Skip to comments.Northrop Grumman won't bid against Boeing for tanker contract
Posted on 03/08/2010 11:28:46 AM PST by jazusamo
Northrop Grumman has decided not to bid in the Air Force refueling tanker contract, leaving Boeing's Everett-built 767 as the sole airplane competing for the $40 billion program.
A person familiar with the details said Northrop will announce its decision after the market closes today...
(Excerpt) Read more at seattletimes.nwsource.com ...
Good news for those of us in the Boeing system.
If they weren’t teamed with eurotrash for this I would be upset. As it is this is a win.
China will be entering the passenger jet market soon; will they have a tanker?
The govt will probably have to rewrite the RFP as they cannot have a sole source for a $40 billion contract.
After flying the Boeing-built KC-135 (modified 707 airframe) for years, I say GOOD on ‘em. The new tanker should be a Boeing; they’re the best, hands down.
Bad news for the Free market and especially for those of us who wanted to see it built in Union Free Alabama
I hear you on the union thing but Boeing has started their non union push, it’ll be interesting to see what happens.
I wonder if the bid would have served Grumman for growth or to sustain.
I wonder how much union pressure there was to go Boeing instead of Northrop Grumman. I despise unions and everything they do.
Thanks, I’ve heard others say they were great planes. They’re definitely a proven aircraft for the years they’ve been flying.
You have to remember that Boeing is based in CHICAGO. Additionally, the Machinists Union dominates Everett WA based Boeing where the plane will be assembled. Is there any doubt in anybody’s mind that the combination of Chicago and Union Politics has rigged this thing in favor of Boeing. I feel sorry for the good people of non-union Mobile Alabama who won this competition fair and square and lost it to political scheming.
I agree...Though everything isn’t built here from my understanding, there’s a great deal more of the plane built here and this will keep more money at home as well as more Americans employed.
Union pressure? YA THINK?
The aircraft the N/G bid used was not ideally suited to the job, it was TOO BIG!
Well, why should they? The government has already tossed them aside and picked a different group of campaign contributors to get the spoils from this particular bloated contract.
Just don't make the mistake of thinking there was one scrap of capitalism involved in this entire sordid affair, from any of the parties.
So why doesn’t Boeing agree to build it in Mobile?
I agree...though all of us down here in Mobile (where the plane would be assembled) knew that once the Kenyan got into the WH, that was the end of any fair competition for this contract. What I particularly find galling is all these folks that talk about the plane being foreign built when in fact Boeing outsources as much of the aircraft as Northrup does....however, because of the politics involved in this, the AF does NOT get the best aircraft! They get one built by one pretty corrupt company!
It would be but the non union Boeing plant is in SC and will be for a second 787 assembly line.
I read that the Airbus based tanker would have required expansion of facilities and heavier-built runways. Is this true ?
This won’t end well and unfortunately our warfighters will come out with the short end of the stick. JMO
They do have a non-union plant is South Carolina. Wouldn’t it piss off all their WA and Union supporters if they decided to assemble it there?
Agree. Non-union Alabama would have been a great place to build. (Oh, and by the way ORAG, so am I)
I'd change the article to read:
"Northrop executives concluded the risk attached to a fixed price contract precluded a low bid,
without which they felt they could not win against Boeing which, however, Boeing is desperate enough to propose."
Their unions have not been known for doing Boeing any favors and were probably even worse under MDC.
Another RFP because of a single bid?
It's called "attempted competition" and can go ahead with heavy handed price & cost analysis (throat cutting) because there is no competition available.
[Although I can imagine His Greatness announcing a do over just to prove that he is saving taxpayer's money - and driving costs into the next guy's administration]
Besides, the USG has already screwed this procurement up at least twice [recognizing some bone headed stupidity on the part of Boeing and one government employee] so that we are already way late to the game and those fifties era KC's aren't getting any younger.
You mean like the old SAC B-52 bases?
Once upon a time, Boeing was a fine and reputable company, but it is nothing but an adjunct of the Chicago Machine, now, aided and abetted by the equally corrupt unions.
Absolutely! They need to get on with it and start delivering new tankers to the AF. Though I live in WA I haven’t taken sides in this ongoing fiasco but haven’t liked the idea of EADS supplying us.
Boeing stuck it to the unions on the plant in SC for the second 787 line and the unions got just what they deserved. The Dem controlled state of WA was more or less in cahoots with the unions and Boeing stung them both.
Beats me. I don’t know where refueling calls home except I saw KC 135s and KC 10s at the airport in Honolulu.
It could be simpler than that. I seem to recall that John Murtha's replacement as Chairman of the House Appropriations Committee is the Congressman from Seattle.
Northrop had the better bid. Boeing had the better lobbyists. I guess I shouldn’t be surprised on who won, but it does make the whole proposal process seem unnecessary.
In the 60’s the heyday of SAC all KC-97s and KC-135s were assigned to SAC and co-located with B-52s at SAC bases.
It's not sole source just because only one outfit bids on it. It's sole source if you don't let anyone else bid.
IIRC, "here" would be Wichita Kansas.
Exactly. Americans would assemble it, and the economic benefit would remain in the U.S. and profits would go to the Boeing stockholders, rather than Airbus in Europe.
Speaking of non-union Boeing, the 787 Dreamliner is going to be built in Charleston, SC.
” It’s not sole source just because only one outfit bids on it. It’s sole source if you don’t let anyone else bid. “
True but there are regulatons that require a minimum number of bids.
The Air Force could go thru all the work to award this to Boeing and then Northrop could protest forcing yet another do over.
Liberty gives us prosperity not this kabuki dance.
He's known as the Congressman from Boeing...Norm Dicks, who's from a district outside Seattle.
The GAO overturned the prior award because they found the AF hadn't followed their own criteria in the award. Those criteria, BTW, had been amended after NG threatened to pull out of the process.
So, this is nothing new.
Bad news for the country, because sole-bid contracts are not as likely to turn out as cost-effective as when two companies are fighting each other for a contract.
One thing is certain now, these planes will cost a lot more than they would have, and will likely be delivered much later than they would have been.
And some democrats are going to get some nice campaign contributions when this is all done.
WASHINGTON, D.C. - March 8, 2010 - The following is a statement from Wes Bush, Chief Executive Officer and President of Northrop Grumman Corporation (NYSE:NOC), concerning the U.S. Air Force aerial refueling tanker program.
"After a comprehensive analysis of the final RFP, Northrop Grumman has determined that it will not submit a bid to the Department of Defense for the KC-X program. We reached this conclusion based on the structure of the source selection methodology defined in the RFP, which clearly favors Boeing's smaller refueling tanker and does not provide adequate value recognition of the added capability of a larger tanker, precluding us from any competitive opportunity.
"Northrop Grumman fully respects the Department's responsibility to determine the military requirements for the new tanker. In the previous competition, Northrop Grumman was selected by the Air Force as offering the most capable tanker for the warfighter at the best value for the taxpayer. However, the Northrop Grumman and EADS team is very disappointed that the revised source selection methodology now dramatically favors Boeing's smaller refueling tanker. We agree that the fundamental military requirements for the new tanker have not changed since the last competition, but the Department's new evaluation methodology now clearly favors the smaller tanker.
"We continue to believe that Northrop Grumman's tanker represents the best value for the military and taxpayer a belief supported by the selection of the A330 tanker design over the Boeing design in the last five consecutive tanker competitions around the globe. Regrettably, this means that the U.S. Air Force will be operating a less capable tanker than many of our Allies in this vital mission area.
"Our prior selection by the Air Force, our firm belief that we provide the best value offering, and the hard work and commitment of the many individuals and communities on our team over many years made this a difficult decision for our company. But we have a fiduciary responsibility to our shareholders to prudently invest our corporate resources, as do our more than 200 tanker team suppliers across the United States. Investing further resources to submit a bid would not be acting responsibly.
"We have decided that Northrop Grumman will not protest. While we feel we have substantial grounds to support a GAO or court ruling to overturn this revised source selection process, America's service men and women have been forced to wait too long for new tankers. We feel a deep responsibility to their safety and to their ability to fulfill the missions our nation calls upon them to perform. Taking actions that would further delay the introduction of this urgent capability would also not be acting responsibly.
"We recognize that our decision likely creates a sole-source outcome for Boeing. We call on the Department to keep in mind the economic conclusions of the prior round of bidding as it takes actions to protect the taxpayer when defining the sole-source procurement contract. In the previous round, the Air Force, through a rigorous assessment of our proposal, determined that it would pay a unit flyaway cost of approximately $184 million per tanker for the first 68 tankers, including the non-recurring development costs. With the Department's decision to procure a much smaller, less capable design, the taxpayer should certainly expect the bill to be much less."
Northrop Grumman Corporation is a leading global security company whose 120,000 employees provide innovative systems, products, and solutions in aerospace, electronics, information systems, shipbuilding and technical services to government and commercial customers worldwide.
Thanks for posting.
It's now a $50 billion contract.
An A330 Multi-Role Tanker Transport simultaneously refuels two F/A-18 fighters via its all-digital hose-and-drogue refueling pods on each wing
Boeing clearly had the better bid, from the start, all along.
Boeing clearly had more political capital... This was all politics which makes me wonder why we even had this unnecessary proposal process.