First things first, for those of you readers not bored with the Northrop Grumman pricing dispute story, I'll keep this short in an effort not to lose you! The story still goes on!
The company hasn't changed its position, but could it be floating a balloon, or making a veiled threat? Lexington Institute Chief Operating Officer Loren Thompson today released one of his issue briefs, which typically address in public concerns of a particular company on a particular issue. The brief, entitled, "Tanker Wars: Why Northrop Grumman Thinks It Can't Win" outlines the gripes Northrop has publicly discussed. If you take a look at the last sentence, it reads: "Given the high risks associated with an 18-year, fixed-price contract, Northrop Grumman may not bid at all unless there are changes to the process."
Wait a sec ... we asked NG that question last week, and they said it was "premature" to discuss. Northrop Grumman spokesman Randy Belote assures Aviation Week that the company continues to "stop short" of threatening not to bid though a new "draft RFP is essential."
But, is Thompson floating a balloon? Perhaps Northrop is considering a no-bid threat. It worked in the last competition, when a threat resulted in a new evaluation factor being added. And, it was that evaluation factor that is widely thought to have got the company its win!
This wouldn't be the first time Thompson publicly discusses a thorny issue that a company is a bit mum on.
But, we'll leave that to stew a few days. Besides, a real no-bid threat won't come until the actual RFP comes out next month, I would suspect. It is a bit of a nuclear option ... so both companies would be wise to keep it in their back pockets.
On to plumbing ...
A week or so ago, one of our astute readers questioned whether Boeing's fifth-generation boom (on the Italian and Japanese tankers) can measure up to the Air Force's requirement of passing 1,200 gallons per minute, as stated in the draft RFP. That requirement flows from the demand of the C-5 when it takes on gas.
Officially, Boeing says the fifth-generation boom can offload 900 gallons per minute, and its KC-767 Advanced Tanker (proposed in the 2007-2008 competition) "could offload more than 1,000 gallons of fuel per minute," though a specific number wasn't provided. But, it doesn't have a boom on the shelf that can handle this need. "We'll meet the mandatory 1,200 GPM requirement for KC-X and use our experience building booms to do it," says Bill Barksdale, Boeing's KC-X spokesman.
If the USAF sticks with this requirement for the final RFP, it will be interesting to see how it scores the two bids. Using its pass/fail system proposed in the draft RFP, it could be the two get the same score even though the EADS-build boom is already designed to handle this fuel flow (as stated by Belote in last week's press conference). So, one could argue it is "on the shelf," or at least more so than its competitor (unless Boeing has a secret boom somewhere pumping away).
So, this is a good point to ponder. If Boeing's boom would require more R&D to meet the requirement, should the USAF have leverage to score risk? Northrop says that isn't possible given the current RFP, and Boeing continues to be silent on the draft.
Or, perhaps the service is trying to keep the process as free of subjectivity as possible, which means either bidder passes or fails regardless of whether it truly has something off the shelf or not.
Let us know what you think ...
If you fail in the project, either timeline or performance, you get penalized in the payments...
And NG/EADS' point is that in trying to make the process as 'protestproof' as possible, they have let the needs of the selection team trump the needs of the warfighter
> The brief, entitled, "Tanker Wars: Why Northrop Grumman Thinks It Can't Win" outlines the gripes Northrop has publicly discussed
i didn't find Loren's analysis that persuasive
> a plane that is intrinsically more expensive to build
as far as i can tell, this is factually incorrect, the A330 is quite a bit cheaper to manufacture because it uses more modern (ie more automated/less labor intensive) fabrication techniques
we know the evaluated prices, which included milcon and fuel consumption were nearly identical last time
what has changed?
1. fuel usage calculations changed from
25 years * 750 hours/year = 18,750 hours
to
40 years * 489 hours/year = 19,560 hours
a 4.32% increase in fuel usage which favors the 767
2. future fuel cost calculations have changed. I don't know enough to understand how they changed, but apparently Boeing isn't happy about it. That could easily wipe out any gain they made in fuel usage
3. milcon was evaluated previously, but the gao concluded their evaluation method was 'inadequate'. whether the new method will increase or decrease costs for the KC-30 relative to the KC-767 is unknown (to me anyways)
4. previously price was adjusted for risk. now it isn't. clearly a huge win for boeing
5. now IFARA directly modifies the acquisition price (but not lifecycle cost i believe). using the ifara numbers from the last competition, this would reduce the KC-30's acquisition cost by 5.79%. But since Boeing isn't proposing the KC-767AT, the ifara advantage will be even great. Clearly a huge win for EADS/NG
6. Boeing isn't offering the KC-767AT, but a (presumably) cheaper 767 variant
> and its KC-767 Advanced Tanker (proposed in the 2007-2008 competition) "could offload more than 1,000 gallons of fuel per minute," though a specific number wasn't provided
how close is the Gen6 boom to being ready? have they worked on it all since the last competition?
or would they try to 'upgrade' their Gen5 boom?
although presumably not as difficult, it is also worth keeping in mind the other side of the coin
the tanker has to RECEIVE at 1200gpm too, and the KC-767 can only do 900
how hard/risky is it to upgrade the receptacle and associated plumbing? no idea, but it makes me curious
These days "5th generation" means "nonsense".