KC-46A USAF Aerial Tanker: From KC-X RFPs to Decision and Execution

DID’s FOCUS articles cover major weapons acquisition programs – and no program is more important to the USAF than its aerial tanker fleet renewal. In January 2007, the big question was whether there would be a competition for the USA’s KC-X proposal, covering 175 production aircraft and 4 test platforms. The total cost for this first phase alone will exceed $25 billion, but America’s aerial tanker fleet demands new planes to replace its KC-135s, whose most recent new delivery was in 1965. Otherwise, unpredictable age or fatigue issues, like the ones that grounded its F-15A-D fighters in 2008, could ground its aerial tankers – and with them, a substantial slice of the USA’s total airpower.

KC-Y and KC-Z contracts may follow in subsequent decades, in order to replace all 530 (195 active; ANG 251; Reserve 84) active tankers, as well as the USAF’s 59 heavy KC-10 tankers that were delivered from 1979-1987. Then again, fiscal and demographic realities may mean that the 179 plane KC-X buy is “it” for the USAF. Either way, the stakes were huge for all concerned.

In the end, it was Team Boeing’s KC-767 NexGen/ KC-46A (767 derivative) vs. EADS North America’s KC-45A (Airbus KC-30/A330-200 derivative), both within the Pentagon and in the halls of Congress. The financial and employment stakes guaranteed a huge political fight no matter which side won. A fight that ended up sinking, and restarting, the entire program, after Airbus won in February 2008. Three years later, Boeing won the recompete. Now, it has to deliver.

• KC-X: The Program
  • The KC-X Competitions
  • The KC-46A Development Phase
  • The KC-46A Production Phase
• Boeing’s KC-46A, and Its Team [updated]
• KC-X RFP: Contracts & Key Developments [updated]
• Appendix A: KC-X RFP v2.0 – The New Structure
• Appendix B: The Contenders and The Cargo Factor – KC-30B, KC-767… KC-777?
• Appendix C: Airbus KC-30/ KC-45A Team
• Additional Readings

KC-X: The Program

A March 2012 GAO report summed up the risk driving the KC-46A program, and the current state of the USAF’s tanker fleets:

“According to the Air Force, the national security strategy cannot be executed without aerial refueling…. the KC-135 Stratotanker, is over 50 years old on average and costing increasingly more to maintain and support. With… more than 16,000 flight hours on each aircraft, the KC-135s will approach over 80 years of age when the fleet is retired as projected in the 2040 time frame. In 1981, the Air Force began supplementing its fleet of KC-135s with [59] KC-10s… that transport air cargo and provide refueling. Much larger than the KC-135, the KC-10 provides both boom and hose and drogue refueling capabilities[Footnote 4] on the same flight and can conduct transoceanic missions. The KC-10s now average about 27 years of age with more than 26,000 flight hours on each, and their service life is expected to end around 2045.”

The KC-X Competitions

“US Debating Aerial Tanker Types, Mix” offers in-depth coverage of the lead-up to the KC-X RFP, explaining many of the military & policy issues in play as the USA contemplates its own choices. Then came the contractor decisions, and responses. What would Boeing propose? The KC-767, the KC-777, or both? Would Northrop and EADS elect to play, bringing their Airbus KC-30/A330 MRTT?

In the end, Round 1 was Team Boeing’s KC-767 Advanced (767-200 derivative) vs. Team Northrop Grumman’s victorious KC-30B (Airbus A330-200 derivative). Each aircraft system has its strengths, and each system also had risk factors as lobbying continued right down to the wire. Boeing claimed lower KC-767 operating costs, and received a union endorsement. EADS promised to open production of A330F civilian jets in the USA if it won.

The Airbus A330 MRTT was picked as the “KC-45A”, but an explosive GAO decision brought the competition to a halt.

USAF articles took pains to emphasize that: ”...the department has gone through a rigorous review process for KC-X and has validated that the RFP accurately reflects the requirements as laid out by the warfighter… The RFP includes specific factors for assessing the capability contribution of each offeror” along a set of 9 weighted performance parameters.

That did not stop the contract protests, of course, and subsequent revelations that the USAF had not even followed its own guidelines destroyed the decision.

The clock ran out on the Bush administration’s tenure, and Secretary of Defense Gates decided to give his new employers in the Obama administration an opportunity to chart their own course on this issue. The KC-X v1.0 competition was canceled. A v2.0 RFP was released in February 2010, but the decision took until February 2011.

Boeing’s 767-based “KC-46A” won that competition, and the way they did it was simple: they underbid on a fixed-price contract by several hundred million dollars below cost. In exchange, they avoided a dent in their prestige, kept their 767 production line open, opened the door to more KC-767 exports, ensured a lucrative stream of future “KC-46A” maintenance revenue, and prevented Airbus from gaining a major industrial foothold in the USA.

The KC-46A Development Phase

The Pentagon’s latest Selected Acquisition Report estimates a total KC-46A development costs of $5.3 billion, which would actually be $1.2 billion over the KC-X EMD phase’s original target cost of $4.1 billion. Fortunately for the USAF, they structured the contract so they cannot pay more than $4.5 billion, and the overall bid cost to the US government for development plus production remains below Airbus’ bid.

Here’s how it works:

• Up to $4.9 billion, the contract split for amounts over $3.9 billion is 60/40 – so the government pays $600 million more ($4.5 billion), and Boeing pays $400 million.
• Costs above $4.9 billion are all Boeing’s responsibility.

The current estimate spread shows that there’s almost no chance of coming in under $4.9 billion. Boeing’s current cost estimate is $5.1 billion, which would raise its private liability for the cost increases to $600 million (400 + all 200 over $4.9 billion). If the government program manager is right, Boeing’s liability rises to $800 million (400 + all 400 overage). The Pentagon doesn’t have to care which EMD Phase figure is correct, or how much higher EMD costs go, since their costs are now known: $4.5 billion.

If, and only if, the USAF doesn’t start asking for design changes. If it does, that would trigger a cycle of charges over and above the agreed contract.

Initial schedule planning for KC-X looks like this:

Air Mobility Command (AMC/CC) has not yet determined an Initial Operational Capability (IOC) date, while Full Operational Capability (FOC) is expected approximately 24 months after IOC. The Air Force schedule as of December 2011 plans to reach Milestone C in Q4 FY15.

The KC-46A Production Phase

The current program calls for Boeing to begin delivering KC-46As to the USAF by 2015. Unfortunately, the KC-46A is too different from previous KC-767A models sold to Japan and Italy, so it will need its own development, testing, and certification time. That’s why Airbus and program skeptics have always doubted that Boeing could deliver 18 certified, fully developed and tested planes by 2017. Boeing disputes this, but the Pentagon’s own DOT&E office addded weight to those concerns in its 2011 reports, which declared the KC-46A’s test program “not executable.”

Beyond basic integration and certification considerations, a March 2012 GAO report cites 6 key technical risks to the program.

1. Weight limits. The KC-46A is close to its limit, and any more growth will start to take away fuel capacity, while increasing fuel burn rate.
2. New wing refueling pods. The KC-46’s pods will be redesigned to reduce buffeting of the aircraft’s wing, and changes to the way the refueling hose exits the pod.
3. 3-D display for the boom operator.
4. Threat Correlation Software. Used to help plot safe routes with the
5. ESTAR software.
6. ALR-69 Radar Warning Receiver integration. Issues like figuring out precise placement, and antenna design, make fitting a large aircraft more challenging than many people expect.

Problems with these or other systems could delay the program, and some of these issues could also make certification harder or longer. Fortunately, plotting even a 3-year production delay against planned deliveries and KC-135 retirements never drops the medium tanker fleet much below present levels. The initial drop is slight, and the same final figure is reached in 2030 instead of 2027. On the other hand, RAND’s 2006 Analysis of Alternatives for KC-X highlighted a very different risk, which needs to be understood:

“The current (December 2005) assessment of the flight-hour life of the KC-135 fleet and the expected future flying-hour programs together imply that these aircraft can operate into the 16 2040s. It cannot be said with high confidence that this is not the case, although there are risks associated with a fleet whose age is in the 80- to 90-year range. It can also not be said with high confidence that the current fleet can indeed operate into the 2040s without major cost increases or operational shortfalls, up to and including grounding of large parts of the fleet for substantial lengths of time, due to currently unknown technical problems that may arise. The nation does not currently have sufficient knowledge about the state of the KC-135 fleet to project its technical condition over the next several decades with high confidence.”

In English, nobody knows if an airplane fleet that is already 50 years old is going to remain safe, or avoid unforseen mechanical or structural problems, because there’s no real historical example of what they’re trying to do. Those kinds of sudden “age-out” problems recently grounded the USAF’s F-15A-D fleet for several months, and led to the unexpected need to retire almost 1/4 of the fleet. If anything similar happens to the KC-135, the USAF’s planned number of aerial tankers may not resemble its actual future fleet.

This is exactly why the KC-X program has been the USAF’s #1 priority. On the other hand, it’s an equally good reason not to trust the USAF’s own rosy projections for its future fleet size. The graph below shows how this kind of scenario could play out. In DID’s hypothetical example, fleet problems lead to the forced retirement of 1/3 of the remaining fleet, followed by a second mechanical issue or budget crisis that grounds another 55 planes. The USA’s looming fiscal entitlements crisis will begin to bite in earnest post-2020, and the pattern of cuts in the USA and in other countries shows a marked tendency to simply retire platforms with significant maintenance costs. KC-135 per-hour flight costs are already increasing, and a fleet that also needed expensive refits or fixes would be a prime target for future cuts.

Finally, DID believes that there will be no KC-X and KC-Y, so timing isn’t as important. Any serious problems in the KC-135 fleet could create a similar end-point, even if they happened after 2030.

Boeing’s KC-46A, and Its Team

There are still a number of things we don’t know about Boeing’s KC-46A, though more details have emerged since Boeing won the competition. Its base airframe is a 767-2C freighter. Winglets at the end of its wings, similar to Boeing’s 737-700 and beyond, are meant to optimize high-altitude cruising. Boeing’s refueling boom is derived from the KC-10’s AARB, but adds 3-D viewing and a slightly higher fuel offload rate of 1,200 gallons/min.

Pratt & Whitney’s 62,000 pound thrust PW4062s remain their engine choice, but the centerline and wing-mounted refueling pods will now come from Cobham plc’s Sargent Fletcher, who was also partnered with Airbus for this feature. Unlike the A330 MRTT’s systems, however, the KC-46A’s wing refueling pods still need to finish testing. The USAF will buy 46 wing sets for its fleet, which will allow multi-aircraft (multipoint) aerial refueling when installed.

Cargo capacity lists as 65,000 pounds, in a mix of up to 18 cargo pallets, 114 passengers, and/or 58 medical stretcher slots.

Fielding a tanker built after the 1960s allows the USAF to include a number of new systems, which would be too costly to retrofit into the existing KC-135 fleet. The net effect is to make its KC-46As front-line refuelers. The cockpit and exterior lighting are night-vision compatible for covert rendezvous. Advanced communications and secure datalinks are big steps forward for the fleet, and their classified feeds will be used by specialized ESTAR and TCS systems designed to route the tanker away from threats. NBC protection will allow the planes to operate in contaminated environments, while EMP hardening reduces the effects of high-frequency radiation bursts on all those new solid-state electronics. On a more prosaic level, radar warning systems, infrared defensive systems, cockpit armor, and fuel tank ballistic protection will all be welcome.

Boeing’s industrial team has slowly announced itself over many months since the award. American KC-46A content has been touted as high as 85%, with British firms picking up much of the balance. Boeing reportedly looked hard for supply chain savings in Round 2, though, in order to lose less money with its under-cost bidding strategy:

That KC-46A design is a big change from KC-X round 1, whose KC-767 Advanced used a 767-200ER fuselage; a 767-300F freighter wing, landing gear, cargo door and floor; and a 767-400ER’s flaps and flight deck (derived in turn from the 777). A new design fly-by-wire boom with remote viewing would expand the tanker’s effective refueling airspace, and offload more fuel. Engines would be 2 Pratt & Whitney PW4062s, with 62,000 pounds of thrust each, instead of the KC-767A/J’s 60,200 pound CF6-80C2s.

Some of the suppliers also changed, as Boeing progressed from the canceled KC-767 lease deal, to KC-X, to its final design in Round 2:

Boeing’s production line had also progressed. Near the end of the KC-X bidding, Boeing added civilian 767 orders to keep its production line going. That was enough to create a cushion if KC-X faced further challenges and issues, but the reality is that civilian 767 production looks set to end soon. The US military will become the 767 production line’s sole support in the very near future.

Once the KC-46As enter service, they will join Italy’s KC-767A (4) and Japan’s KC-767J (4) small KC-767 fleets. Both customers have experienced long delivery delays while Boeing has worked to iron out technical problems, and their KC-767s will have a number of key differences from the KC-46A. Japan’s boom-equipped KC-767s were delivered form 2008-2010, but Italy’s aircraft with hose-and-drogue systems were only accepted in February 2011, after long delays.

The American order may make further 767 tanker exports difficult for Boeing in the near term, because of the amount of attention and production commitment KC-46A requires. Boeing declined to bid on India’s aerial tanker RFP, for instance and hasn’t yet formally committed to Singapore’s. There’s also a customer commitment issue. Should they accept the KC-767A, which is certified and in service, or ask customers to wait for the KC-46A, and hope it’s on time?

Airbus sees this as an opportunity to add to its A330 MRTT customer list, of course. Ironically, the other big beneficiary may by Israel’s IAI Bedek, whose KC-767 MMTT conversion of used Boeing freighters already has a customer in Colombia, and may pick up more buyers due to its ready availability and low price.

KC-X: Contracts & Key Developments

March 27/12: Engine contract. Boeing formally signs a contract with Pratt & Whitney’s Military Engines division for up to 368 PW4062 engines (179 planes + 10 spares). It’s a private sub-contract, however, and the parties won’t discuss its value. Suffice to say that the cost of modern jet engines makes this a 10-figure contract, once all engines are ordered.

The 62,000 pound thrust PW4062 is the highest thrust model in Pratt & Whitney’s PW4000-94” commercial engine family, which powers MD-11, early-model 747, and 767 aircraft. It’s offered for commercial freighter and military tanker applications. Pratt & Whitney.

March 26/12: GAO Report. The US GAO audit office releases report #GAO-12-366, “KC-46 Tanker Aircraft: Acquisition Plans Have Good Features but Contain Schedule Risk.” It cites “broad agreement that KC-46 schedule risk is a concern,” and especially cites overlap among development and production work. The USAF disagrees, citing FAA certification the First Flight of the baseline 767-2C in June 2014, and promising 60% of FAA certification and military developmental flight testing before Milestone C production approval in August 2015. On the other hand, the GAO has usually been right about these risks, and the USAF has been wrong – most recently in the F-35 program.

Key information has been fed into other parts of this article, but this excerpt deserves especial attention:

“According to program officials, a change in system requirements, although unlikely… could increase the Air Force’s exposure to additional costs…. the biggest risk to the KC-46 program is the Department’s ability to minimize changes to the contract…. DOD has demonstrated limited ability to maintain stable requirements and limit changes to program technical baselines on previous complex weapon system programs, and that minimizing such change is essential to the success of the KC-46…. any engineering or contract changes affecting system requirements or having the potential to impact program cost, schedule, and performance baselines must be approved by the Air Force Service Acquisition Executive in consultation with the Secretary and the Chief of Staff of the Air Force…. Program officials maintain that… pricing will likely stay intact as long as the contract is not opened to negotiate modifications. [...]

Boeing has to correct any deficiencies in the KC-46 discovered during the development program…. on the four development test aircraft and all production aircraft…. at no additional cost to the government. In addition, there is a special contract provision that requires each aircraft to demonstrate a certain fuel usage rate before the government accepts the aircraft. If any aircraft burn fuel above this rate, Boeing is required to propose a corrective action at no cost…. if Boeing cannot meet the required usage rates, there are contract provisions allowing for a decrease in the amount paid to Boeing.”

March 07/12: Air Mobility Command chief General Raymond Johns at a House Armed Services Committee hearing:

“We continue to execute the program to cost and schedule baselines we established, along with Boeing.”

A Preliminary Design Review is scheduled later this month. Bloomberg.

March 07/12: basing plans. From the USAF’s FY13 Force Structure Changes [PDF]:

The Air Force is currently developing requirements for the first two KC-46 bases, and expects to approve basing criteria in Spring 2012, identify candidate installations in Summer 2012, select preferred and reasonable alternatives by the end of calendar year 2012, and make final decisions in 2013.”

The Air Force expects aircraft deliveries to these first 2 bases in FY16. The next round of basing decisions is planned for FY14 at the earliest.

Feb 13/12: RDT&E budget. The Air Force asks for $1.8 billion in RTDE funds for fiscal year 2013 as part of the President Budget. This would be the peak of planned research and development spending on the program over 2011-2017, at 27% of the total. Air Force budget justification [large PDF].

Air Mobility Command (AMC/CC) has not yet determined an Initial Operational Capability (IOC) date, while Full Operational Capability (FOC) is expected approximately 24 months after IOC. The Air Force schedule as of December 2011 plans to reach Milestone C in Q4 FY15. These plans have been incorporated into the program briefing, above. See next entry below on the various risk assessments made about that schedule.

Jan 17/12: DOT&E doubters. When Airbus lost the contract, they placed 2 markers. One was that Boeing couldn’t deliver to their claimed price, and that has proven true (vid. Nov 27/11 entry), though their bid remains lower than Airbus. The other was that Boeing wouldn’t be able to make the delivery schedule, and the US Defense Department’s Director of Operational Test and Evaluation’s FY 2011 Report adds weight to that belief. The report backs their position up with hard numbers, and bluntly concludes that “the KC-46 test program is not executable.”

To support that claim, DOT&E notes that military testing with past large aircraft averages under 30 flight hours per plane, per month. The Boeing/USAF TEMP schedule plans 42 FHPM, for flights that are “more specialized, higher risk, and more resource-intensive than FAA certification.” Worse, their planned 15% re-fly rate for military test items is even farther off; the 737-derivative P-8A, which is considered to be a successful program, has a current re-fly rate of 45%. Correcting to past averages adds 4 months to the 17-month testing schedule. DOT&E believes that even then, the 750 operational flight test hours aren’t enough, and 1,250 would be more realistic. That takes the testing schedule from 21 to 25 months.

Other serious omissions cited include no time for correction of discrepancies and/or deficiencies discovered during developmental testing, and no provision for the refueling boom control algorithm changes and/or procedural modifications that have been required for other new aerial refuelers. The report doesn’t say so, but the net takeaway is that Boeing is very likely to be late with its promised 2017 delivery. The USAF responded to Gannett’s Air Force Times with partial disagreement:

“The Air Force respects the opinions of the Office of the Director, Operational Test & Evaluation, but does not agree with its assessment that the KC-46 test program is ‘not executable’.... The Air Force does acknowledge that Boeing’s overall KC-46 program schedule is considered medium risk, in part due to its aggressive flight-test schedule.”

Jan 4/12: Wichita lineman, farewell. Boeing confirmed it’s going to close its Wichita, KS plant by the end of 2013. Wichita is currently the base for the company’s Global Transport & Executive Systems business, and its B-52 and 767 International Tanker programs. The facility also provides support for flight mission planning and integrated logistics.

Some of the 2,160+ Wichita jobs will be moved; others will be cut, beginning in Q3 2012. The move rankles hard in Kansas, as Boeing touted the jobs and state economic benefits if they won the tanker contract, and secured hard lobbying from state and federal representatives. Who now feel somewhat betrayed. The company counters that it isn’t entirely betraying those promises, as it spent more than $3.2 billion with approximately 475 Kansas suppliers in 2011, making it the 4th largest state in Boeing’s supplier network. That prominence is not expected to change, and the 24 Kansas KC-46A suppliers will still be providing elements of the aircraft as originally planned.

Once the Wichita plant closes, engineering work on the KC-46A will be placed at the Boeing facility in Oklahoma City, OK, instead. Work to convert 767s to KC-46 tankers will now be performed right on the 767 production line in Puget Sound, WA, copying a model first used with the 737-derived P-8A Poseidon sea control aircraft. Future aircraft maintenance, modification and support work will be placed at the Boeing facility in San Antonio, TX, which currently handles KC-135 and KC-10 maintenance and upgrade work. Boeing | NY Times | Congressman Mike Pompeo [R-KS-4, not happy].

Nov 27/11: EMD Overage rises again? Maybe. Media reports tout a figure of $500 million over maximum cost, but a breakdown says otherwise. The Pentagon’s latest Selected Acquisition Report reportedly gives a program manager’s estimate of $5.3 billion, which would actually be $1.2 billion over the KC-X EMD phase’s original target cost. Up to $4.9 billion, however, the government pays $600 million more, and Boeing pays $400 million. Costs above that are all Boeing’s responsibility. Boeing’s current estimate is $5.1 billion, which would raise its liability to $600 million (400 + all 200 overage). If the government program manager is right, Boeing’s liability rises to $800 million (400 + all 400 overage), while its overall bid cost to the US government for development plus production remains below Airbus’.

The SAR report in question appears to be an advance copy, as there has been no public release yet. It allegedly says that KC-46A engineering, manufacturing and development are “progressing well with no significant technical issues.” Given the figures above, that must be a relief to Boeing’s management. As for the Pentagon, it doesn’t have to care which EMD Phase figure is correct, since their costs are now known: $4.5 billion ($3.9 billion + $600 million). Above $4.9 billion total split costs, they aren’t paying for anything, and the estimate spread shows that there’s almost no chance of coming in under $4.9 billion. Bloomberg News.

Sept 13/11: AmSafe Industries, Inc. announces that it will supply 9g-rated barrier nets, and stationary and movable smoke barriers, specifically designed for the USA’s new KC-46A 767 aerial tankers. AmSafe is a global leader in this sort of technology; they’re also known as the makers of Tarian cloth armor that can stop enemy rockets.

Deliveries of the KC-46A internal barrier systems are expected to begin in 2015, and could be worth more than $45 million for all 179 planned aircraft.

Sept 13/11: BAE Systems’ Attendant Control Panel (ACP) for Boeing’s new civilian 737 interior will be migrating to the KC-46A. The touch-screen, networkable panel is designed to control a variety of interior functions such as lighting, drinking water, and waste tanks. Prices were not revealed. Work on the KC-46A tanker touch-screen cabin control systems will be conducted in Johnson City, NY, and Fort Wayne, IN. BAE Systems.

September 2011: Vol. 16, #4 [PDF] of Rockwell Collins’ internal Horizons magazine, whose “Refueling Innovation” article discusses their development of the KC-46A’s flight controls and refueling systems.

The stereoscopic Remote Vision System, which will display the refueling operation on both standard and 3-D screens, apparently drew on internal experience that included the Mars Rover, UAVs, and a remotely-operated bomb-disposal robot. Overall, the article cites ruggedization of components, and information fusion from the wide array of sensors and datalinks, as the 2 key engineering challenges. TSAS, which emerged from the latter challenge, is even being tested on Android OS smartphones and tablet computers.

Aug 24/11: The U.S. Air Force completes an interim baseline review (IBR) for the KC-46A.

IBRs provide mutual understanding of risks inherent in contractors’ performance plans and management systems, and outline what resources are needed to achieve program goals. This IBR had to be complete within 7 months of contract award, which would be Sept 24/11. The next major milestone is the Critical Design Review, which is scheduled to happen by September 2013. Aviation Week.

July 14/11: Sen. John McCain [R-AZ], the ranking Republican on the Senate Armed Services Committee, sends a letter to the Pentagon that calls Boeing’s KC-X EMD bid “completely unacceptable”. His issue is that any increases between KC-X’s EMD target cost (revealed as $3.9 billion), and the $4.9 billion ceiling cost are split between Boeing (40%) and the USAF (60%). The net result is that Boeing’s lowball bid costs taxpayers an extra $600 million beyond their bid, and Boeing itself $700 million. Even that reported bid price still leaves Boeing lower than Airbus’ overall price, however, which was $2 billion higher for the combined EMD phase and subsequent production of 13 initial jets.

On the other hand, the practice of lowballing bids in order to secure contracts, then raising the real costs afterward, is correctly seen as toxic. The result is grave difficulty in budget planning, as other programs are sacrificed or compromised in order to pay for widespread overcharges.

In fairness to Boeing, it’s worth going back to the original contract bids. Reports right after the February 2011 award had EADS Airbus bidding $3.5 billion for the EMD phase, while Boeing had bid $4.4 billion for the EMD phase alone. That means the USAF knew of about $500 million beyond its target costs from the outset, for an aircraft that had not been fielded or tested yet, and involved more development work than EADS’ offering. That means added risk of future increases, but the swiftness of these cost revisions strongly suggests that they were known beforehand. Actual costs for Boeing’s EMD phase are currently $5.2 billion, and the amount of the cost breach tends to lower confidence in Boeing’s ability to meet the contract schedule, a point that was also raised by Airbus after the award.

The question is whether Sen. McCain’s opposition will have any effect at this point in time. That may seem unlikely, but then, it also seemed unlikely when he opposed the original KC-767 lease deal post-9/11. McCain release | Bloomberg.

June 24/11: Bloomberg reports that Boeing’s KC-X bid is going to be $300 million over the KC-X cost ceiling, which it reveals as $4.9 billion. Because it’s a fixed-price contract, Boeing is solely responsible for those extra costs.

According to Bloomberg, a USAF statement from Lt. Col. Jack Miller said that the USAF was told after the contract award that: “it proposed a ceiling price that is less than its actual projected cost to execute the contract…. There is no legal barrier that prohibits pursuing a below-cost proposal strategy and Boeing’s met all rules.”

Recall that the Feb 24/11 contract award said only that Boeing’s Engineering & Manufacturing Development (EMD) phase contract was “over $3.5 billion.” Subsequent reports had Boeing’s EMD phase bid at $4.4 billion, vs. EADS Airbus’ $3.5 billion. On the other hand, the total bids for EMD + 4 planes, and another 14 planes of initial production, was reportedly $20.6 billion for Boeing, vs. $22.6 billion for Airbus – who called Boeing’s bid an “extreme lowball.” If Bloomberg’s report is true, we now have an idea what Boeing was willing to pay, in order to prevent Airbus from setting up a production line in America, and to keep the 767 alive as a military export and commercial option.

June 22/11: After months of refusing to divulge details, Boeing announces major suppliers for its KC-46A team, and confirms the tanker’s fuel capacity at 212,000 pounds, with an offload rate of 1,200 gallons per minute. The KC-46 Tanker team will include more than 800 suppliers in more than 40 states and support approximately 50,000 total U.S. jobs. Major suppliers have been added to the article’s industrial teams section.

June 19/11: Raytheon announces orders from Boeing supply digital radar warning receivers, and digital anti-jam GPS receivers, for the KC-46 tanker. Its AN/ALR-69A is an all-digital radar warning receiver designed to work with both fighters and large aircraft, and its technical architecture will speed up signal identification amidst cluttered environments.

The digital anti-jam GPS receiver, with its multielement controlled reception pattern antenna integrates both reception and high performance digital anti-jam capabilities into a single product.

June 7/11: Flight International reveals more about the KC-46A, while outlining what we still don’t know, 3 months after one of the largest contracts in USAF history.

For starters, it’s based on a cargo variant. At over 188,000 kg/ 414,470 pounds, the 767-2C’s maximum takeoff weight is about 20,000 pounds heavier than the 767-200ER, making it even heavier than the stretched 767-300ER that Boeing rejected for Round 1. The 2C is slightly stretched itself, at 6.5 feet longer than the 200ER, with a cargo floor and door. Beyond this, the winglets, 787-based cockpit large display system, auxiliary fuel tanks and provisions for tanker systems, and more powerful Pratt & Whitney 4062 turbofans are all known changes from the 200ER.

To find out if Boeing has made any other changes from the basic 767-200ER, outsiders will reportedly have to wait until Boeing completes a USAF system requirements review, and an integrated baseline review.

May 6/11: Marshall Aerospace announces that they had been picked in 2010 to supply the KC-46A’s integrated Body Fuel Tanks, and that Boeing’s win has resulted in an initial contract for the design, certification and manufacture of an initial batch of development tanks. They expect production orders for “more than 650” tanks to follow over a 15 year period, in order to equip the KC-X program’s 179 aircraft, with a total value exceeding GBP 100 million.

Marshall Aerospace has previous experience producing integrated Body Fuel Tanks for Boeing, including the 747, 777, and the 737-derivative P-8A Poseidon programs. Boeing has refused to discuss its Round 2 partners, but Marshall appears to have elbowed Round 1 partner Sargent Fletcher aside for this role.

March 11/11: Aviation Week outlines what we still don’t know about the KC-46A. We still don’t know the actual development phase price. We still don’t know the plane’s configuration, either, which makes it impossible to evaluate the likelihood that Boeing can deliver on time. Excerpts:

“Neither the U.S. Air Force nor Boeing have stated what exactly “over $3.5 billion” means for the KC-46A development contract…. [Boeing tanker VP Jean] Chamberlain acknowledged on the company’s Feb. 24 telecon post-win that this is “concurrent development” meaning flight test and developmental activities are taking place as the first aircraft are being built….Thanks to the three-time restructured F-35 development program, the term “concurrent development” has become a bit of a dirty word among some in Pentagon circles…. There are a few things we do know: Somehow Boeing is putting a digital 787 cockpit into an analog 767 aircraft and there is a modified KC-10 boom to meet the gallon-per-minute offload requirement. But, we don’t know what the design entails in terms of risk reduction on the platform or on the mission systems. Finally, we don’t even know officially that work has begun on this contract. Neither USAF nor Boeing will confirm.”

March 4/11: No protest. EADS North America chairman Ralph Crosby expresses disappointment at the press conference, but says that EADS could not have undercut that “extremely lowball bid,” submitted to keep Airbus from securing a US production site. The company “will not take any action that could further delay the already overdue replacement of the Air Force’s aging tanker fleet…. Much is promised by our competitor, whom we congratulate. However, should they fail to deliver, we stand ready to step in with a proven and operating tanker.”

More precise figures come from the US AFA’s report of the conference:

”...Crosby revealed – based on an hour-long debrief from the Air Force last week – that the price difference between the companies’ bids was 10 percent. Boeing bid $20.6 billion and EADS $22.6 billion on initial development and initial production of their respective KC-46A and KC-45 tankers…. He expressed doubt that Boeing will be able to deliver all 18 aircraft by 2017 as called for… because Boeing will not have its first flight-test-worthy KC-46A ready until 2015. [Crosby] also revealed that EADS’ estimated cost for engineering and manufacturing development on the KC-45 – which the company would have modestly revised from the existing design – was $3.5 billion, while Boeing bid $4.4 billion for EMD on its design, which has not flown.”

The fixed price contract means that if Boeing fails to deliver, most of the financial risk is theirs. That leaves the USAF with the operational risk, if they can’t hold Boeing to its performance commitments. Read: EADS North America | Reuters | US Air Force Association | Warner Robins Patriot.

March 3/11: Flight International:

“Newspaper Les Echos published a small article four days after the contract award noting that the USAF’s decision on tankers will make it “very difficult” for Paris to purchase the General Atomics MQ-9 Reaper unmanned air vehicle, which is competing against the EADS Talarion and a Dassault/Thales/Indra consortium offering the Israel Aerospace Industries Heron TP.”

See “Apres Harfang: France’s Next High-End UAV” for full coverage.

Feb 28/11 – March 1/11: Debriefing session with EADS North America. Meanwhile, the government and Northrop Grumman/EADS still have not reached a legal agreement on the canceled KC-45 contract. Aviation Week.

Feb 24/11: Boeing wins Round 2. The “KC-46A” win surprises many aerospace analysts, who expected an EADS win based on leaks that EADS had scored better in the USAF’s models, and expectations they could price their planes lower. The Pentagons says that both candidate aircraft met all required criteria, but Boeing’s adjusted price was over 1% less than Airbus’. That meant the USAF did not consider various “non-mandatory” bonus criteria, which could only have made a difference of up to 1%.

Note that these are adjusted prices. Rep. Norm Dicks [D-WA], for example, claims credit for successful pressure to change the USAF’s costing model from 25 years of expected fuel costs to 40 years, which he boasts cost Airbus “billions of dollars” in the respective calculations.

As a result, Boeing in Seattle, WA receives a fixed price incentive firm contract valued at “over $3.5 billion” for the KC-X Engineering and Manufacturing Development phase, which will deliver 18 of their KC-46A aircraft by 2017. The ASC/WKK at Wright Patterson AFB, OH, will manage this contract (FA8625-11-C600). A newly opened assembly line in Everett, WA will build the tankers, including all the military modifications to the airframe, right alongside commercial 767 airliners, rather than shipping 767s elsewhere for military modifications. This approach was pioneered by the 737-based P-8A Poseidon sea control aircraft program, and will now be extended to the KC-46A.

By comparison, the Feb 29/08 award to EADS & Northrop Grumman (FA8625-08-C-6451) would have involved 4 test KC-45 aircraft for $1.5 billion, plus 5 production options for up to 64 aircraft at up to $10.6 billion. Over 18 aircraft, that leads to a “base plus averaged” total of $3.819 billion. US DoD | Boeing release | Boeing feature w. video | EADS North America || Agence France Presse | Bloomberg | Chicago Mag | CNBC | DoD Buzz | Defense News | Flight International | Seattle Post Intelligencer.

Feb 14/11: The Pentagon releases its FY 2012 budget request, which includes $877.1 million in development funding for the KC-X program. The FY 2011 request for $863.9 million is still in play as well, however, thanks to the 111th Congress’ failure to pass a FY 2011 budget.

The 112th session of Congress is dealing with the FY 2011 budget as H.R. 1, and could explicitly delete KC-X funding if its disagreements with the USAF run deep enough. The other option would be more passive, and involves continuing all FY 2011 spending at FY 2010 levels. A “2010 Redux” option would be a problem for KC-X, because that would give the program just $14.9 million to work with. On the other hand, a passive approach by Congress would allow to USAF to “reprogram” some funds from elsewhere into KC-X, whereas an explicit rejection would not.

Feb 10/11: Boeing and Airbus delivery their final KC-X bids. Airbus | Boeing | Flight International.

Feb 8/11: Turbulence ahead for EADS. The Frankfurter Allgemeine Zeitung reports that Daimler plans to sell its stake in EADS when a consortium agreement expires in June 2012, in order to focus on its car manufacturing business. If they do, the move will have large ripple effects, which is why the news has provoked meetings at the highest levels of Germany’s government.

Daimler already dropped its stake in EADS from 22.5% to 15%, in a 2007 deal brokered by the government with a German bank consortium. Germany has since tried but failed to find a long-term German investor to take over the banks’ 7.5% stake, in order to keep the long term German-French shareholder balance at 22.5% each. The banks agreed to extend the current arrangement to 2013, and France’s Lagardere media group is looking to sell its own 7.5% sake at some point after 2012, but Daimler’s planned departure revives that issue of shareholder balance as a near-crisis. A German replacement firm with deep enough pockets, technical expertise, and enough of an interest in aerospace may not exist. Deutsche Welle.

Jan 31/11: WTO on Boeing. The World Trade Organization releases preliminary information its decision re: Boeing subsidies (DS 353), the other end of the trade dispute that has already seen a ruling concerning Airbus. The release took place to the 2 companies. A full public report will not be available for a couple of weeks – which matters, because accounts differ.

Boeing implies that the WTO rejected most claims, leaving only $2.6 billion in subsidies. They contrast this with the June 2010 decision that found $20.4 million in illegal Airbus subsidies: $15 billion in launch aid, $2.2 billion in equity infusions, $1.7 billion in infrastructure, and roughly $1.5 billion in R&D support, with $4 billion in illegal launch subsidies that must be restructured.

Airbus, in contrast, points to $5 billion of illegal subsidies to Boeing in this decision, with additional figures to be determined in later stages of this dispute, plus over $2 billion in illegal state and local subsidies that Boeing will receive in the future, and an expected WTO ruling that Washington State and the City of Everett must stop subsidising Boeing. Airbus adds that they believe the WTO will find that Boeing subsidies were more distorting than Airbus’ loans, and float a $45 billion damages figure. Time will tell, but this sentence in Airbus’ statement is certainly clear:

“Taking the cases together, the WTO will be seen to now have specifically green-lighted the continued use of loans in Europe and commanded Boeing to end its illegal R&D cash support from NASA, DoD and the US taxpayers.”

Look for this case to continue, though the emergence of competitors in Russia and China could lead to negotiations, in hopes of setting global standards around subsidies. WTO DS 353 | Airbus | Boeing | Boeing WTO mini-site | Flight International | NY Times | Seattle Post-Intelligencer. See also Sept 15/10 entry.

Jan 27/11: The Italian Air Force’s accepts the 1st of 4 delayed Boeing KC-767A tankers at Pratica di Mare AB near Rome. This KC-767 is registered as MM 62229, and will now enter a series of evaluations and other activities before being placed into operational use. Flight International.

Jan 19/11: During in-flight testing between an EADS MRTT tanker plane destined for Australia’s RAAF, and a Portuguese air force F-16 fighter, the refueling boom loses 1 of its 2 stabilising fins, making the device uncontrollable. The incident resulted in the detachment and partial loss of the refuelling boom from the MRTT, which fell into the sea.

Airbus is investigating the mishap, but the timing could hardly be worse. Australian DoD | Flight International | Reuters.

Dec 13/10: Britain’s 1st A330 MRTT performs the type’s 1st fuselage-mounted hose-and-drogue aerial refueling dry contacts, using an F/A-18 Hornet fighter. Airbus Military. The 1st wet refueling took place on Jan 21/11, transferring over 6 tonnes of fuel at an altitude of around 15,000 feet, and at speeds from 250 – 325kt. AirTanker.

Cobham’s belly-mounted 805E FRU (Fuselage Refueling Unit) is part of the proposed USAF KC-45’s 4-point refueling system, which shares the 2 removable digital underwing hose-and-drogue refueling pods with FSTA aircraft, but also adds a fly-by-wire ARBS boom for UARRSI dorsal receptacles. Both the belly-mounted FRU and underwing hose-and-drogue refueling pods share the same modular architecture, and all 4 systems are controlled from the Remote Aerial Refueling Operator (RARO) console in the cockpit.

Dec 1/10: USAF Lt. Gen. Mark Shackelford, the military deputy from the Office of the Assistant Secretary of the Air Force for Acquisition says that the final KC-X award will take until 2011, instead of being announced in November 2010. The USAF release adds:

“Air Force officials have said the KC-X source selection process will continue despite a mistake in November, where a limited amount of identical source selection information was provided to both KC-X offerors concerning their competitor’s offering…. The information concerned was limited to a single page of non-proprietary data on a CD that did not include any offeror-proposed prices…. Air Force officials have analyzed the information that was actually accessed by one of the offerors and have taken steps to ensure that both competitors have equal access to this information.”

Nov 21/10: Breach. A USAF error sends the wrong documents back to EADS and Boeing, giving them material from the other firm’s bid, The data sent by computer disk reportedly included pricing information, and both sides did the right thing and contacted the USAF immediately. Defense News | The Telegraph.

Oct 19/10: Iris Independent Research releases their KC-X competition white paper, “9 Secrets of the Tanker War.” One entirely unsurprising conclusion: KC-X’s 179 planes are it, and there will be no similar-sized KC-Y or KC-Z buys for at least 2 decades, if ever.

Given demographic and fiscal realities in the USA, that strikes us as a very safe prediction. Iris release | Full paper [PDF] | DoD Buzz.

Oct 6/10: The US GAO dismisses US Aerospace’s KC-X protest, leaving just Boeing and EADS. The core of the decision revolves around whether the bid was late, hence ineligible. The ruling that it was late offers an effective primer on bid delivery planning:

“In partially dismissing USAI’s protest, we concluded that, while many of USAI’s complaints were potentially relevant to the protester’s proposition that its messenger was understandably confused as to the location for submitting USAI’s proposal, such complaints did not support USAI’s allegations of intentional agency misconduct…. it was USAI’s decision – not that of the Air Force – to have its messenger arrive at Wright-Patterson AFB entry gate 19B with less than an hour remaining before proposals were due; it was USAI’s decision not to seek advance agency approval for its messenger to be admitted to the AFB; and it was USAI’s decision not to confirm in advance the precise location of, and directions to, the building at which proposals were to be received. Based on our review of the protest allegations and the record submitted, we concluded that USAI’s allegations of intentional agency misconduct were insufficient to warrant further consideration…”

See: GAO statement | GAO B-403464 decision | Washington Post.

Oct 6/10: Airbus Military obtains A330 MRTT military certification from Spain’s Instituto Nacional de Tecnologia Aerospacial (INTA), which follows the European Aviation Safety Agency’s (EASA) civil Supplemental Type Certificate (STC) awarded earlier in 2010. The first 2 A330 MRTTs conducted more than 280 flights as part of the certification process, in addition to another 170 by A310 demonstrator aircraft.

As one can see by the number of flights involved, certification is an under-appreciated roadblock in the military delivery process. Fortunately certification in one jurisdiction makes subsequent certifications either much easier or unnecessary, depending on a jurisdiction’s standards and decisions. The INTA certification clears the way for Airbus Military to deliver Australia’s KC-30As, later in 2010, but the USAF would insist on its own certification process. Airbus Military | Agence France Presse | Australian Aviation | The Australian | Le Figaro [in French] | Seattle Post-Intelligencer.

Sept 15/10: Early reports leak out that the WTO is about to find that Boeing’s aircraft have also been the recipients of illegal subsidies. Since Boeing had been pushing the subsidy point hard in Congressional debates, a finding of that sort would be significant. It will certainly make for a more difficult argument on Boeing’s part, both because the political argument becomes less clear, and because the USAF’s decision to exclude WTO issues from the competition becomes more defensible. Boeing remains on the offensive, arguing that:

“If today’s reports are accurate that some $3 billion of the EU’s claims were upheld by the WTO… the ruling… confirms that European launch aid to Airbus stands as the single largest and most flagrant illegal subsidy in the aerospace industry. Nothing in today’s public reports on the European case against the U.S. even begins to compare to the $20 billion in illegal subsidies that the WTO found last June that Airbus/EADS has received (comprised of $15 billion in launch aid, $2.2 billion in equity infusions, $1.7 billion in infrastructure, and roughly $1.5 billion in targeted research support). Nor are there seemingly any violations requiring remedy approaching the scale of remedy required of Airbus/EADS…. Neither do the public reports suggest that Boeing’s traditional market based approach to financing new aircraft development will need to change; a distinct contrast….”

WTO cases DS 353 (vs. Boeing) and DS 316 (vs. Airbus) | Boeing | EADS North America | European Union | Agence France Presse | The Australian | Bloomberg | India’s Economic Times | Reuters | London Telegraph | UPI.

Sept 14/10: A pair of Australian KC-30A tankers hook up and transfer fuel at 1,200 gallons per minute through the A330’s boom. That figure meets the USAF’s maximum requirement, something Boeing has yet to do in the air. EADS North America Chairman Ralph D. Crosby, Jr. also went on the offensive with regard to fuel economy:

“In any likely Air Force operational scenario, Boeing’s concept tanker will cost 15% to 44% more, measured on the basis of fuel burned per gallon of fuel delivered.”

See: EADS KC-45 Now | Seattle Post-Intelligencer.

Aug 4/10: US Aerospace/ Antonov is disqualified for late submission. Aviation Week quotes Pentagon press secretary Geoff Morrell:

“The proposal was late and by law we are not allowed to consider it. We are considering two proposals and U.S. Aerospace is not one of those being considered.”

The magazine adds that:

“According to an industry executive, the company’s messenger arrived at the Wright-Patterson AFB gate at 1:30 p.m. July 9 (30 minutes before the deadline) and was denied entry, given bad directions and told to wait by Air Force personnel. As a result, the Air Force stamped the proposal received at 2:05 p.m.”

On Aug 2/10, U.S. Aerospace filed a bid protest with the Congressional Government Accountability Office, citing “unreasonable” conduct by the USAF. The firm’s bid had reportedly revolved around an “AN-112” based on the 4-engine AN-70 turboprop transport.

July 13/10: The Hill reports that the KC-X bid cost EADS North America $75,000 in final printing costs alone.

July 9/10: Boeing delivers its KC-X v2.0 bid. Its release mentions that its design will contain cockpit displays from the 787 Dreamliner, which may not be a change from the first round.

July 9/10: Antonov?!? US Aerospace announces that it has submitted a joint KC-X bid with Antonov at $150 million per plane, following SEC notification of an agreement with Antonov and intent to bid on July 1/10. That agreement would give US Aerospace lead contractor status and final American assembly rights only under a KC-X contract, while Antonov would be the technical lead and manufacture components.

Unlike the March 19-22/10 UAC/ IL-96 hoax, this report has much more backing behind its assertion of a bid. The question is whether it makes any more sense, or would even qualify under Round 2’s mandatory criteria. Reports indicate a bid based on the modernized AN-124-100 “Ruslan” super-heavy transport, which would offer heavy airlift options that beat the C-17 hollow, but terrible operating efficiency as an aerial tanker. Reports of a custom designed “AN-112” make even less sense, given the years-long development and certification timelines. Unlike Ilyushin, Antonov doesn’t even have a base civilian airframe in the right size category. Defense News may have the answer the explains the hype:

”...a May 24 SEC report filed by U.S. Aerospace signals it is in financial trouble. A number of factors “raise substantial doubt about the company’s ability to continue as a going concern,” the firm told federal regulators.”

See: US Aerospace re: bid submission | US Aerospace re: agreement | Defense News | The DEW Line | UPI.

July 8/10: EADS North America delivers its KC-X v2.0 bid, one day before the extended deadline, and highlights key members of its Round 2 industrial team. EADS.

July 8/10: The World Trade Organization has put off a ruling on the EU’s subsidy complaint against Boeing (case DS 316) from July 16/10 until mid-September 2010. As the Wall Street Journal put it: “While the panel is likely to find that the U.S. has provided improper subsidies, it isn’t known if the WTO will be as severe on Boeing as it was on Airbus.” Meanwhile, the delay leave EADS very exposed in the political battles over the US KC-X contract. The EU is unhappy:

“The time lag between this case, and the United States’ case against support to Airbus (DS 316) has constantly increased over the six years this dispute has been running and the gap is now at nearly a year. It creates the wrong impression that Airbus has received some WTO incompatible support, whereas Boeing has not. Only when we have received both panel reports will both sides have a more complete picture of the dispute…. We now expect the Panel to issue its interim report in DS 353 without any further delay.”

EADS Airbus’ CEO Tom Enders said he was “surprised and disappointed” by “the last minute announcement of yet another delay,” and appears to question the capability of the WTO to play a meaningful role in the global trade order:

“We have said time and again that the complexity, interconnectedness and industrial significance of the Boeing and Airbus cases would strain the capabilities of the WTO. Since these cases were filed, the world has changed. In aviation, the previous duopoly marketplace is increasingly being populated by government-sponsored players, leaving Boeing and Airbus as those that, by any objective measure, benefit least from government support. The ongoing struggle of the WTO to address the world as it was in 2004 (the date the cases were filed) raises the question whether it can succeed in its basic mission to create a climate for a negotiated settlement on the basis of fair market rules in the interest of both the industry and the employees on both sides of the Atlantic.”

See: WTO cases DS 316 and DS 353 | EU release | Airbus release | Agence France Presse | India’s Business Standard | Seattle Post-Intelligencer | UK’s Telegraph.

June 30/10: Boeing hails the public release of a World Trade Organization ruling on Airbus subsidies (case DS 317), which will be a lobbying point in the current KC-X competition. Airbus has its own take, of course, and the WTO also has a case involving Boeing – but it hasn’t ruled on that one yet. A columnist in Boeing’s hometown of Everett, Washington even thinks the ruling could ultimately help both Boeing and Airbus, which have seen state-owned competitors enter the marketplace in recent years. WTO | Boeing | Airbus | Everett Herald op-ed.

June 7/10: Boeing teams with AgustaWestland in the US Presidential Helicopter competition. Finmeccanica’s subsidiary has produced several Boeing helicopters under license in England and Italy (WAH-64 Apache, CH-47 Chinooks), and now Boeing will return the compliment with the AW101. The license will give Boeing full intellectual property, data and production rights, making its version of a Presidential AW101 bid a Boeing aircraft, built by Boeing personnel, at one of its U.S. facilities. This decision is likely to create several ripples. Loren Thompson of the Lexington Institute points out that:

“Boeing’s bid could create some embarrassing moments for both itself and Lockheed Martin. Lockheed Martin spent years arguing that the AgustaWestland airframe was superior…. By the same token, Boeing is engaged in a bitter dispute with Airbus concerning European aircraft subsidies, and [the AW101 has received them]....”

See: Boeing | Finmeccanica [PDF] | AgustaWestland | DoD Buzz | Lexington Institute.

June 7/10: Finmeccanica subsidiary DRS announces a teaming agreement with Boeing for work on its KC-X “NewGen Tanker” offering. DRS will collaborate with Boeing on the console design and then manufacture the Aerial Refueling Operator Station (AROS), and will also provide the interconnect design and associated cable sets to integrate AROS into the Tanker. All this is contingent on a contract win, of course.

June 3/10: EADS says it has American partners for its KC-X bid, but won’t name them “because we don’t want to put them under pressure.” Defense News.

May 19/10: The House Armed Services Committee takes the first step toward introducing WTO subsidy rulings to the competition, as part of its recommended FY 11 defense budget (H.R.5136). The modified bill reportedly requires the Pentagon to submit an interim report, discussing the impact of government subsidies on the KC-X competition, at the instigation of Rep. Adam Smith [D-WA]. The implicit message in that name is lost on nobody. See: Congressional Quarterly | The Hill | Politico | bNet op-ed.

May 13/10: U.S. Senator Sam Brownback [R-KS] and Congressman Todd Tiahrt [R-KS] hold a bi-partisan press conference announcing the introduction of the bi-cameral Fair Defense Competition Act (H.R.5298 and S.3361). The bill attracts 39 co-sponsors in the House, and its Senate counterpart attracts 3.

These bills would require the Department of Defense (DoD) to consider World Trade Organization (WTO) decisions for military acquisitions. Specifically, they would require the Pentagon to add the cost of illegal subsidies onto the price of a competitor’s bid proposal, following a ruling by the WTO. The WTO has already ruled that Airbus’ aircraft were built using illegal subsidies. A ruling on Airbus’ complaint concerning Boeing is pending, but would not come in time to affect the KC-X competition.

The Seattle Post-Intelligencer says that Boeing lobbyists have been lining up legislators for these measures, and Boeing itself is making rather unlikely noises about not bidding over subsidy-related issues. See also: Defense News | ABC affiliate KAKE-10 | US NPR | Reuters | Seattle Post-Intelligencer.

May 12/10: Rockwell Collins announces that it is part of Boeing’s Round 2 aerial tanker team, with negotiated terms to deliver the same flight deck technology it supplies for the 787 Dreamliner, along with the KC-767’s Communication, Navigation, Surveillance/Air Traffic Management (CNS/ATM) systems, aircraft networks, and other electronics.

May 8/10: A Minneapolis Star Tribune article provides a glimpse into Boeing’s PR offensive on the ground. Part of it involves a trailer with simulators for the KC-767’s new boom, and associated fighters, for some members of the public.

April 20/10: EADS North America announces that it intends to submit a proposal for the KC-X aerial tanker RFP based on the KC-45 tanker, a version of the A330 MRTT/ KC-30B design that won the original contract. The US unit of the European aerospace giant plans to submit the proposal on July 9/10, the last day of the Pentagon’s extended deadline.

The company said it is continuing discussions with potential US partners, but apparently the European defense firm is willing to go it alone, if need be. The company reiterated its earlier promise to build a Mobile, AL manufacturing line for global A330F sales, and KC-X finishing work, if it gets the contract.

April 1/10: Boeing issues statement critical of Pentagon’s decision to extend the RFP deadline if EADS agrees to bid:

“We are deeply disappointed with EADS-Airbus efforts to further delay this vital warfighting program and tilt the U.S. procurement process in its favor. EADS-Airbus has been fully engaged in the competition for four years and was always expected to provide the vast majority of its team’s work content…We do not see a legitimate reason for EADS’s bid deadline extension request, and we believe an extension that favors any individual competitor does not further the goal of ensuring fair competition.”

March 31/10: A group of US senators sends letter to President Obama criticizing EADS Airbus division for receiving “billions of dollars in illegal subsidies.” The senators urge the president not to extend the KC-X RFP deadline:

“Finally, having relied on illegal subsidies to buy market share in the commercial aerospace market, Airbus now seems intent on further using subsidized aircraft to significantly increase its present in the U.S. defense market. This is unacceptable. We urge you to move forward on the Air Force tanker competition without delay.”

The letter was signed by US Sens. Patty Murray (D-WA), Sam Brownback (R-KS), Chris Dodd (D-CT), Debbie Stabenow (D-MI), Maria Cantwell (D-WA), Lindsey Graham (R-SC), Claire McCaskill (D-MO), and Michael Bennet (D-CO).

March 31/10: The Pentagon announces that if EADS wishes to bid, they will grant a 60-day extension instead of the 90 days requested. This would move the deadline from May 10/10 to July 9/10. Pentagon Press Secretary Geoff Morrell also said that:

“Given that this plane is long overdue, and we do not want its delivery date to slip later than it already has, we are prepared to compress our bid evaluation period to stay as close to the original award schedule as possible so as to still award the contract early this fall… [but we have no] willingness to change any of the plane’s military requirements or the way bids will be evaluated.”

Boeing and some of its supporters in Congress group of US senators criticized the decision. Boeing statement | US Senators’ letter to President Obama (Seattle PI blog) | DoD statement | Reuters

March 22/10: A Reuters report suggests that John Kirkland, the Los Angeles-based attorney who told various news media that UAC would announce a joint venture and enter the bidding for KC-X, may have been the victim of a scam.

Kirkland sent Reuters copies of letters on what appeared to be letters on “OOO UAC” letterhead, saying that high-level Russian approval of a bid was imminent, but subsequent examination showed contained several grammatical mistakes in Russian. UAC vice-president Alexander Tulyakov drove the final stake in when he told Reuters that:

“John Kirkland is not a UAC representative and we have had no communications with him…. We have had no discussions whatsoever with any party about the possibility of producing air tankers for the U.S. air force.”

March 19/10: EADS in, Russians in?!? EADS requests a 3-month extension of the May 10/10 bidding deadline, because it is re-considering a bid submission without Northrop Grumman. The firm’s main foothold in the American market is its successful UH-72A LUH helicopter program, but without an established A330F production line, EADS had previously considered its American base too shallow to handle a contract this big. The Pentagon is reportedly receptive to a bid extension, citing previous examples like BAMS UAV, VH-71 helicopter, Small Diameter Bomb (SDB) II, and LOGCAP IV, among others.

The same day, Russia’s state-owned United Aircraft Corp. reportedly drops a double-surprise. The first surprise is that the firm is supposedly set to sign a joint venture with a small American aerospace firm to market Russian-designed aircraft, including promises that the JV will be announced on March 22/10.

The second surprise is that the firm reportedly intends to bid a tanker version of its IL-96 4-engined, wide body jetliner for the KC-X competition. The IL-96 is civil certified, and can be fitted with Pratt & Whitney engines, but it faces significant disadvantages, despite a price tag that could be as low as half that of a base 767 or A330 airframe. The most prominent obstacle is that the key partner is a state-owned Russian firm. While relations are better than they were in Cold War days, the USA is a long way from trusting Russia as any sort of reliable ally – and the reverse is also true. Congressional opposition to any win would be measured on the Richter scale. Other issues include expected higher operating costs from a 4-engine jet, the low esteem in which Russian airliners are held, and the fact that under 50 IL-96s have been built so far.

Given the expected $100 million cost of a bid, the effort would appear to be quixotic at best, unless the USAF changes it mind and decides to reimburse bid costs. Aviation Week | Bloomberg | Chicago Tribune | CNN | Deutsche Welle | The Hill | McClatchy Newspapers | Politico | Pravda | Reuters | Seattle Times | Wall St. Journal | Washington Post.

March 11/10: As one might expect, political rumbles continue across the Atlantic, with veiled and not-so-veiled threats of a trade war, or retaliation in the defense field. EU release | Aviation Week Ares roundup | Defense News.

March 11/10: Aviation Week reports that EADS did not feel confident enough yet in its American footprint, to bid for the KC-X project. Its main beachhead in the USA at the moment is the $3.5 billion UH-72A Lakota Light Utility Helicopter program, which is going well but is an order of magnitude smaller than KC-X.

March 11/10: Spirit AeroSystems Holdings, Inc. announces that they’ve come to terms as part of Boeing Round 2 KC-767 NewGen Tanker Supplier Team. Upon a contract award from the United States government to Boeing, Spirit will build the Boeing tanker’s forward fuselage section in Wichita, KS.

March 8/10: Northrop Grumman has apparently bowed out of the KC-X v2.0 RFP, leaving Boeing as the only bidder. The move is not unexpected, given the requirements and the estimated $100 million cost to bid, but it will create longer-term political issues for the program. The European Union is already issuing rumbles about protectionism, and an early blast from Sen. Sessions [R-AL] may be indicative on the domestic front:

“The unjustifiable overhaul of the Request for Proposals – which went far beyond the narrow problems raised by the GAO – completely abandoned the idea of a game-changing tanker in favor of a smaller, less capable plane. Of the 14 major changes to the solicitation, 12 favored Boeing’s smaller, older aircraft. In the end, the process was skewed, and no one can fault a private company for declining to participate in a government competition engineered to guarantee its failure…. American taxpayers… could now be on the hook for the most expensive sole-source contract in history.”

Deputy Secretary of Defense William Lynn said the Pentagon was disappointed, but does not intend to change course. Boeing’s ardent backer Rep. Norm Dicks [D-WA], soon to be head of the House Appropriations’ defense sub-committee, advocates scrapping the bidding process now and negotiating a contract directly, while suggesting an increase in production from the program’s 15 KC-767s per year to 20-25 tankers per year. Northrop Grumman statement | EADS statement | Aviation Week | DoD Buzz | Miami Herald | Politico | Seattle Times | Washington Post early report | Agence France Presse early report | UK’s Daily Telegraph | Sydney Morning Herald | Seattle Post-Intelligencer reactions roundup.

March 5/10: Boeing announces its RFP v2.0 offering. The new 767 “NextGen” aircraft add a modified version of the new 787 Dreamliner’s flight deck, with its larger displays and other design improvements. Engines will still be Pratt & Whitney’s PW4062s, but the fly-by-wire refueling boom looks different, and so do the wings. Aviation Week attempted to clear up Boeing’s exact offering, but:

“Boeing officials declined to comment on whether the wings, the doors and floors and flaps were being pulled from other commercial models [DID: as in the previous KC-X entry]. They declined interview requests as well…”

The 3rd thing Boeing’s official release emphasized was a pointed reference to the flight control computers that may have been a major cause of Air France Flight 447’s A330 crash over the Atlantic in 2009, with all hands lost:

“The Boeing NewGen Tanker will be controlled by the aircrew, which has unrestricted access to the full flight envelope for threat avoidance at any time, rather than allowing computer software to limit combat maneuverability.”

See also: Boeing | Pratt & Whitney | Aviation Week | DoD Buzz.

Feb 24/10: Final KC-X v2.0 RFP is out. Most of the changes made were narrow and technical, and do not change the structure of the competition. The need for a microwave landing system was scrapped, and Large Aircraft Infrared Countermeasures missile defense systems will now be provided by the government as a separate item, certain items had specifications defined more tightly, etc. Proposals will be due within 75 days of the request, and there will be another 120 days after that for government evaluation.

Price remains the key factor, based on the draft proposal’s weighting system. The development contract is a fixed price incentive deal, with the contractor responsible for 40% of any overruns up to 125% of the contract value, and all overruns beyond that. Production lots 1-2 are fixed price. Lots 3-5 will see a new price negotiated, with the contractor responsible for only the first 2.5% of price inflation. Re-negotiation would happen again for Lots 6-13, but this time the contractor would only be responsible for the first 1% of price inflation.

While these provisions protect manufacturers from spiraling commodity costs, they also allow the USAF to make changes later, so long as they’re willing to pay for them. RFP solicitation on FedBizOpps | US DoD press release | DoD presentation [PDF] | Boeing statement | Northrop-Grumman statement | Seattle Post-Intelligencer rounds up politician reactions in USA | AvWeek reports that NGC is “96-98% unlikely” to bid | Aviation Week article collection | Gannett’s Air Force Times | Government Executive magazine | Miami Herald | Washington Post | Reuters: tanker chronology.

Feb 22/10: Flight International’s Stephen Trimble looks for clues to the funding behind a new lobby group called “Build Them Both.” As one might guess, the group favors a dual-source, accelerated buy contract for the KC-X competition, with both firms receiving contracts but annual orders being determined by production readiness, pricing, and the needs of specific theaters. This was the essence of the late Rep. John Murtha’s position.

Feb 8/10: House Appropriations Defense subcommittee chair John Murtha [D-PA], Capitol Hill’s #1 proponent of a KC-X split buy, dies of complications associated with intestinal surgery. A Washington Post blog reports that Rep. Norm Dicks [D-WA], one of EADS Airbus’ most avid foes on Capitol Hill, is likely to succeed Murtha as chair of the subcommittee, and North West Cable News asks the obvious question.

Jan 6/10: At a Pentagon press conference, Press Secretary Geoff Morrell discusses the KC-X v2.0 RFP, among other matters:

”...we are shooting to have the RFP out hopefully by the end of the month, if not early next month. We’re in the process right now of reviewing the comments that were provided…. I think we’re still on schedule to get this out in the next few weeks. ...no final decisions have been made yet about the RFP, but I think it is safe to say at this point that there will be changes to the draft….. We’ve gotten feedback, some of it quite helpful. Some of – some of this we just have realized ourselves. And so I think the team is in the process of correcting mistakes and altering the acquisition strategy a bit, and that will be reflected in the final request for proposal which will likely go out in the – in the next couple or few weeks.

I would add one thing, and that is that whatever changes are being made should not be construed as any attempt to favor anybody. It is—what is being done is we are trying to make the RFP as fair and as transparent as possible, while at the same time providing the taxpayers with the best value for their money and the warfighters the best—the best plane to support their operations…. we hope that when this happens that we will have a full and hardy and thorough competition between multiple bidders.”

Jan 4/10: Leeham News offer their 2010 Outlook for Boeing and Airbus, which includes discussion of the KC-X competition:

“We also believe there is a strategic argument, as well as a political one, that supports buying both airplanes because there are simply different mission requirements. But the Pentagon is adamant that it will not split the order…. Winning the contract is also critical to the Airbus strategy of establishing a commercial A330-200 production base in the US…. Airbus pledged to build the A330-200F [in Mobile, AL] and expectations are that the A330P will follow. But no tanker contract, no US plant. And this is why we believe Boeing and its supporters are fighting so hard to block a tanker award to Northrop. This, we believe, is more important to Boeing than winning the tanker contract, though we also acknowledge Boeing wants the contract on its own merits.

”....The [A330] MRTT is running about 18 months behind schedule for delivery to launch customer Australia. About six months was due to customer change orders, according to the RAAF and EADS. The balance rests with developmental issues.

”....Because of the need for a 787 production Surge Line (see 787 discussion below), the current 767 line will be relocated to the aft part of the bay it now occupies. A Lean production line will be implemented, reducing unit costs by about 20%. Relocation begins this year and will be completed next year…. If Northrop stays in, we still think Boeing will submit only a KC-767 proposal…. We remain concerned that Boeing has yet to deliver the KC-767 to Italy, now some four years late. We are told problems remain with the centerline hose-and-drogue system…. [and] that issues remain with the wing-mounted refueling pods, though Boeing says these have been fixed. Although Boeing intended to deliver the first of four tankers to Italy last year… that this still has not happened indicates all is not well. Since the US tanker is similar to the Italian tanker, we remain skeptical about the program…. Boeing is still not forecasting any dates concerning these remaining milestones [for Italy].”

Dec 1/09: Northrop Grumman’s President and Chief Operating Officer Wes Bush sends a letter to Department of Defense undersecretary for acquisition, technology and logistics Ashton Carter. As written, it says, the terms of the KC-X RFP imposed a structure that, in Northrop Grumman’s opinion, favors smaller planes like Boeing’s, and:

”...places contractual and financial burdens on the company that we simply cannot accept…. As a result, I must regrettably inform you that, absent a responsive set of changes in the final RFP, Northrop Grumman has determined that it cannot submit a bid to the department for the KC-X program.”

Pentagon spokesman Bryan Whitman replied that both manufacturers wanted changes that would favor them, and contends that:

“The Department has played this right down the middle…. [we] cannot and will not change the warfighting requirements for the tanker to give advantage to either competitor…. The department wants competition but cannot compel the two airplane makers to compete.”

Alabama’s Republican governor Bill Riley has a different take:

“The Obama administration has corrupted the tanker selection process with a blatantly unfair competition…. The question is why is this RFP so radically different than the one Northrop Grumman won last year?”

A final RFP is expected in January 2010, but each program has hundreds of suppliers across the USA. Refusal to submit would trigger a very large political battle in Congress, one focused on the acquisition process itself. It remains to be seen whether it is possible for a single-winner tanker process to successfully obtain American Congressional approval and funding for its choice, in the face of a transatlantic competitor whose American partners saw billions of dollars in concrete business snatched away, and a domestic heavyweight with its own deep supplier and congressional networks. Northrop Grumman’s Letter [PDF] | Agence France Presse | Bloomberg | NY Times | Politico | Reuters | Wall Street Journal | Aviation Week | Defense News.

Nov 25/09: Flight International reports that one of Australia’s KC-30Bs refueled a pair of Spanish EF-18A Hornet fighters at the same time, using its hose-and-drogue refueling system.

Nov 10/09: Aviation Week headline: “Boeing, Northrop Sour On KC-X Draft RFP.”

Nov 10/09: One of Australia’s KC-30B/ A330 MRTTs performs the 1st fuel transfers with its all-digital 905E hose and drogue system, using its left and right under-wing pods to transfer more than 9,200 lbs of fuel to a “NATO” (likely Spanish) F/A-18 fighter. The first of Australia’s 5 KC-30Bs will be delivered to Australia in mid-2010. EADS release.

Nov 2/09: The Lexington Institute’s Loren Thompson writes that the EADS/Northrop Grumman bid has become a question, rather than a certainty:

“Last week, one of the two teams competing to provide the Air Force’s future aerial-refueling tanker launched an unusual campaign to overturn the service’s strategy for buying the plane. Northrop Grumman and its European partner Airbus signaled that they don’t believe they have a plausible chance of winning under the proposed terms, and began building the foundation for a formal protest. What’s unusual about the move is that competitor Boeing hasn’t been all that happy with the revised tanker solicitation either, but Northrop has elected to pursue an aggressive strategy that is sure to anger its Air Force customer. Here’s why Northrop is willing to take that risk….”

Oct 29/09: Sen. John McCain [R-AZ] sends a letter to Defense Secretary Robert Gates, Pentagon acquisition czar Ashton Carter, and USAF Secretary Michael Donley, asking questions about the KC-X v2.0 source selection process. He asks about the use of fuel usage rates and construction needs, but not full probable lifecycle cost, in the cost calculations, asks if any of the requirements considered mandatory in Round 1 were discarded RFP v2.0, wonders if the pricing requirements in the draft RFP would ”...not favor mostly smaller airframes, and asks how the proposed pass/fail rating can “provide for an assessment of relative developmental and integration risk among the offerings.”

The final v2.0 RFP was supposed to be released around the end of November 2009, but delays out to January 2010 are reportedly a possibility. Aviation Week.

Oct 21/09: An A330 MRTT equipped with the ARBS in-flight refueling boom passes fuel to an in-flight aircraft for the first time. A Royal Australian Air Force KC-30B flew a 4:30 test flight, with more than 3,300 pounds of fuel transferred to 2 Portuguese Air Force F-16s during 13 contacts. Other systems tested included the boom’s fly-by-wire stability and 3-D vision system. EADS | Australian Defence Magazine.

Oct 2/09: Sen. Jeff Sessions [R-AL] says he will introduce an amendment to the FY 2010 Senate defense spending bill (amendment 2610 to S. 1390, currently before the Senate Armed Services Committee). When introduced, it would block the use of funds for the U.S. Air Force’s KC-X competition, unless the service agrees to disclose pricing data about Boeing’s proposal in 2008 to rival Northrop Grumman, just as Northrop Grumman’s data was disclosed to Boeing after Boeing’ asked for an explanation of its loss. Sen. Sessions release | Aviation Week | See also Sept 29/09 entry.

Oct 1/09: In a stunning upset, Northrop Grumman beats Boeing for a 10-year, $3.8 billion contract to service the global KC-10/KDC-10 tanker fleet. Boeing subsidiary McDonnell Douglas built the planes, modified them, and had serviced them since their induction in the 1980s. By all accounts and metrics, service quality was high – which is why some analysts see the loss as symptomatic of deeper problems in Boeing’s relationship with the USAF.

Sept 29/09: As legislators connected with Boeing push the USAF regarding the recent WTO ruling, Northrop Grumman puts out a statement of its own, citing issues with the process:

“Northrop Grumman continues to be greatly concerned that its pricing information from the previous tanker competition was provided by the Government to its competitor, Boeing. Access to comparable pricing information from Boeing has thus far been denied by the Pentagon. With predominant emphasis placed on price in this tanker re-competition and Northrop Grumman again proposing its KC-45 refueling tanker, such competitive pricing information takes on even greater importance. It is fundamentally unfair, and distorts any new competition, to provide such critical information to only one of the bidders. The company will continue to work with its customer to fully resolve this issue.”

The USAF had provided this data to Boeing after Boeing had lost, as part of the USAF’s requested debriefing. The Pentagon has dismissed Northrop Grumman’s claim on the basis that the disclosure to Boeing was in accordance with regulations, and that “the data in question are inaccurate, outdated and not germane” to the new bid, which is a different competition. Clearly, Northrop Grumman continues to disagree; if the impasse continues, the question may become whether the GAO disagrees during a future appeal. Northrop Grumman | Aviation Week | recent Seattle Post-Intelligencer

Sept 29/09: Alabama’s Press-Register puts out an editorial supporting a split-buy and speeded-up production, which legislators like House Appropriations Committee Chair John Murtha [D-PA] continue to support:

“With a defense contract potentially worth $40 billion at stake, expect both sides to fight over every clause and nuance they think might favor their opponent. Right now, Boeing and Northrop have 60 days to comment on the draft guidelines; this is only the first stage of the contest…. By the time the lawyering and politicking are over, at least a few years will have elapsed. So here’s one more plea for a split contract.”

Sept 25/09: The USAF releases the KC-X v2.0 draft RFP, re-starting the competition. The KC-X Round 2 RFP remains structured as a “winner take all” competition, and retains its target number of 179 aircraft, will full-rate production of 15 per year beginning by the 3rd year (Lot 3 of up to 13). Each contender will provide a fixed-price proposal to develop and deliver 4 Engineering & Manufacturing Development (EMD) planes, followed by the first 64 aircraft and necessary spares. It will also submit an upper limit on the price of the remaining 111 tankers, and 5 years of initial support.

Assuming that legal and political delays don’t get in the way, first production delivery is now planned for 2015, with Initial Operational Capability in 2017. More information on the RFP’s evaluation structure can be found in the section “KC-X RFP v2.0: The New Structure.”

Next comes the 60-day comment period, after which the formal RFP can be expected. The bidders will then have 60 days after that final RFP release to submit their bids, and the government will have 120 days to evaluate them. A decision is currently expected in mid-2010. FedBizOpps RFP #FA8625-10-R-6600 | USAF RFP release presentation | DoD briefing re: competition, incl. Slides [PDF] and Q&A session | USAF | Boeing statement | Northrop Grumman statement | Agence France Presse | Aviation Week and AVWeek Ares re: selection process | Aviation Week re: people involved | Business Week | CBS WKRG in Pensacola, FL | Government Executive | The Hill | Leeham News & Comment aviation analysts | Military.com | Nextgov | Seattle Post-Intelligencer analysis | WSJ: Boeing brings flight simulator to Capitol Hill.

Sept 25/09: The USAF’s last serving KC-135E aerial tanker touches down at Davis-Monthan AFB near tucson, AZ, after its final flight. All remaining KC-135s are now KC-135Rs. USAF release.

Sept 16/09: US Secretary of Defense Gates says that he is giving the new leaders he’d installed at the Air Force the final say in the $40 billion tanker deal. This is a reversal from the Round 1 arrangements after the GAO ruled that the USAF had not followed its own criteria, and the US Department of Defense took over direct management of the program. On the other hand, it does put the USAF on the firing line instead of the DoD, in order to absorb any initial hits in what’s sure to be an intense political fight.

Other reports add that the revised KC-X proposal is due “in a few weeks.” USAF | Boeing statement | Defense News | Government Executive magazine | Inside Defense | Agence France Presse | Business Week | NY Times | Reuters | Seattle P.I. offers analyst’s view.

Sept 15/09: Aviation Week reports that keeping the existing KC-135 fleet in the air will become increasingly expensive:

”...at AMC, planners are wrangling with how to keep the KC-135s flying until as late as 2043…. outgoing AMC chief [Arthur] Lichte points out that maintenance crews sometimes work 7 hr. for every hour of KC-135 flight. “Every year we don’t get tankers, it is costing us $55 million right off the top,” Lichte says. “When you get out to about 2018 and 2020, what started out as about $2 billion a year to maintain the KC-135 fleet goes all the way up to $6 billion…. we continue to do everything we can to make sure don’t have an Aloha Airlines where the skin peels back or a TWA 800 [type incident] where frayed wires cause an explosion in the fuel tank…. In total, aging-related costs are expected to add at least $17.8 billion to the price of maintaining the KC-135 for 40 years.”

The increase in projected maintenance costs is attributable mostly to fuselage skin and wiring checks, and corrosion issues which are already a significant contributor (30%-50%, by some reports) to depot maintenance costs. Meanwhile, access to KC-10 replacement parts is a worry, and the KC-10 boom control unit is becoming unreliable and should be replaced.

Sept 15/09: Flight International reports that KC-X Round 2 may see a supplier shakeup on the Boeing side:

“Boeing officials are determined to set “aggressive price targets” for selecting suppliers and even manufacturing locations…. Boeing’s quest for cost-savings has also reopened the 777’s engine supplier to competition…. all three certified engines – the GE90, Pratt & Whitney PW4000 and Rolls-Royce Trent 800 – will be considered if Boeing decides to offer the KC-777. However, engines that have not been certified on the 777, such as the GEnx family, have been ruled out. “We don’t think there’s enough time for a certification programme,” Lemaster says…. If Boeing decides to propose the KC-767 in the next round, the structures and control systems will come from the same aircraft type, Lemaster says.”

Sept 14/09: US Ar Force Secretary Michael Donley says the WTO’s ruling will have no effect on the USAF’s process, as Airbus’ counterclaim is still pending, and so is the EU’s expected appeal.

A day later, 47 American politicians send a letter to President Obama that says: “Buying Airbus tankers would reward European governments with Department of Defense dollars at the same time that the U.S. Trade Representative is trying to punish European governments for flouting international laws.” Mobile Press-Register | Seattle Post-Intelligencer | Reuters via Forbes | Business Week | Seattle P.I. re: letter | Seattle P.I. offers contrasting views re: finer points of WTO trade dispute.

Sept 14/09: In a briefing at the Air Force Association’s 2009 Air & Space Conference and Technology Exposition, Boeing officially acknowledges that the Boeing 767 and 777 are both potential KC-X candidates. They also launch their own web site, UnitedStatesTanker.com, to promote their “KC-7A7” tanker bid. Boeing release | Boeing briefing [PDF]

Sept 8/09: EADS chief executive Louis Gallois tells the French newspaper La Tribune that: “Our objective is to be in the [KC-X] competition. We are totally determined to be in the running, unless it appears that the request for proposal is biased.” Source.

Sept 4/09: The World Trade Organization issues an interim ruling that the $4 billion in aid Airbus received from European governments to develop the A380 super-jumbo passenger jet constituted illegal subsidies.

Technically, the WTO ruling could empower the U.S. to levy tariffs either against Airbus or other European imports, equal to the amount of the improper subsidies. Legally, the EU is expected to appeal the ruling, Airbus has complaints of its own on tap, and any firm action remains years away. Business Week | bnet.

July 9/09: Stephen Trimble of Flight International highlights a recent podcast interview with Boeing tanker spokesman Bill Barksdale, which seems to show a lot of enthusiasm and prep work at Boeing around the KC-777. Excerpt:

“BARKSDALE: The 777 as a tanker is just so much more capable than anything it’s got as a peer. And I know that sounds like a bit of bravado, but…. I’ll give you a couple of examples. If you compare them, the 777 would provide – deliver – however you want to say it – 23% more fuel than the KC-30. It could carry 44% more payload – more cargo – in the back. And it also would carry about 42% more passengers in the back as well. So those are very generic, very general kinds of numbers…. If the air force really wants to go in that direction, the Boeing company has spent a lot of time in the last year preparing for that, knowing that we have a real, true, large tanker that, like I said, is comparable in size to the KC-30. And, yet, you get so much more for your money.”

June 16/09: Northrop Grumman CEO Ronald D. Sugar, and EADS CEO Louis Gallois, issue a joint statement re-affirming their joint commitment to the KC-45 Tanker team.

June 15/09: Bloomberg reports that Boeing is preparing to submit a KC-777 for KC-X v2.0, but a DoD Buzz story clarifies. It turns out that Boeing is preparing to offer a KC-777 option if the revised requirements put a premium on cargo capability or fuel offload amounts, but the firm hasn’t made a decision and won’t until the RFP comes out. The firm had considered a KC-777 before the initial KC-X RFP as well, but the RFP’s lack of extra points for exceeding USAF specifications led Boeing to go with its smaller, cheaper, and more fully developed KC-767 instead. DoD Buzz adds:

“Still, a Boeing 777 bid raises all sorts of questions. Given the problems Boeing has had reducing the vibrations afflicting its refueling pods on the 767, and the enormous technical and engineering challenges of refitting the 777, can the company get a plane in shape in time to fill the Air Force’s first tranche of 179 planes?... But it may be that Boeing is largely conceding the first tranche of planes to Northrop and aiming for the larger follow-on buy.”

The DoD Buzz report adds rumors that Northrop Grumman may walk if the revised RFP is seen as weighted in Boeing’s favor – again, a parallel with the firm’s rumblings before the initial KC-X RFP was issued:

”...there are rumors that Northrop is weighing its commitment to the tanker program, which has cost the company financially and politically. Two sources have told me that Ron Sugar, the company’s CEO, will walk away from the competition should the new RFP appear weighted too heavily in Boeing’s favor. This could, of course, be part of the company’s gaming efforts to ensure that the Air Force does include analysis such as best value as it makes its choice. Meyers made clear, as does his colleague Janis Pamiljans in the video below, that the Air Force must include “best value” as a key component of the service’s tanker analysis.”

June 9/09: The USAF’s role in KC-X v2.0 is still up for debate. Military.com’s DoD Buzz reports that Defense Secretary Robert Gates is still deciding whether the Air Force would lead the renewed competition, or whether it would remain with the Office of Secretary of Defense. Either way, however, Gates said that former Raytheon lobbyist and current Deputy Defense Secretary Bill Lynn would take a “very close interest” in the program.

May 27/09: The Project on Government Oversight NGO explains some of the hidden variables behind decisions about who should run the program:

”...this isn’t only a debate over who will be ultimately responsible for the program, but that it will also determine how much this program will be impacted by the new Weapons Acquisition Reform Act of 2009. One of the major revisions to the Senate’s initial version of the bill in the Senate Armed Service committee’s mark-up was changing language that would require the newly established Director of Independent Cost Assessment to conduct independent cost assessments for all major defense acquisition programs (MDAPs) to only those programs where the Under Secretary for Acquisition, Technology and Logistics (AT &L) is the Milestone Decision Authority (MDA).... But as a result of this change in mark up, if DoD chooses to give the Air Force management of the tanker program, there will be no mandatory role for the new Director of Independent Cost Assessment to provide oversight and implement policies and procedures to make sure that the cost estimation process is reliable and objective. One can’t help but wonder how much DoD had the tanker program in mind when requesting this change to the legislation.”

April 6/09: US Defense Secretary Gates announces his FY 2010 budget recommendations, which will include a KC-X RFP in summer 2009.

April 6/09: The Lexington Institute raises warning flags about the new acquisition process:

“Despite Obama Administration rhetoric about openness in federal contracting, the new and improved tanker selection process has all the transparency of the FBI’s witness protection program. The performance requirements for the future tankers were blessed by the Pentagon’s Joint Requirements Oversight Council with almost no input from industry, and now the acquisition strategy is being crafted in much the same way. If you were planning to spend $100 billion over the next 30 years on a new aircraft fleet, wouldn’t you want to check with the only two qualified suppliers to determine whether your terms and specifications were reasonable? We have been here before…. Many of those problems could have been avoided if the industry teams had been kept informed on how the selection process was unfolding…. The current buildup to a re-competition is being carried out with even greater secrecy.”

At this point, with Northrop Grumman and its suppliers believing that a huge contract was taken away from them, and Boeing treating the lobbying as a life-or-death issue, the impact may be tangential. The political reality is that lack of transparency can make the process worse, but even perfect transparency won’t remove the fundamental political bottleneck.

March 17/09: NGC endorses split-buy. A Northrop Grumman release offers figures from a KC-135 Economic Service Life Study, and claims that for each KC-45 that enters service, USAF operating costs would drop by $7 million per year, assuming replacement of 2 KC-135s with each A330 MRTT inducted. It adds:

“Congressmen John Murtha (D-PA) and Neil Abercrombie (D-HI) commented recently the only way to get badly needed tankers to our warfighters quickly is through a dual procurement acquisition process…. According to Northrop Grumman analysis, a dual procurement scenario could replace the capability of the entire Air Force KC-135 fleet by the year 2022 – seven years sooner than best case single procurement strategy. Dual procurement eliminates the need to re-skin the KC-135 aircraft.

By procuring 24 aircraft per year from two contractors rather than 15 per year from a single source, as is the current Air Force budget plan, the service could save $7.2 billion in tanker Operating and Support (O&S) costs between 2012 and 2022 compared to the O&S costs associated with a single procurement strategy. Through dual procurement, the Air Force saves $10.2 billion in tanker O&S between 2012 and 2029, compared to the O&S costs associated with a single procurement strategy. [Our product is better, but].... if Congressmen Murtha and Abercrombie are correct the only way to get tankers to the warfighter quickly is through a dual procurement strategy, Northrop Grumman will support the effort.”

The crunch, of course, is that 9 more aircraft per year, at about $200 million each, adds $1.8 billion per year to actual spending. That’s another $19.8 billion from 2012-2022, or $30.6 billion from 2012-2029. The difference between those figures, and projected savings over the same time period, must come from somewhere. That means either expansion of the overall military budget, or dollars taken from other military programs. Both options are unlikely, and difficult.

March 13/09: An Inside the Air Force article entitled “Report: KC-135 Maintenance Could Reach $3 Billion Per Year by 2040” says that KC-135 maintenance costs will escalate by almost 50% over the next 30 years, and cost twice as much as new tankers. The KC-135 Economic Service Life Study claims that it will end up costing the Air Force more than FY2000$ 103 billion to operate and maintain the KC-135s between 2001-2040. Source.

March 11/09: Reports surface that the Obama administration will propose a 5-year delay to the USAF’s aerial tanker program, as Us OMB recommendations leak to the general press. The Pentagon is not bound by those recommendations, and US Secretary of Defense Gates is quoted as saying that:

“In the days to come, any information you may receive about budget or program decisions will undoubtedly be wrong because I intend to wait until the end of our review process before making any decisions.”

Assuming that the documents really do propose a 5-year delay to the KC-X program, it is not clear whether this is a classic “Washington Monument” move, proposing a cut that the weight of Congress interests are almost certain to reverse, or a genuine decision within a zero-sum set of budget decisions. In Washington, of course, it could even be both. Washington Post | Seattle Post-Intelligencer | Seattle Times | Grand Forks Herald | Bloomberg News | MSNBC | Agence France Presse.

March 11/09: Democratic Party congressmen John Murtha [D-PA] and Neil Abercrombie [D-HI] begin publicly proposing the split-buy idea that has been floated quietly in the background for several months now. Reuters | Reuters Update.

Feb 26/09: Military.com’s DoD Buzz reports that a Pentagon Joint Requirement Oversight Council met today to consider the new KC-X requirements:

“From what little I have heard about the requirements, it seems pretty clear that the Air Force has compressed and simplified the requirements to avoid the likelihood of another award protest but has not changed its mind about what capabilities are needed…. But Rep. Jack Murtha’s plan to split the buy – and avoid what would seem to be an otherwise unavoidable second protest – would seem to allow both companies some breathing room…. the Air Force’s opposition may be at an end – at least for the initial purchase.”

Murtha [D-PA] has been at the center of ethical investigations over his career, but he remains a powerful member of the Democratic Party. He chairs the House Appropriations Committee’s Defense Subcommittee.

Feb 25/09: USAF Transportation Command leader Gen. Duncan McNabb testifies to a joint hearing of the House Armed Services Committee’s Seapower and Air and land forces subcommittees. He reiterates KC-X as the USAF’s top priority, and says that further delays in replacing the KC-135 fleet would add significant risk to the U.S. military’s ability to quickly move troops and firepower rapidly to the globe’s combat zones. Reuters, via Forbes.

Jan 29/09: The US government’s Office of Management and Budget submits a list of potential defense program cuts in its guidance to the US Defense Department. One of the suggestions is reportedly a 5-year delay of the KC-X program. The Pentagon is not bound by these suggestions, but the recommendations will become news in March 2009, igniting controversy and lobbying. Source.

Sept 22/08: Sen. Richard Shelby [R-AL] fires a broadside in a Washington Times op-ed:

“Two months from Election Day, politics seem to be everywhere we turn. However, one place we should not see politics is in our Department of Defense (DoD) acquisition process. The process to select the new Air Force tanker fleet has become so politicized that DoD allowed parochial and business interests to keep the Air Force’s top acquisition priority from the pilots who need it. The long fight over the tanker contract proves that the acquisition process is fundamentally and significantly flawed…. Politics just cancelled a competitively awarded contract, solely because Boeing was not the winner. Defense acquisition policy has been stated: If it is not a Boeing plane, DoD is not going to buy it.”

Sept 18/08: A Washington Post story reports that:

“John Young, the undersecretary for acquisition, technology and logistics, said in an interview at the Pentagon yesterday that under the tanker proposal from Northrop Grumman and its partner European Aeronautic Defence & Space, developing the first 68 aircraft would have cost $12.5 billion, compared with $15.4 billion under Boeing’s plan.”

Sept 10/08: The Pentagon announces that Defense Secretary Robert M. Gates has canceled the competition for the $35 billion Air Force tanker contract:

“It has now become clear that the solicitation and award process cannot be accomplished by January. Thus, I believe that rather than hand the next administration an incomplete and possibly contested process, we should cleanly defer this procurement to the next team…. It is my judgment that in the time remaining to us, we cannot complete a competition that will be viewed as fair and competitive in this highly-charged environment…. I believe the resulting cooling-off period will allow the next administration to view objectively the military requirements and craft a new acquisition strategy for the KC-X as it sees fit.”

Sept 3/08: Gen. Lichte of USAF Air Mobility Command says that he expects a protest after the final round 2 RFP is released. He hopes it doesn’t happen. But:

“I mean this is a lot of money, I understand the business nature of this. But I don’t understand how at some point you stop and say, this company wins, and this company loses, or this company is successful and this company is not. I don’t know how we get through something like that. With the poisonous nature of all the comments that are out there right now, I don’t know how we make peace with everybody to say, okay let’s go forward.”

He also said that he does not want a split buy…

“However, if you were to tell me that was the only way to get out of [the current situation] then I’d take it…. We need a new tanker now. I don’t care which one it is. And we need to get on with this quickly.”

Military.com | Agence France Presse | AP | CBS | Reuters.

Aug 14/08: Jerry Cox is a former procurement policy counsel in the U.S. Senate, and now holds the title of managing director of The Forerunner Foundation. At, least according to the article byline in the Seattle Post-Intelligencer for “Tanker choice in mathematical terms”. The core claim of the article is as follows:

“The Air Force knows a tanker accomplishes nothing by flying from Point A to Point B, so what really matters is the ratio of delivery. How many gallons will the plane deliver for every gallon it burns? That’s a tougher problem, but it’s hardly trigonometry. Northrop showed the Air Force it can deliver almost two pounds for every pound it burns, while Boeing delivers only 1.6 pounds. That’s a 22 percent edge for Northrop, and the numbers hold up, regardless of the trip length.”

What the newspaper did not mention is that Cox also heads up a lobbying firm called Potomac Strategy Associates. DID spoke to Jerry Cox, however, and he told us that his PSA has not been employed by any firm in conjunction with the aerial tanker competition.

Aug 11/08: Aviation week reports that Boeing is strongly considering a refusal to bid as its response to the revised KC-X RFP.

That response would leave the field open to EADS/Northrop Grumman in a formal sense, but the political weight of that kind of protest move would force the Pentagon to think long and hard before signing a contract under those circumstances. Until Boeing makes a firm decision, of course, its bid team must continue working full speed ahead.

Aug 6/08: New draft. The USAF has issued a new draft of its RFP, and appears to be adopting an approach of minimum required compliance. On the surface, there are 2 major changes. Fuel costs over a plane’s 40-year lifetime will be considered, and full credit will now be given for exceeding the stated requirements in key areas like cargo capacity, fuel offload, et. al. Neither was true under the old RFP. The catch is that different levels of importance are being assigned to various types of costs, with development and production cost estimates weighted more heavily than long-term projections for maintenance and fuel costs. The second major change around exceeding performance limits simply makes the USAF’s original evaluation approach the competition’s officially announced approach, instead of a violation of the competition’s terms.

Under those terms, Boeing is likely to lose again – which may trigger a follow-on protest upon the release of the revised RFP. The planned time line for moving forward is as follows:

• Aug 6-13: DoD officials will take a week to discuss elements of the draft with Northrop-Grumman and Boeing. Expect a lot of back and forth over the terms of the RFP, including efforts by members of the (currently recessed) Congress.

• Mid-August: DoD plans to issue the final RFP amendment, with just 45 days for renewed submissions. Note that this time frame would make an airframe switch very difficult, due to the hundreds of pages of documentation, cost information, and design work required.

• Early October 2008: Renewed submissions due.

• October to late November: Discussions with the companies about their proposals.

• Early December: Final proposal revisions for “best, final” offer.

• Early January 2009: Decision made and announced. If Boeing wins, the existing contract is canceled and a new one is signed. If Airbus/NGC win again, the current stop-work order is lifted.

It’s important to note that the US DoD’s desired schedule, and what politics, appeals, et. al. actually end up dictating, may end up being 2 different things. On a political level, however, introducing the revised RFP when Congress is in recess, and not issuing a decision until after the elections, will help to lower elected representatives’ political leverage. What it will not do is provide full insulation, since the decision is certain to be an important election issue in some states. The first days in a new Congress’ term also tend to provide some political insulation for issues of this type, since members are busy with other things. Nevertheless, it can also be a double-edged sword. Exceptions do occur if the issue in question is a big enough priority for enough elected representatives. In that case, the first days of a term can also be the stage for dramatic political actions whose fallout would be considered much more carefully later in their term.

See also: KC-X RFP, revised draft | US Armed Forces Press Service | Boeing statement et. al., via CNBC | NGC statement via MarketWatch | CQ Politics | Politico re: guerilla marketing | Leeham Companies LLC | Defense News | Aviation Week | Bloomberg | Business Week | Christian Science Monitor | Agence France Presse | Money Times of India | Seattle Post-Intelligencer | Seattle Times | Mobile Press Register | Birmingham News | Pensacola News Journal.

July 9/08: Let Round 2 begin. American Secretary of Defense Robert Gates announces that the KC-X competition will be re-opened, with at least one important difference: the Air Force won’t be running it. Meanwhile, Northrop-Grumman has been ordered to stop work on its contract.

Undersecretary of defense for acquisition, technology and logistics John J. Young Jr. will be in charge of the acquisition, and will appoint an advisory committee to oversee the selection process. , and a modified request for proposal could be issued before the end of July 2008, with a decision expected by year’s end.

Boeing’s statement welcomes the news, and claims that life-cycle costs including fuel will now be considered in the competition:

“However, we remain concerned that a renewed Request for Proposals (RFP) may include changes that significantly alter the selection criteria as set forth in the original solicitation. As the Government Accountability Office reported in upholding our protest, we submitted the only proposal that fully met the mandatory criteria of the original RFP…. we will also take time to understand the updated solicitation to determine the right path forward for the company. It’s encouraging that the Defense Department intends to take steps …that, among other things, fully accounts for life-cycle costs, such as fuel…”

The new competition will be challenging for all concerned, especially since it adds an element missing from the last round: European expectations, raised by the initial win, could create larger trade and defense industry ramifications if the new competition is perceived to be biased against Airbus’ offering. Meanwhile, political involvement and pressure within the USA is guaranteed to be intense, and every item from the selection criteria onward can expect contestation. US DoD | Boeing release | Northrop Grumman release | Alabama Press-Register | Montgomery Advertiser | Seattle Times | WIRED Danger Room | CNBC | Hartford Courant | AP | Aviation Week: Lawmakers Slam US Defense Acquisition | Politicker.com | Deutsche Welle | International Herald Tribune | Reuters | China’s Xinhua.

June 18-25/08: The Congressional Government Accountability Office sustains Boeing’s protest The ruling validates a number of Boeing’s complaints, and recommends:

“The GAO recommended that the Air Force reopen discussions with the offerors, obtain revised proposals, re-evaluate the revised proposals, and make a new source selection decision, consistent with the GAO’s decision. The agency also made a number of other recommendations including that, if the Air Force believed that the solicitation, as reasonably interpreted, does not adequately state its needs, the Air Force should amend the solicitation prior to conducting further discussions with the offerors; that if Boeing’s proposal is ultimately selected for award, the Air Force should terminate the contract awarded to Northrop Grumman; and that the Air Force reimburse Boeing the costs of filing and pursuing the protest, including reasonable attorneys’ fees.”

See full DID coverage of the decision, and the road ahead, updated to include the full text decision, released on June 25/08. There are reports that the USAF may attempt to bull this one through, and someone fully committed to that side might believe this to be a realistic possibility given the full text decision. DID is not optimistic about the realism of that approach, however, and explains why not with reference to the GAO rulings.

June 25/08: Defense Tech reports that:

“John Young, the Pentagon’s acquisition czar, has reportedly drafted a letter for the four congressional committees that oversee defense spending and policy informing them of the Pentagon’s decision to go ahead and award the contract to Northrop Grumman…. “Their finding is that the full document is quite different from the summary,” issued last Wednesday, said a source familiar with the issue. The source said Air Force leaders believe much of what was challenged is “procedural” and can be resolved without rebidding the deal.”

June 23/08: Aviation Week reports that outbound U.S. Air Force Secretary Michael Wynne says the service may have to “reshape and revise” the request for proposals (RFP) for a new refueling tanker competition. One new criterion under consideration may be a flyoff of the dueling designs.

June 12/08: Aviation Week reports that Rep. Norm Dicks [D-WA], whose constituency is closely tied to Boeing, says he is working with House defense appropriations chairman John Murtha [D-PA] to introduce an amendment to an appropriations bill preventing the KC-X award to Northrop Grumman and EADS Airbus.

He pledges to do “whatever it takes,” regardless of the outcome of the GAO’s ruling later this month. Any GAO ruling would be non-biding, which is why the outcome of the tanker contract (continuation, repeal, or forced split) will eventually be decided in Congress no matter what; the GAO report’s primary value will be as an influencer in that debate.

April 21/08: Reuters reports that the USAF met last week with Boeing and Northrop Grumman’s CEOs “to voice concern about the “vitriolic” tone of public statements over a $35 billion refueling aircraft program.” Particular concern was expressed regarding Boeing’s allegations of irregularities in the USAF’s process. Defense analyst Loren Thompson, of the Virginia-based Lexington Institute went so far as to say that: “The tone of the tanker debate has turned so negative that Air Force leaders are concerned that it could damage their long-term relationship with Boeing.”

Given trends in the industry and this protest’s intrinsic requirements, the question may not be whether relationship damage is acceptable. It may be how much damage is acceptable. See “USAF to Boeing, NGC: “Don’t Make Us Come Back There” for more.

April 11/08: Boeing claims that USAF evaluators found that the KC-767 tanker had almost 5 times as many survivability discriminators as the KC-30B, with 24 positive discriminators (11 major, 13 minor) while the KC-30 scored 5 minor discriminators.

Some of Boeing’s major discriminators reportedly included more robust surface-to-air missile defense systems; Cockpit displays that improve situational awareness; Better Electro-Magnetic Pulse (EMP) hardening; Automatic route planning/ rerouting and steering cues to the flight crew to avoid threats once they are detected; Better armor-protection features for the crew and critical aircraft systems; and Better fuel-tank-explosion protection features. Boeing release.

April 10/08: Congressman Duncan Hunter [R-CA-52], ranking Republican member of the House Armed Services Committee, recommends a 3rd option:

“The most remarkable aspect of the recent competition for the next Air Force refueling tanker contract was the absence of the best aircraft: the Boeing KC-777. The CEO of FedEx, Fred Smith, had it right when he briefed Members of Congress…. one of the most compelling factors is the fuel offload of the KC-777 ER (with additional under floor body tanks) at 2,000 nautical miles… nearly three times as much as the “winning” A330. ...the KC-777-200 carries 30% more fuel and 62% more cargo than the A330. And when you compare payload, passenger and aero-medical evacuation capability, the KC-777 is the clear winner at 39% more payload, 94 more passengers and 30 more patients than the A330.

.... at $40 billion plus, the dollars associated with the “tanker buy” are huge. And the profits reaped from the sale will be available for reinvestment by the winning competitor for new generations of aircraft…. The tanker competition is subject to the authorization and appropriation of dollars. The taxpayers, should, through their elected representatives, make the KC-777 the next Air Force tanker.”

April 8/08: Dueling ads. Northrop Grumman begins to respond in detail to Boeing’s assertions re: the USAF evaluations in the “Why We Won” ongoing series:

Mission Capability | Versatility | Greater Range | Takeoff Performance (can take off with more fuel load from a 7,000 foot runway) | Fuel Offload | Air Refueling Efficiency | Past Performance | Cost and Price Comparison | Fleet Effectiveness | Development Cost | Survivability (“The Air Force had to balance survivability against other capabilities, criteria and cost…”) | Key Selection Criteria | Strengths and Weaknesses | Past Performance in Detail | Superior Air Refueling.

April 3/08: Northrop Grumman Corporation launches the website “America’s New Tanker” as a potential centerpiece of its lobbying efforts. The NGC release adds:

“Citizens across the nation have generated tens of thousands of letters to their respective congressman, senators and governors in support of the Air Force’s selection of Northrop Grumman to provide the KC-45 Tanker. The website also offers a capability that enables visitors to receive e-mail news updates about the program.”

As media efforts go, the site is currently a very bare bones affair, with a single page of content, a sign-up page for email updates, and a form letter generator to Congress. It is ahead of Being’s comparable efforts, however.

April 2/08: The USA’s Congressional Government Accountability Office denies denied requests from Northrop Grumman and the U.S. Air Force to throw out Boeing’s protest of the KC-X deal. By law, the GAO has 100 days from the day of complaint to determine if that complaint has merit.

While Northrop Grumman refers to streamlining of Boeing’s protest in its release, Boeing took a very different position. Tanker program spokesman Bill Barksdale said categorically that “We’re not reducing anything…. We’re not eliminating anything.” Defense News | Northrop Grumman release.

March 27/08: FSTA signed in Britain. Britain signs a GBP 13 billion (currently about $26 billion), 27-year public-private partnership deal with the AirTanker consortium, who will deliver 14 A330-200 MRTT aerial tankers and operate them over the life of the contract. This is the largest-ever Private Finance Initiative (PFI) contract in the defense realm, anywhere in the world.

The A330 MRTT/ KC-30 had been Britain’s platform choice since 2006, when it beat a KC-767 offer from Boeing and Serco. The British planes will rely entirely on 3 hose-and-drogue systems, however; unlike the KC-45A, or other A330 MRTT wins, they will not carry a refueling boom for use with dorsal refueling inlets. Britain’s aircraft carry refueling probes for use with the hose-and-drogue method, and eliminating the boom simplifies civilian use of FSTA aircraft when the RAF doesn’t need them.

March 24/08: B311344 Protest of the Boeing Company: Second Supplemental Protest [PDF format, Public Redacted Version]

March 13/08: Boeing launches its Tanker Facts protest blog.

March 12/08: The Lexington Institute offers “Boeing Fights Back: How it Plans to Prevail,” explaining Boeing’s strategy as they see it.

March 10/08: Boeing announces that it will file a formal protest on March 11/08, asking the Government Accountability Office (GAO) to review the KC-X decision. Boeing chairman & CEO Jim McNerney called it:

”...an extraordinary step rarely taken by our company, and one we take very seriously…. we continue to believe we submitted the most capable, lowest risk, lowest Most Probable Life Cycle Cost airplane as measured against the Air Force’s Request for Proposal. We look forward to the GAO’s review of the decision.”

Interesting choice of claims. Boeing said it would provide additional details of its case in conjunction with the protest filing. Boeing release | DID’s “Boeing on KC-X: “Methinks We Doth Protest to You” has fuller details re: the protest grounds.

March 7/08: The U.S. Air Force has completed its debrief for Boeing – amd Boeing appears to be getting ready for a formal protest/ challenge. Mark McGraw, Boeing vice president and program manager of the KC-767 tanker:

“We spent several hours with Air Force leaders, listening and probing, all in an effort to better understand the reasoning behind their decisions…. While we are grateful for the timely debriefing, we left the room with significant concerns about the process in several areas, including program requirements related to capabilities, cost and risk; evaluation of the bids and the ultimate decision. What is clear now is that reports claiming that the Airbus offering won by a wide margin could not be more inaccurate…. Our plan now is to work through the weekend to come to a decision on our course of action early next week,” said McGraw. “It will be a very rigorous and deliberative process to ensure we’re balancing the needs of the warfighter with our desire to be treated fairly. For decades Boeing has been recognized as a defense company that never takes lightly protests of our customers’ decisions.”

March 6/08: The Lexington Institute discusses the KC-X competition’s ratings, and claims that the evaluation wasn’t even close. DID explains why their claim might be believable when even Boeing hasn’t been debriefed yet, and goes on to summarize and annotate their comments while pointing back to the original source. Read: “KC-X: Rating the Contenders.”

March 6/08: The USAF originally said that Boeing wouldn’t be debriefed until around March 12th, but Boeing wasn’t happy with that. The briefing has now been moved up to an unspecified earlier date. Bloomberg news | Boeing release.

March 5/08: Northrop Grumman enters the lobbying fray to counter critics of the deal. The US industrial base, jobs, foreign content, and foreign supplier risk are all addressed. The points made echo Sen. Richard Shelby’s [R-AL] earlier points, though the firm changed the words “insource jobs” to “create jobs,” in order to avoid getting Airbus in trouble for the flip side of insourcing, which is outsourcing jobs from France. Readers should also note that the Joint Cargo Aircraft competition they refer to was a contest between 2 European aircraft: Alenia’s winning C-27J Spartan, and EADS-CASA’s C-295. NGC release | Sen. Richard Shelby statement.

March 4/08: EADS announces the first in-flight “wet contact” that transferred fuel via the EADS Air Refuelling Boom System (ARBS). The A310 test aircraft was partnered with Portuguese Air force F-16s at an altitude of 27,000 feet, locking down one of the last milestones in ARBS’ development.

The boom is 17 meters long at full extension and allows the transfer of 2270 litres/minute (1200 US gal/min). The fly-by-wire boom is controlled remotely from a console in the cockpit, where an operator uses an advanced technology 3 dimensional visual system to steer the boom, rather than using direct visual contact from the plane’s rear.

March 4/08: Taxpayers for Common Sense reports on the lobbying dollars spent to date on the KC-X RFP by both sides. DID looks at the totals, and wonders if that’s the most useful question. Perhaps a better question would be: how well was that money spent? Read “The KC-X Tanker Deal: Tracking the Lobbyists.”

March 3/08: A release from House Speaker Pelosi’s office [D-CA] says that the award to Airbus “raises serious questions that Congress must examine thoroughly… Given the ramifications of this decision for the United States, the Air Force must explain to Congress how it meets the long-term needs of our military and the American people.” The tone is not friendly, and answers to be sought during the battle on Capitol Hill include:

• “What are the national security implications of using an aircraft supplied by a foreign firm for this essential mission?”
• “Were the risks associated with choosing a conceptual design over a proven capability properly assessed?”
• “Was sufficient consideration given to the impact of the contract award on jobs in America and on our technological base?”

Both Sen. Hilary Clinton [D-NY] and Sen. Barrack Obama [D-IL, where Boeing is a major presence] have expressed opposition to the award, though neither has committed to ending the deal as part of their Presidential campaigns. Republican Presidential Candidate Sen. John McCain [R-AZ] has reserved judgment, saying:

“Having investigated the [KC-767] tanker lease scandal a few years ago, I have always insisted that the Air Force buy major weapons through fair and open competition. I will be interested to learn how the Air Force came to its contract award decision here…. I’ve never believed that defense programs, that the major reason for them should be to create jobs… I’ve always felt that the best thing to do is to create the best weapons system we can at minimum cost to taxpayers.”

Feb 29/08: After all the studies, the lobbying, and the proposal refinements, however, the USAF picked a winner. The A330 MRTT/ KC-30B from Northrop Grumman and EADS Airbus will now become the USAF’s next aerial tanker – if the USAF can make its decision stick:

Northrop Grumman Corp. of Los Angeles, CA won a cost plus incentive/award fee, fixed-price incentive, firm-fixed-price contract for the newly-named KC-45. This contract is awarded after full and open bidding, and provides for the system design and development of 4 test aircraft for $1.5 billion. This contract also includes 5 production options targeted for 64 aircraft at $10.6 billion. At this time no funds have been obligated. The Aeronautical Systems Center at Wright-Patterson Air Force Base, OH issued the contract (FA8625-08-C-6451).

Follow-on procurement of 110 production aircraft will be split into several production lots per usual procedure; the USAF has estimated their value at $35 billion over 25 years, plus additional costs for sustainment and support. The news even came as a bit of a shock to EADS’ CEO. The Financial Times of London reports that:

“As recently as Friday afternoon the EADS team had been convinced that Boeing would take the contract. Mr Gallois, about to leave Paris for a mountain holiday, said he had simply not believed his ears when informed at 10.25pm local time last night.”

Gallois is also quoted as saying “no, we didn’t smash the price,” in response to questions re: the common tactic by Airbus of slashing their margins to win sales. Aerospace analyst Steve East at Credit Suisse was less convinced, and recommended “sell into strength” on the grounds that the deal may not generate significant profits for EADS. Per this article’s Jan 14/08 entry about moving A300F production to the USA, Airbus CEO Tom Enders added that:

“All 4 System Design and Development aircraft are already in production. Preparatory work is now underway for our commitment to co-locate the final assembly of the tankers and A330 civilian freighter aircraft at Mobile, Alabama, creating the first new large commercial aircraft assembly facility in the U.S. in over 40 years.”

Gen. Arthur J. Lichte, commander of US Air Mobility Command, said that the Northrop/EADS KC-30 had been chosen because it offered “more cargo, more fuel offload, more passengers and more availability.” The USAF took pains to stress the degree of rigor in the selection process, and the importance of the contract, in hopes of forestalling a protest. Whether or not a protest is forthcoming from Boeing, however, there will almost certainly be a pitched battle on Capitol Hill. The USAF has worked to prepare for that likelihood with a $240 million Tanker Transfer Fund that could be spent during a protest.

A split-buy is the most likely proposal in the political arena, given both past tendencies in Congress and the political leanings of the states most affected, which tend to lean more toward the Democratic Party in Boeing’s case, and more toward the Republican Party in EADS/Northrop’s case. On the other hand, the USAF strenuously opposes a split buy, both for reasons of delay (estimated at 18-24 months) and of future operations and maintenance inefficiencies. As they say in the airlines: “We are expecting turbulence ahead. Please fasten your seatbelts.” USAF | EADS | Northrop Grumman | Cobham plc [PDF] | Boeing | Financial Times of London | Reuters | Infodefensa [Espanol] | Seattle Post-Intelligencer | Seattle Times | Times of Malta | Wichita Eagle (round-up of official statements, incl. politicians & unions) | Aviation Week (USAF’s fund) | AP, via Boston.com (Pratt & Whitney loses) | Seattle P-I (Gen. Mosely re: protest prospects) | Seattle P-I (inquiry possible) | USA Today (“How Boeing blew the deal…”, cites Northrop’s political lobbying) Wichita Business Journal (lawmakers will protest).

Feb 20/08: Boeing announces delivery of the first KC-767 tanker to its Japanese partner Itochu Corp., which landed at Gifu, Japan, near Nagoya following a final review by Japan Ministry of Defense (MoD) Air Staff. Itochu will deliver the KC-767 Tanker to the Japanese MoD in March 2008, following in-country acceptance processes.

Feb 13/08: Boeing announces that its KC-767J has received a Supplemental Type Certificate (STC) from the US Federal Aviation Administration (FAA). The FAA previously certified the KC-767 for everything except passengers and main deck cargo, and this additional certification clears the way for Japan to receive its first 2 of 4 KC-767s as planned. It will also help Boeing obtain FAA certification for Italy’s KC-767s, and deliver their first 2 tankers later in 2008. George Hildebrand, Boeing KC-767 Japan program manager, said that:

“The Japan Air Self-Defense Force asked us to complete passenger and main deck cargo certifications beyond what is normally performed on military aircraft, and we have received our FAA STC for those capabilities.”

Feb 12/08: Let the political lobbying begin! Defense News reports that the Pentagon is delaying the KC-X’s Defense Acquisition Board review slated for Feb 13/08, owing to “inquiries from the Hill and elsewhere” about the program. No date has been set, but Lawmakers’ lingering questions about the service’s KC-X program prompted Pentagon acquisition officials to postpone a Defense Acquisition Board review slated for Feb. 13, said James Finley, deputy undersecretary of defense for acquisition and technology, still anticipates a KC-X award by the end of February 2008. Time will tell.

Feb 7/08: Aero News Network notes that “Boeing, EADS Employ ‘Guerilla’ Marketing For KC-X”:

“Tactics employed by both parties include “sending blast e-mails to reporters and trade journals widely read by Air Force officials and by advertising in specialty publications, on buses and subways and local radio stations,” reports The Seattle Post-Intelligencer. Special publications aimed at Congressional staff and leaders in Washington, such as “The Hill,” have been on the receiving end of full page ads from both parties (as have ANN inboxes—Ed.) Radio airwaves and Metro subway stops are also not immune to the fight for the estimated $40 billion contract.”

Jan 30/08: Defense Aerospace reports that the late March 2008 delivery of 2 KC-767s to Japan represents an additional 2-month slippage, as Boeing must still complete remaining Federal Aviation Administration certifications to allow the tanker to carry passengers and cargo before Japan will accept the planes. The March 2008 delivery is about 3 years later than initially planned.

Delivery of 2 similar aircraft to Italy will now take place in the Q2 2008, about 2 years later than planned. As annoying as these delays have been to its customers, the key question for Boeing now is whether these delays have sufficed to iron out the KC-767’s technical risks in advance of the much larger American KC-X competition.

Jan 29/08: Boeing announces a successful night-time refueling mission, using the main refueling boom on a KC-767 that will be delivered to Japan early in 2008. The aircrew connected the KC-767s’s fly-by-wire, remote vision refueling boom to an F-15E Strike Eagle 11 times during dusk and night conditions, and successfully offloaded fuel before returning safely. Airbus’ KC-30 competitor has yet to perform a ‘wet’ boom refueling, even during the day.

Right now, however, Boeing’s biggest technical risk factor is its hose-and-drogue system, not its boom. Boeing release.

Jan 28/08: EADS is also conducting testing, using A330/KC-30B MRTT aircraft destined for Australia, an F/A-18 fighter, and an A310 tanker equipped with EADS’ ARBS advanced refueling boom. During testing with the F/A-18 fighter, the KC-30 Tanker’s all-digital FRL 905E-series hose-and-drogue refueling pods deployed to lengths of 75, 82, and 90 feet during multiple deployments at altitudes from 10,000 – 35,000 feet, at airspeeds ranging from 180 – 300 knots, while in level flight and while banking. The Sargent Fletcher FRL 905E reportedly “exhibited total and complete stability, which is critical for successful refueling of probe-equipped receiver aircraft.” Nevertheless, EADS’ biggest technical risk factor is its advanced refueling boom, which is required by many USAF aircraft.

Testing also took place regarding EADS’ advanced ARBS refueling boom, which was extended to various points throughout the refueling envelope as the Australian A330 MRTT moved to within 6” of the all-electric fly-by-wire boom to test its suitability for large aircraft. “In the next few days, the [KC-30/A330 MRTT’s] Civil Certification flight tests with the European Aviation Safety Agency (EASA) are scheduled to be performed.”

It should be noted that neither the hose-and-drogue test, nor the refueling boom test, involved actual contact, let alone a ‘wet contact’ refueling. Unlike its Boeing competitor, the ARBS refueling boom has yet to demonstrate contact with a large aircraft, or actually passed fuel to any aircraft. EADS release | EADS North America release.

Jan 16/08: The International Association of Machinists and Aerospace Workers (IAMAW) throws its support behind Boeing’s KC-X bid, citing the WTO case re: European government subsidies, 40%+ production in Europe, and recent scandals involving insider trading and foreign practices.

“The IAM fundamentally believes in fair competition in government contracting. But fair competition means that all vendors must play by the rules. Yet all available evidence – including a consistent bipartisan chorus from the Congress and our US Trade Representative – indicates that Northrop’s majority partner, EADS, continues to skirt the rules of fair play at the expense of US jobs.”

Whatever one may thing of the substantive merits of these objections, the IAMAW will be a factor re: support once the battle shifts to Congress. As it surely will. Aero News story.

Jan 15/08: The Lexington Institute think-tank looks at the KC-X competition once more, and explains why they believe the USAF already has a very good idea of who the winner is. They add:

“Beyond the operational merits of the two planes, a political minefield lies ahead for the Air Force and whichever contractor it selects. If the Northrop plane wins, buy-America sentiment will surge on Capitol Hill, potentially blocking a purchase. If the Boeing plane wins, legislators from the South whose region stood to benefit from tanker assembly will seek to split the buy between both teams. The Air Force will get its tanker in the end, but which contractor benefits may ultimately come down to a test of political skills, and there is no guarantee new tankers will reach the fleet before old ones begin failing.”

Jan 14/08: Readers may recall Airbus CEO Louis Gallois’ comments about setting up “in a dollar zone” (see Dec 3/07 entry). Now Airbus announces that it will establish an A330 Freighter aircraft final assembly line (FAL) in Mobile, AL if its KC-30 team wins. The A330F currently has an order book of over 66 aircraft, and production capacity would be increased to 4 aircraft per month in order to handle civilian construction as well. Aircraft sections would be delivered to Mobile from their respective Airbus production facilities elsewhere in the world, assembled into the final freighter aircraft, and delivered to customers from Mobile, AL. EADS CEO Thomas Enders was careful to make the offer conditional on a KC-X win, however, claiming that:

“The Dollar-Euro exchange rate makes it advantageous for us to expand our operations in the United States. While it would be difficult to overcome the cost of building a final assembly line in the U.S. strictly for commercial aircraft, it would make good economic sense to invest the incremental cost of expanding the facility that would already exist for assembling tanker aircraft.”

That rationale may or may not be exactly true, given that Airbus is said to lose $1 billion every time the USD-EUR exchange rate drops 10 cents, and its dollarized customer contracts must be met with Euro production costs. New commercial aircraft assembly facilities are not a common occurrence for the industry, however, and this would be the first Airbus manufacturing facility in the U.S. By proposing the A330F, Airbus takes advantage of the dollar, offers added civilian work that helps it close the American jobs gap with Boeing’s KC-767, and blunts “Buy American” moves. The A330F is a less popular model than the A330 passenger variants, however, and the move also hopes to provoke less reaction in Europe as a result. earlier version of the EADS release at Defence Aerospace.

Jan 14/08: Boeing takes the unusual step of releasing the Conklin & de Decker Aviation Information study that led to the cost savings claims in its Jan 3/08 release. Specifically, the study measures:

”...the additional fuel consumption and the resulting extra cost incurred by a fleet of 179 Airbus 330-200 when compared with the Boeing 767-200ER where both fly similar commercial mission profiles, both fly 750 hours per year over a 40 year service life and both are operated at or near their maximum take-off gross weight. Take off at or near the maximum take off gross weight reflects the fact that aircraft on a tanker mission tend to take off with as much fuel as possible to permit the greatest mission flexibility.”

Note, however, that operating cost per plane is very different from operating cost per mission; the latter must also factor in the number of planes and flights required to complete that mission (likely Airbus advantage), the flight routes and distances they must fly given basing options (likely Boeing advantage), et. al. Release | Full Report [PDF]

Jan 3/07: Boeing announces that it has submitted its final bid for the KC-X program. Its release is unusually direct and specific in its comparisons, something Boeing has shied away from in the past:

“Boeing’s tanker also will carry three times more cargo and passengers than the KC-135 without sacrificing the operational flexibility delivered by a medium-sized aircraft. In contrast, the competitor’s offering would be the second largest aircraft in the Air Force’s inventory and provide unnecessary capacity…. Burning 24 percent less fuel than its competitor, the KC-767 will save the service and American taxpayer an estimated $14.6 billion. The KC-767 also will save approximately $4 billion if selected since it costs 22 percent less to maintain than its competitor.”

Jan 3/08: Northrop Grumman announces that it has submitted its final bid for the KC-X program, in partnership with EADS Airbus. In contrast to other releases, this one is understated in terms of comparisons with the KC-767.

Dec 18/07: Northrop Grumman announces an extension of USAF Air Mobility Command’s Consolidated Air Mobility Planning System (CAMPS) contract. This software is used to plan, manage, and track AMC’s aircraft, providing an overall view of where its transports and tankers are and where their missions plans are taking them. NGC has served as CAMPS’ primary contractor for 15 years, and they are partnered with Mosaic, Inc. of Oak Hill, VA.

Together, they will continue maintaining and upgrading CAMPS software, providing on-site customer support and training, and software and hardware fielding support. The team is also charged with implementing a service-oriented, scalable and expandable architecture; network-centric data solutions; develop software in accordance with Air Mobility Command enterprise requirements; and provide a scalable and expandable architecture, Web applications, and consistent access across the Defense Department.

Dec 5/07: The EADS Aerial Refueling Boom System (ARBS) performs its first in-flight contacts with an aircraft. The initial refueling contacts used the advanced ARBS installed on an A310 testbed aircraft, which conducted multiple boom hook-ups with an F-16 receiver aircraft flying at 27,000 feet. The ARBS’ 40 foot boom was deployed to its operational length and inserted into the F-16 receiver aircraft’s dorsal refueling receptacle. Note that this was a “dry contact” that did not transfer fuel in the air – as Boeing’s KC-767 did back in January 2007.

ARBS uses fly-by-wire technology and an automatic load alleviation system for enhanced controllability, and can offload up to 1,200 gallons of fuel per minute. Today’s flight test was the 60th for the boom, totaling more than 160 flight hours. ARBS will equip Australia’s 5 KC-30B MRTT tankers, the UAE’s 3 A330 MRTT aircraft, and the similar KC-30/ FSTA aircraft offered to the US and Britain. EADS release | NGC release.

Dec 3/07: EADS Airbus CEO Louis Gallois calls for increased American production of Airbus aircraft, in response to the business problem of build costs in Euros and buyer contracts in US dollars. Reportedly, every 10 cent drop in the US dollar costs EADS over $1 billion. His statements provoke a reaction in France. Can Airbus do it? And if they can, would the offered US content level in Airbus’ KC-X bid be the first place one might see those indications?

Read “Cost Pressures Force European Aerospace to Look Outside Europe.”

Nov 29/07: A Boeing release conveys the fact that its KC-767s still have some loose ends to tie up. While Boeing recently flight tested a newly designed pylon that attaches the Wing Air Refueling Pod (WARP) to each Italian KC-767 tanker wing, and completed Federal Aviation Administration (FAA) certification testing for the KC-767 mission control system, other tasks remain:

“In the months ahead, Boeing will transfer fuel to a receiver aircraft using the Italian KC-767 WARP and centerline Hose Drum Unit (HDU) refueling systems, accomplish night refueling on the Japan tanker using the fifth-generation boom with upgraded software and complete any remaining FAA certifications.”

As of Jan 3/08, when both competitors announced the submission of their final bids, Boeing had yet to pass fuel to a flying aircraft from its WARP pods, or accomplish night refueling with its advanced boom. Meanwhile, its KC-30 competitor has yet to pass fuel to a flying aircraft at all from its own EADS ARBS advanced refueling boom.

Nov 23/07: Gen. Arthur Lichte, the commander of USAF Air Mobility Command, places the stakes behind this contract in perspective, and discusses past aerial tanker program issues, as he addressed the Logistics Officer Association. He said that it currently costs $8.5 million per year to keep 85 unflyable KC-135s maintained per Congressional rules, and added that even if the first KC-X aircraft is delivered on time in 2011, and 15 a year are delivered after that, the last KC-135 will leave the fleet in 2048, at an age of about 87 years. However, if the program runs into any problems and slips by just 3 years, and Air Force officials are unable to procure 15 aircraft a year, the last KC-135 could retire in the year 2082, when it would be more than 120 years old.

“AMC Commander Discusses: KC-X, C-5 Programs” takes a critical look at the calculations involved, and notes the General’s other statements concerning failed KC-10 modernization programs and the C-5M refurbishment program.

Nov 23/07: A Defense News report points to the refueling booms as a potential risk issue for the KC-X program:

“The new refueling boom for the KC-30 has been installed on the Australian version of the plane but remains untested. And only after an expensive two years of re-engineering has Boeing solved aerodynamic problems with the underwing refueling pylons on tankers for the Italian air force, the same version of the plane being offered to the U.S. air service.”

Nov 20/07: The Seattle Post-Intelligencer reports that the USAF has delayed its choice again, and now plans to award the contract in February 2008 at the earliest, instead of January. Sue Payton, the Air Force’s top acquisition official, said that final proposals aren’t expected until December 2007 or January 2008:

“We are giving [Boeing and NGC/Airbus] every opportunity to substantiate how they are going to improve their weaknesses and mitigate risk…. We will not award the tanker until we are absolutely positive we have assessed all of their inputs and they have given us their best and final offer…. I cannot say that we are going to get this done in January. I think we are looking more at the February time frame…”

Nov 19/07: If the Airbus KC-30 is selected, it will fly with upgraded GE engines. Recently, Finnair selected GE’s CF6-80E1 engines to power their A330-300s, incorporating the Tech CF6 program’s new high-pressure turbine upgrade. Since the KC-30 also plans to use this engine, and has a later delivery schedule, the USAF would also receive Tech CF6 engines.

GE launched the Tech CF6 program in 2006; its new technologies include high-pressure turbine airfoil cooling advancements that will enhance operational reliability, lower maintenance costs and improve fuel burn retention. Tech CF6 enhancements will be standard on CF6-80E1 production engines beginning in mid-2008. GE release.

Oct 11/07: Boeing announces a Memorandum of Agreement (MOA) with Cobham plc subsidiary Sargent Fletcher, Inc. of El Monte, CA, to provide the body fuel tank system for the KC-767 Advanced Tanker (AT). Mark McGraw, vice president, Boeing Tanker Programs said that: “With these body fuel tanks, the KC-767’s usable fuel capacity exceeds what the U.S. Air Force requires. Sargent Fletcher’s system extends the KC-767’s range and off-load capacity without sacrificing size.”

Boeing’s choice of Sargent Fletcher followed a best-value source selection process that focused on technical readiness, price and supportability. The MOA provides the terms under which Sargent Fletcher may be awarded subcontracts for the fuel tank system if the KC-767AT is selected in the U.S. Air Force’s KC-X tanker competition. Boeing release.

Oct 2/07: Northrop Grumman Corporation announces that it has selected Melbourne, FL-based BRPH Companies, Inc. to lead a multi-firm team to design the KC-30 Production Center in at Mobile’s Brookley Industrial complex, directly adjacent to EADS’ Final Assembly Line where the A330 airframe will be assembled and flight-tested.

BRPH is leading a team consisting of KBR’s Mobile, AL office and Thompson Engineering, which is headquartered in Mobile. The team will design the production facility, and will also provide ongoing technical support throughout construction if and when it goes ahead.

Sept 25/07: A BWB for KC-Y? Boeing may have a game-changer up its sleeve for stage 2. The US Air Force Association’s Air Force Magazine reports that:

“Boeing is hoping to have its Blended Wing Body X-48 demonstrator technology ready in time to compete for the Air Force’s second big buy of aerial refueling replacement aircraft, slated for about 2020 and dubbed KC-Y. (The service plans a three-phase replacement effort, starting with the current KC-X competition and followed by KC-Y and KC-Z.) A subscale BWB demonstrator with a 21-foot wingspan recently flew, and Boeing said full-size types could fill a wide variety of passenger, cargo, or tanker functions. It expects to be able to make a proposal on a full-size tanker by about 2015. Besides offering far more internal volume than today’s tube and wing configurations, a BWB tanker could also fly with two refueling booms, doubling the speed at which USAF aircraft could gas up. The program is teaching Boeing how to build rectangular pressure vessels versus the standard tubes and about the BWB flight control laws. However, the BWB would not be a candidate for a long-range strike aircraft. With three engines mounted on top of the rear of the aircraft, it wouldn’t be very stealthy. The placement of the engines does make it quieter than today’s airliners and cargo aircraft, says Boeing.”

Sept 25/07: A Flight International report says that Northrop Grumman will switch KC-X airframes from the Airbus A330-200 converted passenger model to the A330-200F freighter model. The current proposal adds a cargo door and localized strengthening to the upper floor of the A330-200, because the A330-200F had not received a launch customer, and would have increased the cost of the original bid. “I think [the switch to the freighter model] is inevitable, but right now it’s not in our proposal,” says Paul Meyer, Northrop’s vice-president and general manager for the KC-30 program.

GE, who had declined to offer an engine for the A330-200F, might be the biggest winner of any switch. Winning the KC-X contract would mean that the USAF would pay GE to certify their engine on the freighter, effectively re-introducing it as an option for civilian A330-200F models alongside P&W and Rolls Royce engines.

Sept 25/07: Advance production and the promise of early delivery worked very well for EADS Eurocopter’s EC145 in the US Army’s LUH competition. Along similar lines, Team KC-30 announces that the first KC-30 Tanker aircraft, successfully executed a nearly 4-hour flight after completing assembly in less than 75 days. “The aircraft will be ready for installation of refueling and military systems in November… and will be the first aircraft delivered to the U.S. Air Force if the Northrop Grumman team is awarded the KC-X contract.”

Aug 30/07: Boeing announces that the Japan Air Self-Defense Force’s (JASDF) first KC-767 Tanker has resumed flight testing following the completion of scheduled ground modification work. See release for details.

Aug 23/07: Northrop Grumman announces that EADS’ advanced Aerial Refueling Boom System (ARBS) has successfully completed ground-based electrostatic discharge tests, which ensure that the boom and its fly-by-wire control system will not malfunction if an electrostatic current is created during contact with a receiver aircraft. Electrostatic build-up can occur on any airplane because of in-flight atmospheric conditions.

The tests involved an instantaneous electrical charge of 200,000 volts on the boom’s nozzle, and were performed with a fully functional ARBS installed on an Airbus A310 demonstrator aircraft.

Aug 8/07: KC-Y and KC-Z. The US Air Force Association’s Air Force Magazine reports that:

“About 2023, the Air Force plans to contract for a second batch of tankers, dubbed KC-Y, and in 2033, it goes for the third or KC-Z batch, ultimately retiring all KC-135s along the way. At no time are tanker purchases expected to exceed $3 billion a year in current dollars; that’s all the Air Force expects to be able to spend… For that money, the service expects to be able to buy between 12 and 18 per year, replacing the entire tanker fleet over 40 years.”

Aug 6/07: USAF acquisition chief Sue Payton is quoted in the Financial Times of London as saying that splitting the deal for an initial 80 tankers would prove too costly:

“Because we are trying to do so much, we don’t have the money upfront that it would take to carry two or three [tankers] through development and then into procurement.”

Aug 3/07: Reuters reports that Jacques Gansler, a defense undersecretary for acquisitions during the Clinton administration who is now at the University of Maryland, has issued a study arguing that the USAF could save up to 30% on the KC-X program with a split buy. His point of comparison is the successful PW F100/ GE F110 dual fighter engine program for F-16s, and now F-15s as well. Loren Thompson of the Lexington Institute notes that the study refers only to procurement costs, however, not development costs or maintenance & operations. Gansler described himself as an independent third party, but his study is partially funded by EADS, which views a split-buy as a certain smaller win vs. a larger potential win against much higher odds.

At the same time, USAF Lt. Gen. Donald Hoffman told the US House Armed Services’ air-land subcommittee that changing the winner-take-all strategy now would delay the contract by 12 to 18 months, and would double the cost of development to $4 billion.

June 12/07: The first militarized KC-30B MRTT is rolled out. The rollout clears the way for a series of flight validation tests, including refueling contacts with a variety of receiver aircraft, prior to the KC-30B’s delivery to the Royal Australian Air Force’s 33 Squadron.

May 7/07: USAF Link’s “Air Force officials evaluating KC-X proposals” describes the staffing, acquisition system, and some of the mechanisms that the USAF has set up to get through the KC-X acquisition process… and protect it from challenges later on.

April 12/07: Boeing successfully extends and retracts the left and right Wing Aerial Refueling Pod (WARP) hose-and-drogue refueling systems for the first time. The flight marks the beginning of a series of in-flight tests—at various speeds and altitudes—that will demonstrate the hose’s stability and result in using the WARP hoses to offload fuel to various aircraft. That last test hasn’t happened yet, however, and the competition’s KC-30s use more mature and tested technology.

KC-X tankers, and the Italian KC-767As will carry both a refueling boom that works with most USAF aircraft and fits into the aircraft’s back, and a hose-and-drogue system favored by the US Navy and a number of NATO countries. When using the WARPs, the tanker aircraft trails a hose from either wing with a drogue (basket) attached to the end. The receiver aircraft uses a probe to connect to the basket and take on valuable fuel. When fully functional, the KC-767’s WARPs can offload 400 gallons of fuel per minute each. Boeing release.

April 17/07: Boeing adds Delta TechOps, a division of Delta Air Lines, to their bid team as a provider of parts support and fleet management services for the KC-767 Advanced Tanker. As a result, Delta TechOps becomes eligible to supply interim contractor support for commercial aircraft parts if Boeing is awarded the U.S. Air Force KC-X Tanker contract.

April 11/07: Boeing announces their bid submission, and touts their key selling points. Note the length of the bid…

“The 7,000-page KC-X proposal describes a tanker uniquely designed for its primary air refueling mission, but also capable of moving cargo, passengers, patients and medical crewmembers….Right-sized to enable access to 1,000 more bases than the KC-135, this robust aircraft allows commanders to deploy more tankers, ensures more booms are in the sky, covers more refueling orbits and offloads more fuel.

The Boeing KC-767 Advanced Tanker will be designed, built and supported by 44,000 Americans and 300 U.S. suppliers and save taxpayers nearly $10 billion in fuel costs compared to the competitor. Boeing will produce the tanker at its facilities in Everett, Wash., on the existing commercial line where it has built more than 950 highly reliable and maintainable 767s. Installation of military refueling systems and flight test activities will take place at the company’s finishing center in Wichita, Kan.”

April 10/07: Northrop Grumman and EADS announce their bid submission, and tout their key selling points:

“The competition to build the KC-X is as much a competition of vision as it is of aircraft,” said Scott J. Seymour, corporate vice president and president of Northrop Grumman Integrated Systems sector. “The KC-30 Tanker will provide our Air Force leaders and combatant commanders everything they have asked for in air-to-air refueling and more. More refueling capacity, more versatility against an uncertain future; more capability and more value per aircraft…. Northrop Grumman’s KC-30 Tanker carries 45,000 more pounds of fuel than a KC-135, providing a significant boost to the U.S. Air Force’s global reach. The KC-30 is also designed to refuel Navy and coalition aircraft, and to serve as a multi-role transport aircraft to move passengers, cargo and medical evacuation patients.”

March 28/07: Northrop Grumman announced its full KC-30 team.

March 15/07: Some of the relevant excerpts from “DoD News Briefing With Undersecretary Of Defense For Acquisition, Technology And Logistics Mr. Ken Krieg From the Pentagon”:

“But we’ve spent a lot of time talking about, you know, how we, first of all, get the right capability…. we especially wanted to make sure that our—the request for a proposal we put out there was for a product that we wanted, not for a product that ensured a competition, but for a product we wanted. And we worked a lot at that over the period, thinking about it not only from an Air Force perspective, but from a joint perspective as well. And I mean, I feel pretty good about where it came out. It was that transparent of a development of an RFP as one could ever expect….

Look, I’d always like a competition, but having to have a competition for something I don’t want is not of interest. And you always—you know, when you’re down to handfuls of suppliers on—you’re always working that balance…. more competition is better than less competition, but to have to go to a competition for something you don’t want then sends you off into an environment you don’t want to be in either….

When we did the Mobility Capability Study… one of the conclusions we came to as we looked at alternatives in that space was that as the nation looked at a follow-on tanker, that if the price was right for doors and floors, that the agility that that would create in terms of being able to have additional palette capability, additional personnel capability, you’ll pick up some additional medical capability… additional flexibility in lift, that, you know, we didn’t do a cost-benefit…. But in any sustaining operation, the capability to do palettes and people through more and varied types of airplanes was worth a fair amount. It wasn’t worth building a tanker for, but if you could get it for a reasonable investment, it made a lot of sense to do it because—oh, by the way, right now we’re sending lots of palettes to places around the world, lots of palettes to the theater, in particular. We’re moving lots of people back and forth. Some of that’s on commercial carriers, some of that’s on C-17s, some of that’s hopping on C-130s.

...it was very clear not in the first seven days of the conflict or the first limited engagement because at that time tankers are doing their tanker mission—I mean, that’s—we’re principally buying tankers to be tankers—but in a sustaining operation over time, the agility that being able to make them a cargo carrier—as long as you are trying to optimize the airplane as a cargo carrier—that that agility made a lot of sense inherently and analytically…. putting pallets on a C-17 is extremely inefficient, just—I mean, it’s built for large cargo, not for pallets.”

Consider in light of the Lexington Institute’s November 2006 brief “Fate of Huge Tanker Program Could Hinge on Cargo Role.” Note, however, that Krieg is still performing the balancing act here. Implementation of his description can mean more tankers in the air to cover a larger number of tasks, with less cargo space and better short field performance to land in more places for delivery (KC-767), or fewer aircraft available, but with more cargo and/or fuel capacity per plane (KC-30).

March 12/07: Boeing reaches agreement with United Technologies subsidiary Pratt & Whitney on the price and terms under which it will supply its PW4062 engines to their KC-767 program. While GE’s CF6-80C2 engines power the Italian and Japanese KC-767s and many commercial models, Boeing announced in 2004 that the PW4062 would be its future platform choice for the USAF KC-767.

The PW4062 engines have between 52,000-62,000 pounds certified thrust; they also power A310-300 and A300-600 aircraft, the Boeing 747-400, 767-200/300s, and MD-11 commercial jets.

March 9/07: USAF Chief of Staff General Michael Moseley offers a CSAF’s Scope message to the Air Force re: The New Tanker:

“The KC-X, our new tanker, is our number one procurement priority. The single point of failure for an air bridge, the single point of failure for global ISR (Intelligence, Surveillance & Reconnaissance) and the single point of failure for global strike is the tanker. And this is not just an Air Force issue – it is a joint and coalition force issue as well. Tankers are crucial to the deployment and employment of joint and coalition combat power and are central to rapid response for humanitarian relief operations. Our KC-135 inventory has an average age of over 45 years, and all were delivered to the Air Force between November 1957 and December 1964—seven years before I came on active duty!

It isn’t just the age of the aircraft that concerns me. They also suffer from corrosion, structural fatigue, and deterioration in wiring, fuel systems components, and ducting—all while operating at high OPTEMPO (OPerational TEMPO) in a time of war. We recently released our KC-X Request for Proposals, which asks industry to submit proposals that meet our strict tanker requirements. Even though we have started the replacement process, the mother of the last KC-135 pilot has not yet been born. With the funding currently planned it will take over 30 years to replace the entire KC-135 inventory. We can’t buy and field the KC-X fast enough.”

March 5-6/07: Boeing announces that an Italian KC-767 Tanker transferred fuel in flight from its advanced refueling boom to a B-52H bomber (10,000 pounds, March 5), and an F-15E fighter (5,500 pounds, March 6), under a cooperative research and development agreement with the U.S. Air Force.

EADS’ ARBS boom for the KC-30 has yet to meet this milestone, but its hose-and-drogue refueling technology is more reliable at present.

Feb 12/07: Boeing announces that it will offer the KC-767 Advanced Tanker for the U.S. Air Force’s KC-X Tanker competition. No 777 aircraft – just the 777 commercial digital flight deck in the USAF’s 767-200s. Their Global Tanker Team for the KC-767 includes Smiths Aerospace, Rockwell Collins, Vought Aircraft Industries, Honeywell and the newest member – Spirit AeroSystems. They are the largest airframe supplier to Airbus, manufacture the 767’s leading edges, and have contributed advanced tooling and other work to Boeing’s 777, 787 Dreamliner, and 737 Next Generation programs.

Feb 8/07: Northrop Grumman and EADS announce that they’ll bid on the program.

Jan 30/07: Lt. Gen. Donald Hoffman, the Assistant Secretary of the Air Force for Acquisition, announced today the posting of the KC-X Aerial Refueling Aircraft Request for Proposal to the Federal Business Opportunities website, signaling the official launch of the Air Force’s #1 acquisition priority program. The release notes that “The KC-X program is the first of three acquisition programs the Air Force will need to replace the entire fleet of aging KC-135 Stratotankers….” The RFP stipulates 9 primary key performance parameters:

1. Air refueling capability
2. Fuel offload and range at least as great as the KC-135
3. Compliant Communication, Navigation, Surveillance/Air Traffic Management (CNS/ATM) equipment
4. Airlift capability
5. Ability to take on fuel while airborne
6. Sufficient force protection measures
7. Ability to network into the information available in the battle space
8. Survivability measures (defensive systems, Electro-Magnetic Pulse (EMP) hardening, chemical/biological protection, etc)
9. Provisioning for a multi-point refueling system to support Navy and Allied aircraft

The USAF says that final RFP defines an integrated, capability-based, best-value approach, and includes specific factors for assessing the capability contribution of each offeror, along with cost and assessments of past performance and proposal risk. DID’s initial reading is that the RFP does support “objective requirements” above the minimum. Does it set them high enough and weight them strongly enough to interest Airbus? We shall see. USAF release.

Jan 24/07: Boeing announces that its KC-767 Tanker used the fifth generation, fly-by-wire refueling boom for the first time, to make a series of aerial “dry contacts” with a B-52 bomber assigned to the Air Force Flight Test Center at Edwards Air Force Base, CA.

Both Boeing and EADS are offering advanced refueling booms, design to improve refueling control and visibility. Boeing’s advanced boom can transfer 900 gallons/ 3,400 liters of fuel per minute, uses advanced cameras to give the boom operator a better view, and automatically corrects its position to reduce potential damage to the receiver aircraft. With 2,600 fewer parts than previous booms, it also is easier to maintain.

As a point of comparison, EADS’ ARBS advanced refueling boom claims a capacity of 1,200 gallons/minute, but is at a less advanced stage of development. It would not undertake a similar trial until December 2007, as had yet to pass fuel to an aircraft in flight as on the Jan 3/08 final bid submissions.

Appendix A: KC-X RFP v2.0 – The New Structure

In the wake of their initial win, Airbus and Northrop Grumman’s primary challenge was to ensure that their own potential industrial base was strongly mobilized, in order to raise the political costs of an all-Boeing reversion. Their secondary goal was to improve their position for KC-X v2.0, including blunting protectionist sentiment that opposes any purchase of Airbus planes. Declarations that they’d accept a “split buy” outcome, so long as they were left with production of 12 planes per year, were a step in that direction.

Boeing’s challenge was simpler, and more straightforward: get at least a majority share of the USAF’s KC-X tanker order.

The USAF stated its opposition to a split-buy proposal many times, and worked hard to avoid that outcome. They might have been convinced to pay that price, if they believe that the alternative would be a program that remains stalled for a long time. Events showed them moving toward that conclusion, albeit slowly and fitfully – but then the Round 2 RFP came out, with a clear “winner take all” approach.

The Round 2 RFP certainly clarifies the nature of the competition. Round 1 featured 37 mandatory requirements, and 771 optional requirements that could affect evaluations. Round 2 reverses that ratio, with 373 “go to war on Day 1” requirements that must be met to qualify, and 93 “trade space” requirements that earn extra points.

The resulting RFP is best described as a cost-driven, best-value competition, using fixed-price bids. It’s worthy of note that the prices aren’t entirely fixed, for good reason. Imagine, for instance, that the US dollar devalued sharply over the contract’s life and imported materials became more expensive, or inflation skyrocketed and labor rates changed accordingly. Forcing the manufacturers to absorb those losses would be unfair, and could induce serious financial problems for the company. Provision 836 AESG/H025 provides a formula for adjusting prices if key inputs fluctuate, in order to create an adjusted payment price. With this safety valve acknowledged, the “fixed-price” bids as submitted will form the baseline.

Those bids are just the starting point. “Total Adjusted Price” (TAP) reflects bid price as adjusted through 3 main filters: the same IFARA model used in Round 1 to evaluate the contenders, fuel efficiency, and military construction.

The IFARA model will use updated scenarios to cover the expected range of contingencies, and there are several ways to have one’s costs adjusted. A larger plane that could cover a given scenario with fewer planes, for instance, might get its TAP lowered. A smaller competitor might gain under another scenario, where range, basing, and capacity suit it better. Those adjustments will be summed, and applied.

Fuel burn will use 489 average flight hours per year rather than 750 in Round 1, as 489 is the actual average flown by the KC-135 fleet to date. This may seem to disadvantage the KC-767 slightly, but there’s another key variable that makes the effect far less clear. Fuel burn will also use the mission profiles and mission percentages laid out in the IFARA model. Again, contenders will have their bid price adjusted accordingly, depending on their fleet’s estimated fuel burn costs over a 40-year cycle.

For military construction, the USAF picked 11 relevant KC-135 bases – which are not necessarily the tankers’ future homes, since that’s a separate decision. Aircraft that would require changes or improvements to ramps, taxiways runways, hangars, at those 11 air bases would have their bid price changed accordingly in their TAP. Actual aircraft of the submitted types will be used at these locations, in order to make the evaluations.

If there’s more than 1% difference in the TAPs, the government buys the ‘cheaper’ airplane, which is exactly what happened. If there had been 1% or less difference, the USAF would have been directed to look at the 93 optional “trade space” requirements and their accompanying points, adjusting the TAP accordingly, and then buy the ‘cheaper’ airplane. Each trade space item is worth a certain number of points, and is either met or not met. The one exception is fuel offload, which gives between 2-10 points as different levels of capability are reached (total extra weight is therefore 1/10%). There are 103.05 total trade space points, which includes 4 requirements worth 10 points each, 6 worth 4 points, 19 worth 1 point, 49 worth 0.333 points, and 15 worth 0.25 points. The result would be a new adjusted price, and, again, the ‘cheapest’ bid selected.

Because IFARA also ties into fuel burn, and additional range and fuel offload capacity do not factor in except through IFARA, the IFARA model looked set to be the hinge on which this competition will turn. In addition, all qualified bid teams will have access to the IFARA model. Which means one could expect arguments about some of the parameters, once the contending teams have crunched their performance through the models and gone over the criteria. Instead, Boeing decided to more or less nullify IFARA with a bid price that rendered it irrelevant.

On another likely lobbying front, the KC-X v2.0 RFP took no position with respect to the ongoing Boeing-Airbus trade subsidies dispute at the World Trade Organization. This refusal is explicitly stated, and was fiercely defended and maintain. The RFP does include the 836 AESG/H018 clause. It states that any financial or other penalties assessed by the WTO are entirely the manufacturers’ responsibility, and cannot be passed on to the USAF in any way.

Appendix B: The Contenders and The Cargo Factor – KC-30B, KC-767… KC-777?

During the now-canceled round 1 competition, Airbus’ A330 was matched against Boeing’s 767. In a new wrinkle, Air Mobility Command was brought into the RFP draft process, and the USAF said that:

“the Air Force also intends to take full advantage of the other capabilities inherent in the platform, and make it an integral part of the Defense Transportation System.”

Both contending aircraft offer substantial improvements over the KC-135’s extra capacity for cargo or people, in addition to their tanker roles.

The KC-135s can carry up to 6 standard 463L cargo pallets, 53 people, or about 18 medical litters. Just under 2% of American aerial tankers currently carry cargo loads, but that number is likely to increase. The existing aerial tanker fleet is being handled gently, given its age and the consequences of structural issues. Once those issues are removed, however, the frequency of current C-17 flights involving people and standard pallets rather than heavy cargo, will make more frequent tanker/cargo flights an attractive trade-off, despite the additional fuel costs.

Airbus’ A330/ KC-30/ KC-45

According to the EADS/NGC KC-30 team’s official Round 1 brochure [PDF], the A330-200 derivative can carry up to 226 passengers, or 108 medical litters, or up to 32 standard 463L cargo pallets, or some combination of the above, in addition to its full fuel load. At over 250,000 pounds capacity, it also carries more fuel than the 767, which is a particular advantage in the Pacific sector with its wide over-water expanses. On the other hand, its advanced 1,200 gallon/minute ARBS refueling boom did not actually transfer fuel to another aircraft in the air until March 2008. Competition delays have allowed Airbus to improve this gap, and an A330 conducted boom refueling in 2009.

On the flip side, the KC-30 is a larger aircraft than the 767, which requires a slightly longer runway at full load, takes up more “footprint” on limited-space tarmacs, and costs more to operate on a per-plane basis. In response, Team KC-30 stresses costs and efficiency on a per-mission basis, such as deploying a full fighter squadron with personnel and equipment, or deploying an Army combat team using transport aircraft with tanker accompaniment. They argue that if larger tanker aircraft, with more fuel and cargo space, mean fewer sorties required, the cost figures may look more equal once the mission the tankers are supporting is complete. There had also been some speculation that Airbus might be prepared to offer a very heavily discounted price, in order to close the buying price gap between the cheaper 767 and the A330. Some post-competition reports even pegged the KC-30 offer as cheaper.

The RFPs included more exacting data as each team made its case to the USAF, as well as final pricing. For example, Fleet Effectiveness Value (FEV), one of the 5 key source-selection evaluation criteria, is designed to communicate aerial refueling performance. The current KC-135 fleet is the baseline, with an FEV of 1.0. Calculated over 5 mission scenarios specified by the USAF, and using prescribed airbases, ramp space and resources, Northrop’s air mobility sector vice-president Paul Meyer says the FEV submitted with its KC-30 Round 1 bid was 1.62.

There had been some talk at Northrop Grumman of using the A330-200F freighter version instead as the base KC-X aircraft, which would be a departure from KC-30s bought to date. A switch would add new timeline risk and certification issues, as well as fuel efficiency penalties, in exchange for much better cargo performance. A330-200F aircraft add 11,000 pounds of zero-fuel weight to the base A330-200 design, and cut fuel capacity by 12,000 US gallons, in exchange for boosting cargo weight capacity by 60,000 pounds to 141,000. The type first flew in late 2009, and began service with UAE Eithad Airways in September 2010. So far, the 200F has only been suggested as a potential improvement or variant option after the contract is won.

Boeing’s KC-767 Advanced/ KC-767 NewGen/ KC-46A

Team Boeing’s KC-767 Advanced in Round 1 used a 767-200ER fuselage; a 767-300F freighter wing, landing gear, cargo door and floor; and a 767-400ER’s flaps and flight deck (derived in turn from the 777). A new fly-by-wire boom with remote viewing would expand the tanker’s effective refueling airspace, and offload more fuel. Engines would be 2 Pratt & Whitney PW4062s, with 62,000 pounds of thrust each.

The KC-767’s advanced refueling boom had a 900 gallon/minute capacity, and had been tested successfully in live air-air refueling, including night operations. On the other hand, Boeing’s hose-and-drogue system was a technical risk factor that had undergone almost 2 years of redesign, and been a persistent problem for the Italian tanker order. That was a potential risk, and Round 1’s optimization had also penalized Boeing, due to the additional risk and certification work involved.

Their KC-767 “NewGen” (now the KC-46A) is a sharp contrast, as Boeing decided not to discuss their plane’s features – a stance it has maintained even after the award. This made assessments of Boeing’s Round 2 offering inexact and approximate. Earlier Round 2 comments from Boeing indicated a more standard 767, but pictures and videos appear to show lengthened wings and wingtip winglets, in order to deal with previous “flutter” issues and add cruise efficiency. What is known, is that Boeing is keeping the PW4062 engines. The firm still says it’s using a new fly-by-wire boom design, but the structure is now based on the larger KC-10 boom, in order to meet the fuel offload target of 1,200 gallons/minute. At the same time, GE’s refueling pods were replaced by the same Cobham products found on the A330 MRTT. The other clear change involved replacement of the 400ER’s 777-derived flight deck with one from the new 787 Dreamliner that includes 15.1” LCD flight display screens.

As their relative capacities demonstrate, the KC-767 is a smaller aircraft than the KC-30. One positive consequence is that it can take off from slightly shorter runways. The USAF requires the ability to take off from an 8,000 foot runway, but would prefer 7,000 feet as this makes more runways available. The KC-767’s size can also mean the difference between, say, 5 or 7 aircraft that can fit on the tarmac at a forward base. Boeing touts the KC-767 as 22-24% cheaper to operate and maintain than the KC-30 on a per-plane basis, and its base aircraft is cheaper to buy on the civilian market.

767-200ER based planes can carry up to 190 passengers (-16% vs. KC-30), or 54 medical litters (-50%, NGC claim)/ 97 patients (-11.3%, Boeing claim), or up to 19 standard 463L cargo pallets (-41%), or some combination of the above, in addition to its full fuel load that is now confirmed at 212,000 pounds, slightly above the KC-135. The company claims that its strengthened floors allow the KC-767 to carry a similar weight of cargo to the A330, however; it would be interesting to see validated statistics compared to the A330F. Boeing could have submitted the 767-300 in Round 1, which is 19 feet longer, but their calculations determined that the extra capacity didn’t justify the extra procurement and operating expenses. That turned out to be a mistake, but they proceeded to win Round 2 with a 767-200 freighter derivative.

Northrop Grumman calculated a Round 1 Fleet Effectiveness Value score of 1.35 for the rival KC-767 in Round 1 (vs. 1.62 for Airbus), but Boeing did not release its number.

Boeing’s 777 Option

For Round 2, Boeing was openly contemplating a KC-777 offering, depending on the RFP’s criteria weightings. A KC-777 would offer 22.5% – 30% more offloaded fuel than the A330/KC-30 at 1,000 nautical miles, with the ability to carry up to 320 passengers (+42.6% vs. KC-30), or 156 patients (+44.4% vs. KC-30), or up to 38 standard 463L cargo pallets (+18.75% vs. KC-30), or some combination of the above, in addition to its full fuel load.

These statistics are impressive, but Boeing would have faced 3 big hurdles if it wished to offer a KC-777.

One is the 777’s cost, given the way the v2.0 RFP is structured. Boeing has almost certainly run the IFARA model to make sure, but on the face of it, the renewed RFP made a KC-777 offering unlikely. The RFP’s focus on cost, and lower value placed on extra points for the 777’s additional cargo, transport, and fuel capabilities, made the KC-777 look like a losing game. The 2nd issue was timeliness. Unlike the KC-767 and A330 MRTT, any KC-777 would have to be designed, built, tested, and certified from scratch. To add to that timeliness risk, Boeing already has a backlog of commercial orders for the 777. That 3rd issue leaves Boeing with choices that include some combination of: adding time and risk by investing or partnering to expand their production rate, convincing commercial customers to accept delays, or facing constraints on their delivery rate to the KC-777 military conversion and fit-out line.

In the end, those hurdles convinced Boeing to offer the KC-767 once again, with modifications that made it different from the KC-767s flying for Japan and Italy.

Appendix C: Airbus KC-30/ KC-45A Team

(lost Round 2)

Before its KC-X win, the KC-30/A330 MRTT had been ordered by Australia, Saudi Arabia, and the United Arab Emirates, as well as Britain’s unusual FSTA public-private aerial tanker partnership. None of these aircraft have entered service yet, but the ARBS full refueling boom system finally completed its first live “wet transfer” from an A310 aircraft in March 2008. The first live “wet transfer” from an A330-MRTT boom finally took place in October 2009.

EADS’ goal was 60% American content, to which one must add American content for corollary sales of civilian A330F freighters as production moves to Alabama. Other national beneficiaries of a US A330 MRTT order, in declining order of impact, would have been Spain, Germany, the UK, and France.

There are differences between the consortium that bid on the KC-X v1.0 proposals, and the team that bid on the v2.0 RFP. The v2.0 team is quite extensive; main players include:

EADS North America – American lead and systems integrator. Replaced Northrop Grumman in this role for the v2.0 bid.

EADS – A330 aircraft, and Air Refueling Boom System (ARBS). Key American locations: Mobile, AL, Bridgeport, WVA (ARBS and SF hose-and-drogue), and Arlington, VA. Aircraft would be militarized and final assembly would take place in Mobile, AL, which would also become an assembly center for worldwide civilian A330-200F freighter sales.

EADS-CASA in Spain is responsible for the design, testing and production of the ARBS boom, and is also likely to see work at its facilities near Seville, Cadiz, and Madrid. Manufacture of the Airbus aircraft is conducted all over Europe, with integration at Toulouse, France and/or Bremen, Germany. If final integration of the A330-200F freighters switches to Mobile, AL as promised, and the KC-45 program ends up substituting the A330-200F for the A330-200 as the base airframe, the amount of American content would rise slightly.

GE Aviation – CF6-80E1 engines. The CF6-80E1 is rated at 67,500 pounds of thrust, and power a number of commercial A330-200/300s. Key locations: Evendale, OH. Estimated total value for GE units from the KC-45 program: $5 billion. Unchanged in Round 2.

GE subsidiary Smiths Aerospace – Flight Management System; indeed, they are the supplier of choice for common Flight Management Systems for the KC-X tanker, no matter who wins. Key locations: Grand Rapids, MI.

Cobham plc subsidiary Sargent Fletcher Inc. – Air refueling hose and drogue systems; their products are also used on the KC-135, KC-10, KC-130J, MC-130H and F/A-18 E/F. The pods carry their own power system, and their 90 foot long hoses can offload approximately 420 gallons of fuel per minute. Key locations: El Monte, CA; Bridgeport, WVA. Estimated total value of Cobham win: $1 billion. Unchanged in Round 2.

Eaton Corp. – Actuators, pumps, valves, nozzles and other aerial refueling equipment. Mentioned in Round 2 team.

Goodrich Corporation – “Various aircraft systems”. Mentioned in Round 2 team.

Honeywell – Radio Management System, Mission Avionics Suite, and Mechanical Systems. Key locations: Albuquerque, NM; Phoenix, AZ; Redmond, WA; and Torrance, CA. Unchanged in Round 2.

Moog, Inc. – Flight control systems. Mentioned in the Round 2 team.

Parker Aerospace – Air Refueling Receptacle, a.k.a. Universal Aerial Refueling Receptacle Slipway Installation (UARRSI). This allows the KC-30 itself to be refueled in the air. Similar Parker UARRSI systems are currently used on the U.S. Air Force’s B-1B bombers, C-130 & C-17 transports, and KC-10 tanker aircraft. Also providing hydraulic system equipment, fluid conveyance products and fuel components. Key locations: Irvine, CA.

Vought Aircraft subsidiary Triumph Aerostructures – Wing structures. Mentioned in the Round 2 team.

Additional Readings

KC-X Program and Contenders

• US Federal Business Opportunities – contracting documents related to the KC-X Round 1, and Round 2’s FedBizOpps RFP #FA8625-10-R-6600.

• DID Mirror – Round 1 KC-X System Requirements Document [MS Word format, 1.27 MB]

• DID Mirror – Round 1 Final KC-X RFP [PDF Format, 480k]. If you’ve never read these before, it gets a lot better toward the end in terms of providing key information related to the evaluation controversies. Reading it, one can also see why the bid will cost $50-60 million.

• Build Them Both. A lobbying group that favors a dual-buy program, with accelerated deliveries.

• Boeing – Global Tanker: KC-X Competition. It used to list both a 767 and 777 option. This article offers a good KC-767 vs. KC-777 comparison.

• Boeing – Tanker Facts. Protest blog, launched after the loss. See also UnitedStatesTanker.com, launched as a lobbying platform in advance of Round 2; and US Tanker 2010, an allied lobbying effort.

• KC-45 Now. EADS North America’s lobbying site for the KC-X competition. See also the allied “Keep Our Tanker” site, and EADS’ Tanker Activity Update dedicated to news developments re: its various Airbus aerial tanker offerings.

• Northrop Grumman & EADS – KC-30 official site (dead). The planes would be assembled in Mobile, AL, and the Northrop Grumman – EADS consortium promised that “More than 50 percent of the aircraft’s content – from engines to avionics and systems – will come from American companies.”

• Northrop Grumman – America’s New Tanker (dead). Launched after the win, includes features designed to help people take political action.

• Airbus Military – A330 MRTT

• EADS Airbus – A330-200F Specifications

• Ilyushin Aviation Complex – IL-96-300

• Airliners.net – The Ilyushin Il-96M & Il-96T

• Breitbart’s Big Peace (July 21/10) – KC-X Tanker War: The Antonov Alternative. A critical look at the US Aerospace bid.

• USAF Fact Sheets – KC-135 Stratotanker

• DID (June 25/08) – KC-X: GAO Sustains Boeing Protest. Includes analysis of the likely path forward, reiterating predictions of a split-buy made in March 2008.

• GAO (June 18/08) – Boeing Bid Protest Press Release [PDF]

• Boeing (March 24/08) – B311344 Protest of the Boeing Company: Second Supplemental Protest [PDF format, Public Redacted Version]

• US Air Force (Jan 30/07) – Air Force Posts KC-X Request for Proposals

• US Air Force (Jan 30/07) – Tanker recapitalization proposal released

Related Studies and Reports

• US GAO (March 26/12, #GAO-12-366) – KC-46 Tanker Aircraft: Acquisition Plans Have Good Features but Contain Schedule Risk.

• Iris Independent Research (Oct 19/10) – 9 Secrets of the Tanker War

• USAF Air & Space Power Journal (Fall 2009) – KC-X: The Game Changer for Mobility

• US Air Force Association Mitchell Institute for Airpower Studies (April 2009) – The Tanker Imperative [PDF].

• USAF Air Mobility Command (February 2007) – KC-X: The Next Mobility Platform: The Need for a Flexible Tanker [PDF]. White Paper.

• RAND (2006) – Analysis of Alternatives (AoA) for KC-135 Recapitalization

• RAND (2004) – Options for Replacing the Air Force’s KC-135 Tanker Aircraft and AWACS, JSTARS, and Rivet Joint ISR Aircraft

• US GAO (March 6/07, #GAO-07-367R) – Air Force Decision to Include a Passenger and Cargo Capability in Its Replacement Refueling Aircraft Was Made without Required Analyses

• US GAO (July 23/03, #GAO-03-1048T) – Considerations in Reviewing the Air Force Proposal to Lease Aerial Refueling Aircraft. Deal died when it was found that Darlene Druyun had improperly influenced decisions, before jumping to a job with Boeing.

• US GAO (Aug 8/96, NSIAD-96-160) – Aging Refueling Aircraft Are Costly to Maintain and Operate. ”...the cost per KC-135 flying hour is projected to increase from $8,662 in 1996 to $10,761 in 2001.”

Ongoing News and Views

• Rockwell Collins’ Horizons magazine (Vol. 16, #4) – Refueling Innovation [PDF]. Discusses their development of the KC-46A’s flight controls and refueling systems.

• Forbes Business and the Beltway blog (Feb 28/11) – How Boeing Won The Tanker War. By the Lexington Institute’s Loren Thompson, who had been predicting a Boeing loss.

• Los Angeles Times (Feb 28/11) – How one lawmaker gave Boeing a boost in tanker contest. That would be Rep. Norm Dicks [D-WA].

• Teal Group – March 2010 Letter. RE: KC-X politics in America, and the Europea trade angle.

• Leeham News and Comment (Jan 4/10) – Outlook for Airbus, Boeing in 2010. Aerospace analysts at Leeham look at a number of programs, including KC-X, and set them in context with respect to the firms’ overall transport/passenger aircraft portfolios. They believe that Boeing is trying to keep Airbus from establishing a dollar zone production foothold, as much as it’s trying to win the military contract.

• Lexington Institute (Nov 2/09) – Tanker Wars: Why Northrop Grumman Thinks It Can’t Win

• Aviation Week (Sept 21/09) – New Players Poised for Next KC-X Duel. Looks at the people involved in the USAF, Boeing, and NGC.

• Aviation Week (Sept 15/09) – USAF Worries About Refueler Repair Costs ”...maintenance crews sometimes work 7 hr. for every hour of KC-135 flight… When you get out to about 2018 and 2020, what started out as about $2 billion a year to maintain the KC-135 fleet goes all the way up to $6 billion…. In total, aging-related costs are expected to add at least $17.8 billion to the price of maintaining the KC-135 for 40 years.”

• NDIA National Defense magazine (June 2009) – Defense Department Can Split Tanker Buy, And Still Save Money

• Col. Ken Allard (June 16/08) – Air Force Tanker Contract Will Test Alabama Legal Infrastructure. An under-appreciated element. “If Boeing Co. had won the tanker contract, most of the manufacturing work would have been done in the Seattle area. EADS proposes building the aircraft at a new plant in Mobile, Ala. But are the supporting legal infrastructures in Seattle and Mobile roughly equal? Such concerns are vital, given the usual propensities for fraud and malfeasance in any $50 billion contract…”

• Lexington Institute (March 12/08) – Boeing Fights Back: How it Plans to Prevail

• Flight International (Jan 21/08) – Size matters in US Air Force KC-X contest. As DID noted earlier: “Is bigger always better? This is at the heart of the battle between Boeing and Northrop Grumman…” A Northrop Grumman release later elaborates on the model used by the KC-30 consortium to derive relative performance figures.

• Flight International (Jan 16/08) – Airbus sees strong rise in widebody sales but Boeing remains stronger. Gives exact breakdowns for Boeing and Airbus’ sales across all passenger aircraft they produce. Airbus’ complete redesign of the A350 is the big reason for their rise – the original A350’s features, and the uncertainty created by the move, had slashed their 2006 widebody sales.

• The Woracle (Jan 14-16/08) – Flight International editor Graham Warwick attends briefings from Boeing and from Northrop Grumman/Airbus, then offers a synopsis of the points being made by each side.

• Flight International (Nov 26/07) – Boom or bust time for US tankers. Interesting comments re: political/geographic bases of support for each team.

• US Air Force Magazine (Feb 13/07) – Why the 767? As opposed to the KC-777, or even the KC-767-300. Boeing explains its choice.

• US Air Force (March 10/07) – Logistics officials discuss Stratotanker sustainment. Apparently, the aircraft need more spares than the USAF had planned. Real fatigue problem, or encouragement to report more as an advert by the USAF for the KC-X’s necessity?

• Flight International (Feb 13/07) – Crucial contests: US tankers and transport aircraft

• Lexington Institute (Nov 28/06) – Fate of Huge Tanker Program Could Hinge on Cargo Role. “The wild card is cargo-carrying capacity, because if the request for proposals sets a modest goal, that will tend to favor the 767, and if it sets an ambitious goal that will tend to favor the A330. With cargo thresholds potentially driving the competitive outcome, Congress will be watching closely for any sign of bias. If it doesn’t like what is sees, tanker modernization could be delayed yet again.”

• Special Operations Technology (Nov 19/06) – KC-X. Very good summary of all of the tankers’ envisaged roles and key capabilities, then adds: “Equally important as the strategic KC-X program, if not more so, is an ever-growing urgency to bring relief to the AFSOC tanker aircraft. The KC-Xs will keep the MC- and HC-130s topped off, but they too need attention.

• Seattle Post-Intelligencer (June 1-2/06) – Landing the Tanker article series.