During the best of times, large ticket defense contracts are highly sought after plumbs. High profile successes that politicians can point to as a great example of taking care of their home state or district. For that reason, the political maneuverings engaged to secure a prime contract are often Machiavellian.
Sometimes the most critical aspect is the one that gets the least attention, is the US Military getting the best tool available, at a reasonable price.? Making the procurement procedure fit the needs of the supplier can and often does have a direct impact on the warfighter.
Case in point the DOD requirement for the long overdue replacement of the Air Forces Tanker Fleet. For the last two years, Boeing and a partnership of Northrup and Airbus (European Aeronautical Defense and Space Co.) have battled for the Pentagon’s $40 billion dollar bid to replace the tanker fleet.
February, 2008, the Pentagon announces that Northrup has been chosen to supply tankers built on the Airbus 300 design. Boeing protested the award and the Government Accountability Office overturned the decision. Boeing’s stipulation that the terms so favored Northrup/EADS that the process was far from fair and transparent.
According to noted Defense Policy Analyst at the Lexington Institute, Loren Thompson, the GAO findings “where so sweeping and definitive” that the airforce had no choice but to start the competition over.
Now the political firestorm starts, this time with the wave beginning overseas. From President Sarkozy of France to Gordon Brown of the UK all called the decision a blight on the Obama administration. The deep south gulf States of Alabama and Mississippi have mobilized their Congressional delegations, Senators and Governors to pressure the DOD into re-considering the specifications for the new tanker. Both states stood top gain a couple of thousand jobs with aircraft assembly.
So why did Northrup drop its bid? Originally, the specifications were custom tailored to the A300 airframe, a very large aircraft. Northrup had long based their marketing strategy on convincing the Airforce that the bigger aircraft was more practical and better fit Air Force mission parameters.
But does it?
The GAO findings were very straight forward, the Northrup-EADS plane was not cost competitive with Boeing’s existing 767 Platform. Boeings Tanker was already being delivered to the Italian and Japanese Air Forces and had won the previous competition prior to AirForce cancellation. According to the Lexington Institutes Loren Thompson, “Airbus would be more expensive to build and operate even with subsidies”. Looking at the real requirements for a widely deployable tanker, with runway specifications similar to the C-17, the Air Force needed a simpler, smaller aircraft solution.
Seeing the failure of the bigger is better strategy, Northrup decided to cut its losses and pull out. The finger-pointing will continue but the focus needs to remain clear, the Air Force urgently needs to replace its fleet, whose mean aircraft age is 47.
David Robison
