Northrop on Tanker: Try Again ... Please!

Pulling from its playbook last time around, Northrop Grumman told Defense Dept. officials today that it would not bid for the USAF KC-X aerial tanker replacement program under the standing request for proposals (RFP).

The company, which paired with Europe's EADS Airbus in what seems a perpetual tanker saga, indicated in a letter it could change its mind if the Pentagon makes substantial changes to the draft RFP.

“It is my hope that the department will elect to modify its approach to this procurement in a way that would enable us to offer our product for your consideration,” Bush wrote (See Northrop letter in PDF here.)

Defense leaders let known recently that changes to the source-selection plan for the U.S. Air Force’s $35-billion KC-X program were not likely to be substantial. Northrop executives have complained that the 373 pass/fail requirements outlined for qualification in the competition equally weigh less important items—such as water flow in sinks and toilets—with critical capabilities—such as fuel offload rates.

The USAF’s latest cost-shootout approach is also perceived by some observers as favoring the smaller tanker, presumably a Boeing 767-based solution (though Boeing has not announced a design).

Northrop’s offer could be based on the Airbus A330, in partnership with Europe’s EADS.

Whether Northrop’s latest move is just another maneuver toward a similar compromise remains to be seen, with some on Wall Street telling clients not to consider anything settled. “We are not counting [Northrop] out of the competition,” JSA Research analysts said.

Tags: ar99, Northrop, Boeing, tanker, USAF