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  • Would EADS Have To Protest KC-X If It Has Found Fault?
    Posted by Robert Wall 2:46 PM on Mar 01, 2011

    In the wake of Boeing's win of KC-46A last week, we here at Ares had an interesting discussion on the topic of whether EADS should protest given the prospect of a KC-Y competition. But now that the losing bidder has been debriefed, I want to frame the argument slightly differently.

    EADS says it is still assessing and evaluating everything it learned from the Pentagon in its Feb. 28 session. There are many who simply want the long-national nightmare to be over and hope EADS will just close the book on this one. The Air Force, for one, would likely breath a huge sigh of relief -- that is until it has to start managing the fixed-price development and make sure Boeing delivers on time and cost.

    But there are other issues to consider. One point, for instance, is EADS management's responsibility to its shareholders. If the company truly learned something it believes gives it cause to protest, can it really walk away from pursuing a protest just to preserve its long-term potential access to the U.S. Defense Dept. market? There is no guarantee KC-Y will emerge or any of the other programs EADS may have its eye on.

    So would walking away from a protest not breach management's fiduciary responsibilities? After all, this is a massive, $35 billion program, so is EADS not required to do all it can to secure the deal, having taken the decision to compete in the first place?

    There is, of course, always the chance the losing bidder will not find anything of substance to fault -- although the interpretation of what is "fault" may depend as much on whether a decision to protest or not has already been taken.

    Tags: ar99, EADS, Airbus, Boeing

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