Did the Air Force Buy the Pricier Tanker?

Did the Air Force Buy the Pricier Tanker?: The Air Force is being coy in responding to a flurry of news reports which claim that Boeing, Northrop Grumman, and the service all agree that the Northrop-EADS KC-30 tanker had the highest lifecycle cost of the two entries (the other being Boeing’s KC-767) in the KC-X tanker competition. Boeing protested the award, and the Government Accountability Office has been working for three months to determine whether the Air Force followed the rules. Reuters new service first reported that Boeing documents submitted to the GAO in April assert that USAF has conceded the cost issue and admitted errors in calculating costs. Working from a redacted version of the document it obtained, Reuters said the Air Force originally pegged the KC-30 life cycle cost at $108.1 billion, vs. $108.44 billion for the KC-767, but the service has since ceded a slightly better price for the Boeing airplane. Asked on Friday if the Air Force agrees with this assessment, a service spokeswoman told Daily Report that USAF is prevented by law from commenting directly about either company's bids. However, she said: “Any single document or set of documents, viewed by itself, without the broader context, could easily be misinterpreted. The Air Force stands by its process and its decision.” For its part, Northrop Grumman, in one of its daily e-mails broadcast to journalists about the tanker war, faulted Boeing’s backers for “trying to make a big deal about adjustments to the Air Force’s cost estimates,” and said that a “slight change” won’t alter the fact that the KC-30 “beat Boeing [in] four out of five” selection criteria. The GAO will make the call on June 19, but Air Force officials said privately they don’t think the GAO will overturn its choice.

—John A. Tirpak

6/16/2008

Verbatim

To Be Clear
“Just like in my business, the issues that go badly get all of the attention. I think, to be clear with you, there are many things that are managed well every day in the Air Force.”
—John Young, Pentagon acquisition executive, speaking to defense reporters on the state of Air Force acquisition, Washington, D.C., Nov. 20, 2008.

Verbatim

F-22 Options
“They have two choices. On January 21st, they can obligate the $90 million and decide there's some chance ... that they will buy the airplanes and they'd rather preserve the option to buy [them] at no additional cost to the taxpayer. Or, they could chose not to obligate the $90 million and accept that they still have a decision to be made between then and March 1st. But that decision may cost the taxpayer more money.”
—DOD acquisition czar John Young on how releasing only $50 million of the $140 million authorized by Congress to keep the F-22 production line active until March 2009 still preserves options for the new Administration, Capitol Hill, Nov. 19, 2008.