government.

Please, Brandon, that's bit disingenuous. They aren't a philanthropic institution! Boeing venture massive risks on the expectation of making substantial profits from the government; and fair enough. For all the size of the issue, that's exactly the same principle of any shopkeeper buying goods in the hope that people will buy them, and any manufacturer buying raw material hoping there'll be a market for their product. The risk is exponentially greater for Boeing, as it was, say for the 747 project, and on the other hand the 707 project risk was eased by defense procurement.

The issue is size. Lose the contract, and the company and thousands of people lose out. So, again, how was Boeing surprised by the change of deal? Can't you get the quality of industrial intelligence you used to?

I've been thinking about the 'grab an excuse' use of the 'offshore' defense manufacturing being a 'risk' for the US. Certainly it's nice to have the entirety of one's defence structure entirely within the national borders, and theoretically the USA is big enough to do that. But there's a couple of things.

With the growth of defence projects, multi-national has simply become a fact for the rest of the world, who've had to accept it; it just looks like the US is joining everyone else, due to the continuation of that cost/complexity issue.

Secondly the USA has only managed to do that for brief periods of history - 1942-80, perhaps, and perhaps in the War of Independence. The US' involvement in the Great War was heavily supported by equipment from the allies, which rolled into the 1920s.

Thirdly, wars are about trade (among other factors) one of the elements in that is buying and selling internationally to advantage while the pressure is on, due to the fight. It's not just neutral countries that can show a profit in wartime, or as a consequence of military purchasing, and wars cost lots of things, including independence at times. It's easy to find examples of foreign equipment being integral to any country's defence. The US development of the Manhattan Project relied on, and used, significant foreign equipment, raw materials and personnel, although the US has a lot to be proud of for pulling it off.

Just some random thoughts.

[bdk]

They aren't a philanthropic institution!

Agreed, I wasn't intending to suggest any such thing, but a previous poster made it sound like you just make a proposal and the dough just starts rolling in when you win and that Boeing was stupid to take any risk whatsoever.

US companies have been working offsets for years. You buy airplane X and we'll give you a contract to build parts for airplane Y.

I reiterate, if the competition was fair and the A330 tanker is the better product, I'm OK with the decision.

So, again, how was Boeing surprised by the change of deal? Can't you get the quality of industrial intelligence you used to?

This is a very sore subject at Boeing. One of the ethics scandals at Boeing had to do with an employee in posession of a competitors proposal information he should not have had (he was a former employee of the competitor). We are instructed to run away as fast as we can, even from things legal, if there is the slightest chance that there might be just an appearance of impropriety even if none exists. Does Airbus hold ITSELF to the same standard? Does the US government hold Airbus to that same standard? Can they? I don't know that's why I am asking, I am making no allegations.

[JDK]

Just keeping you honest bdk.

Yes, of course you've got to venture capital to make capital; again it's not unusual, it's just big risks in this size of business. I agree with you that Boeing might be hobbled by having to act with the utmost propriety; that sure is hard in business, as we all know from the regular occasions when someone gets caught doing otherwise.

The imbalance would be similar in bias to that which companies trying to compete with US organisations regularly face; which is why no-one outside the US is going to have a shred of sympathy for Boeing or American angst about it.

I reiterate, if the competition was fair and the A330 tanker is the better product, I'm OK with the decision.

And I reiterate, and mangle a quote, "You find me a 'fair' defenc/se decision, I'll show you a hundred biased/fixed/unfair/advantaged ones."

Customers big or little have screwed around with supplies since the dawnatime. It's tough. It's neither unusual or remarkable, IMHO.

Regards,

[skymstr02]

Do you know that Boeing buys materials for the C-17 at risk before they even are contracted by the government to build those aircraft?

Those costs are reimbursable through a contract mod, just go to www.defencelink.mil/contracts, and you can see how many times this has taken place. Pratt, Boeing, and Lockheed Martin all do this.

Boeing just got bit in the butt by betting the farm on this, according to you, by anticipating winning this contract.

We all agree that Boeing will contest this, but the GAO is likely to listen to the customer (USAF), and review the final version of the RFP. They will go with the best value and which product meets all the criteria of the RFP. The Boeing product did not meet all aspects of this criteria.

By the way, I work for a large govt contractor, (ticker symbol LLL), so I do have a fair amount of expertise in this subject matter.

Speaking of the C-17, why doesn't Boeing staff up for civillian C-17 production in Long Beach? This way, they could keep that line open too.