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Northrop Grumman won't bid against Boeing for tanker contract
Seattle Times ^ | March 8, 2010 | Dominic Gates

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 ...


TOPICS: Business/Economy; Foreign Affairs; Front Page News; Government
KEYWORDS: aerospace; boeing; defensespending; northrop; northropgrumman; tanker; tankers; usaf
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1 posted on 03/08/2010 11:28:46 AM PST by jazusamo
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To: jazusamo

Good news for those of us in the Boeing system.


2 posted on 03/08/2010 11:29:49 AM PST by TommyDale (Independent - I already left the GOP because they were too liberal)
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To: jazusamo

If they weren’t teamed with eurotrash for this I would be upset. As it is this is a win.


3 posted on 03/08/2010 11:30:18 AM PST by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: TommyDale

China will be entering the passenger jet market soon; will they have a tanker?


4 posted on 03/08/2010 11:30:50 AM PST by Loud Mime (Liberalism is a Socialist Disease)
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To: jazusamo

The govt will probably have to rewrite the RFP as they cannot have a sole source for a $40 billion contract.


5 posted on 03/08/2010 11:31:04 AM PST by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: jazusamo

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.


6 posted on 03/08/2010 11:31:23 AM PST by RightOnline
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To: TommyDale

Bad news for the Free market and especially for those of us who wanted to see it built in Union Free Alabama


7 posted on 03/08/2010 11:32:42 AM PST by Old Retired Army Guy (tHE)
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To: Old Retired Army Guy

I hear you on the union thing but Boeing has started their non union push, it’ll be interesting to see what happens.


8 posted on 03/08/2010 11:36:20 AM PST by jazusamo (But there really is no free lunch, except in the world of political rhetoric,.: Thomas Sowell)
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To: jazusamo

I wonder if the bid would have served Grumman for growth or to sustain.


9 posted on 03/08/2010 11:36:20 AM PST by Gene Eric (Your Hope has been redistributed. Here's your Change.)
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To: Old Retired Army Guy

I wonder how much union pressure there was to go Boeing instead of Northrop Grumman. I despise unions and everything they do.


10 posted on 03/08/2010 11:37:24 AM PST by pctech
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To: RightOnline

Thanks, I’ve heard others say they were great planes. They’re definitely a proven aircraft for the years they’ve been flying.


11 posted on 03/08/2010 11:42:27 AM PST by jazusamo (But there really is no free lunch, except in the world of political rhetoric,.: Thomas Sowell)
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To: pctech

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.


12 posted on 03/08/2010 11:45:28 AM PST by Old Retired Army Guy (tHE)
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To: TommyDale

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.


13 posted on 03/08/2010 11:46:04 AM PST by jazusamo (But there really is no free lunch, except in the world of political rhetoric,.: Thomas Sowell)
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To: pctech

Union pressure? YA THINK?


14 posted on 03/08/2010 11:49:03 AM PST by tgusa (Gun control: deep breath, sight alignment, squeeze the trigger ....)
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To: Old Retired Army Guy

The aircraft the N/G bid used was not ideally suited to the job, it was TOO BIG!


15 posted on 03/08/2010 11:49:49 AM PST by Don W (I only keep certain folks' numbers in my 'phone so I know NOT to answer when they call)
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To: jazusamo
Northrop Grumman has decided not to bid in the Air Force refueling tanker contract...

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.

16 posted on 03/08/2010 11:49:53 AM PST by Mr. Jeeves ( "The right to offend is far more important than any right not to be offended." - Rowan Atkinson)
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To: RightOnline
The new tanker should be a Boeing; they’re the best, hands down.

Maybe back in the days of the B707. Now, they are like any other company that does not have to compete. I have 6,000 hours flying Boeings, and I don't ever want to fly one again.
17 posted on 03/08/2010 11:49:58 AM PST by Tzfat
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To: jazusamo

So why doesn’t Boeing agree to build it in Mobile?
Win-win!


18 posted on 03/08/2010 11:51:50 AM PST by Timeout (Brits have the royals. Russia, the Nomenklatura. WE have our Privileged "Public Servant" class.)
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To: Old Retired Army Guy

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!


19 posted on 03/08/2010 11:52:06 AM PST by BamaDi (I'm praying for a bloodbath in '10)
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To: Timeout

It would be but the non union Boeing plant is in SC and will be for a second 787 assembly line.


20 posted on 03/08/2010 11:55:35 AM PST by jazusamo (But there really is no free lunch, except in the world of political rhetoric,.: Thomas Sowell)
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To: Don W

I read that the Airbus based tanker would have required expansion of facilities and heavier-built runways. Is this true ?


21 posted on 03/08/2010 11:55:40 AM PST by Eric in the Ozarks (Impeachment !)
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To: BamaDi

This won’t end well and unfortunately our warfighters will come out with the short end of the stick. JMO


22 posted on 03/08/2010 11:55:51 AM PST by tgusa (Gun control: deep breath, sight alignment, squeeze the trigger ....)
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To: Timeout

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?


23 posted on 03/08/2010 11:56:32 AM PST by Old Retired Army Guy (tHE)
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To: Old Retired Army Guy

Agree. Non-union Alabama would have been a great place to build. (Oh, and by the way ORAG, so am I)


24 posted on 03/08/2010 11:59:31 AM PST by pappyone (New to Freep, still working a tag line.)
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To: jazusamo
Good comments so far.

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."

Union pressure?
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.

25 posted on 03/08/2010 12:00:49 PM PST by norton
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To: Eric in the Ozarks

You mean like the old SAC B-52 bases?


26 posted on 03/08/2010 12:02:23 PM PST by pfflier
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To: BamaDi
The reason why a new tanker isn't already flying is due to a corrupt female government manager, pushed too far and too fast by affirmative action and an equally corrupt airframe builder who should still be debarred.

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.

27 posted on 03/08/2010 12:06:26 PM PST by Redleg Duke
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To: norton

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.


28 posted on 03/08/2010 12:09:40 PM PST by jazusamo (But there really is no free lunch, except in the world of political rhetoric,.: Thomas Sowell)
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To: pfflier

Beats me. I don’t know where refueling calls home except I saw KC 135s and KC 10s at the airport in Honolulu.


29 posted on 03/08/2010 12:11:31 PM PST by Eric in the Ozarks (Impeachment !)
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To: pctech
I wonder how much union pressure there was to go Boeing instead of Northrop Grumman. I despise unions and everything they do.

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.

30 posted on 03/08/2010 12:13:23 PM PST by Retired COB (Still mad about Campaign Finance Reform)
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To: Old Retired Army Guy
Bad news for the Free market and especially for those of us who wanted to see it built in Union Free Alabama

It's not carved in granite that Boeing has to remain in WA State to build aircraft. A major portion of the new 787 Dreamliner is being built in Charleston, SC(non-union) and they will eventually make that a location for the final assy. of the 787. Let's hope that the Company makes the right moves and begins to pull away from the socialist IAM and other unions and move to states like Alabama to manufacture all their aicraft.
31 posted on 03/08/2010 12:23:17 PM PST by az.b1bbomberfxr
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To: jazusamo

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.


32 posted on 03/08/2010 12:25:20 PM PST by Cheap_Hessian (I am the Grim FReeper.)
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To: Eric in the Ozarks

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.


33 posted on 03/08/2010 12:37:25 PM PST by pfflier
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To: driftdiver
The govt will probably have to rewrite the RFP as they cannot have a sole source for a $40 billion contract.

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.

34 posted on 03/08/2010 12:44:57 PM PST by El Gato ("The second amendment is the reset button of the US constitution"-Doug McKay)
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To: jazusamo
Though everything isn’t built here from my understanding, there’s a great deal more of the plane built here

IIRC, "here" would be Wichita Kansas.

35 posted on 03/08/2010 12:49:23 PM PST by El Gato ("The second amendment is the reset button of the US constitution"-Doug McKay)
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To: jazusamo

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.


36 posted on 03/08/2010 12:53:44 PM PST by TommyDale (Independent - I already left the GOP because they were too liberal)
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To: jazusamo

Speaking of non-union Boeing, the 787 Dreamliner is going to be built in Charleston, SC.


37 posted on 03/08/2010 12:54:46 PM PST by TommyDale (Independent - I already left the GOP because they were too liberal)
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To: El Gato

” 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.


38 posted on 03/08/2010 1:02:51 PM PST by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: TommyDale

Liberty gives us prosperity not this kabuki dance.


39 posted on 03/08/2010 1:05:43 PM PST by Cheap_Hessian (I am the Grim FReeper.)
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To: Retired COB
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...

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.

40 posted on 03/08/2010 1:21:41 PM PST by gogeo ("Every one has a right to be an idiot. He abuses the privilege!" Groucho Marx)
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To: jazusamo
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.

There is, however the NG/EADS proposal is mostly American when it comes to where the sensitive and expensive parts are produced, i.e. engines, tanker equipment etc.. What's European about the aircraft is mostly aluminium / CFRP panels.

Also, this most likely means that Airbus will not move the A330/340 line to the US for freighter production once the A350 takes over the passenger segment. So macroeconomically it's probably a wash. A decision in Boeing's favor will keep union jobs at Boeing but will also keep Airbus jobs that could have moved to America in Europe.
41 posted on 03/08/2010 1:30:40 PM PST by wolf78 (Inflation is a form of taxation, too. Cranky Libertarian - equal opportunity offender.)
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To: TommyDale

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.


42 posted on 03/08/2010 1:41:14 PM PST by CharlesWayneCT
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To: jazusamo
Statement from Northrop Grumman 

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.

43 posted on 03/08/2010 1:44:52 PM PST by Mr.Unique (Global Emergency!)
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To: Mr.Unique

Thanks for posting.


44 posted on 03/08/2010 1:54:41 PM PST by jazusamo (But there really is no free lunch, except in the world of political rhetoric,.: Thomas Sowell)
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To: driftdiver
The govt will probably have to rewrite the RFP as they cannot have a sole source for a $40 billion contract.

It's now a $50 billion contract.

45 posted on 03/08/2010 2:08:26 PM PST by Oztrich Boy (great thing about being a cynic: you can enjoy being proved wrong.)
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To: jazusamo; Mr.Unique
Statement from EADS North America

ARLINGTON, VA, Mar 08, 2010 (MARKETWIRE via COMTEX) -- Today EADS North America released the following statement from Ralph D. Crosby, Jr., Chairman of the Board.

"Five years ago EADS partnered with Northrop Grumman, as prime, to pursue the U.S. Air Force KC-135 modernization program. Two years ago our team was selected and awarded the contract. Today Northrop Grumman has decided not to submit a bid to the Department of Defense for the KC-X program.

"As a team, our serious concerns were expressed to the Department of Defense and the U.S. Air Force that the acquisition methodology outlined in the request for proposal (RFP) would heavily weigh the competition in favor of the smaller, less capable Boeing tanker. Northrop Grumman's analysis of the RFP reaffirmed those concerns and prompted the decision not to bid.

"The source selection methodology clearly signals a preference for a smaller aircraft. This is particularly disappointing given that the Air Force previously selected the A330-based KC-45 because of its added capability, lower risk and best value for both the warfighter and U.S. taxpayer. The Defense Department's RFP ignores the added combat capability that could be provided to our military and, for the first time, ensures that our allies will operate with superior capability in this vital mission area.

"The A330 multi-role tanker transport is the most capable, low risk tanker in the world today -- having been flown, tested and proven. The A330 MRTT has been selected over the Boeing tanker in the last five consecutive competitions and will shortly enter service with several U.S. allies.

"This decision does not diminish our commitment to the U.S., or to its service men and women. The enduring strength of our commitment is reflected in the success of the Army's Light Utility Helicopter -- of which we are prime contractor and that just celebrated its 100th on-schedule delivery. And it also can be seen in the many EADS systems and capabilities that operate with the U.S. Army, Navy, Air Force and Coast Guard.

"EADS is the largest international customer for U.S. aerospace and defense products, contributing over $11 billion dollars annually to the American economy and supporting more than 200,000 high technology jobs. We remain committed to our U.S. customers, suppliers and the American workforce.

"We express our appreciation to the states and communities in which we do business, and particularly to their elected officials who have been unwavering in their determination to provide the best available capability to the American warfighter.

"We also must acknowledge the support from the leadership of France, Germany, the United Kingdom and Spain in promoting transatlantic defense cooperation as a two-way street and the interoperability that the KC-45 would offer."
46 posted on 03/08/2010 2:13:18 PM PST by wolf78 (Inflation is a form of taxation, too. Cranky Libertarian - equal opportunity offender.)
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To: wolf78

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

47 posted on 03/08/2010 2:54:05 PM PST by Mr.Unique (Global Emergency!)
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To: jazusamo
Kansas 4th District Congressman Todd Tiahrt deserves great credit for his work, on this Air Force Tanker deal.

Boeing clearly had the better bid, from the start, all along.

48 posted on 03/08/2010 3:19:53 PM PST by Kansas58
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To: Kansas58
"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.

49 posted on 03/08/2010 3:34:37 PM PST by Cheap_Hessian (I am the Grim FReeper.)
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To: Kansas58
I am curious, please tell me why you think Boeing's bid was clearly better? Here is the comparison:

http://militarytimes.com/static/projects/pages/080222af_tanker.pdf

50 posted on 03/08/2010 4:02:40 PM PST by Cheap_Hessian (I am the Grim FReeper.)
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