US Air Force to regain control of tanker bidding

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The US Air Force is expected to resume control over a long-delayed aerial refueling airplane competition between Boeing Co and Northrop Grumman Corp, a Pentagon official said overnight.

“All intentions are to return the process to the Air Force,” said spokeswoman Cheryl Irwin.

Reuters notes Defense Secretary Robert Gates gave the Pentagon chief weapons buyer control over the program last summer after government auditors upheld a Boeing protest and faulted the Air Force’s handling of the tanker competition.

Air Force Secretary Michael Donley told the Senate Armed Services Committee the service was working closely with top Pentagon officials, including the new chief weapons buyer, Ashton Carter, to move ahead on the high-priority program.

“We’re about getting back on track,” Donley told senators.

He said current plans called for release of a draft request for proposals for 179 aerial refueling planes “within the next month or so,” and awarding of a winner-take-all contract in the spring of 2010.

Donley and Air Force Chief of Staff General Norton Schwartz both spoke out against a congressional initiative to accelerate the replacement of the existing KC-135 fleet and buy tankers from both Boeing and Northrop.

Donley said buying two different aircraft models would result in about $7 billion of additional costs, but did not give details on what was included in that figure.

Gates promised last week to provide lawmakers with details on the cost of a dual procurement strategy soon. Some lawmakers argue such a plan would avert further protests and delays in replacing the current fleet of more than 400 KC-135 tankers, which are nearly 50 years old, on average.

Donley said the Air Force had examined the data and a dual procurement strategy would add costs for development up front, as well as for logistics and training throughout the lifetime of the aircraft.

But he said the main issue was that the Air Force would need to buy about 24 airplanes a year, to achieve economic production rates for both companies — far more than the projected buy rate of about 15 airplanes per year.

“From a fiscal planning point of view it would take a huge dent out of our procurement plans going forward. That would be a considerable downside,” Donley said.

Schwartz said the Air Force had benefited from lower costs when it used competitive process to buy rival engines for fighter jets in the 1980s, but the situation was different now, given greater pressure on defense budgets.

“There’s some evidence that that works if you have a large enough program,” he said, adding, “There’s just not that much space in our budget.”

Two previous Air Force attempts to buy new tankers have failed. The first try, rooted in the post-Sept. 11 collapse of the commercial airliner market, fell apart amid a procurement scandal that sent two Boeing executives, one of them a former Air Force arms buyer, to prison for ethics violations.

Northrop and its European partner, Airbus parent EADS, won a second competition in February 2008, but it was canceled after federal auditors upheld the Boeing challenge.



Brigadier General Christopher Bogdan, currently military assistant to Carter, is moving to Wright-Patterson Air Force Base to become program director for the new tanker program, the Air Force announced last month.