TANKER USAF - Appels d'offres

Imposing a penalty on a Northrop Grumman-EADS aerial refueling [Vous devez être inscrit et connecté pour voir ce lien] bid to account for illegal European [Vous devez être inscrit et connecté pour voir ce lien] to Airbus can be easily, legally done, U.S. Rep. Jay Inslee, D-Wash., said Thursday.
"We're not asking for a political decision," Inslee said in an interview. "We're asking for a legally fair decision that is equitable."
Inslee was one of 12 representatives and five senators from Washington, Missouri, Kansas, Connecticut, Illinois and New York who took part in a news conference Wednesday to call for the Air Force to account for a September World Trade Organization interim ruling on European subsidies in its tanker contract process.
"We're doing everything humanly possible because it's just inexusable if this injustice is not fixed," Inslee said. "We need to make sure that the illegal and unjustified subsidies are taken into consideration in the bidding process."
The Department of Commerce has a countervailing duty process it could use to determine a penalty, Inslee said. "If you sort of do the rough homework it may be as much as $5 million per plane."
It's important for the Air Force to act to maintain consistency with U.S. trade policy, preserve American jobs and maintain defense infrastructure that's the "spine of the entire national security system," Inslee argued.
Also, European governments, even after the interim ruling, have very publicly announced plans to give launch aid to Airbus' A350 program, he noted. "They've said they're going to do it again, so we have to bring the hammer down here."
Pentagon and Air Force officials have said the draft tanker request for proposals does not account for the WTO ruling because the decision is not finalized and could still be appealed after that, and because a European counter claim against U.S. aid to Boeing is pending. Some have also argued against considering the case in the contract because that may run afoul of the WTO's process for assessing penalties.
The U.S. does not have to wait for the WTO to finalize its ruling or work through the its penalty process because WTO rules exempt military procurement, Inslee said. "What we are suggesting here is WTO compliant and consistent with both the letter and the spirit of the law."
Nor should the U.S. wait for the outcome of the European counter claim, he said. "Our federal government has concluded that that's a bogus claim. It was a slap back by the European Union without justification."
Specifically, defense contracts the claim calls subsidies were legitimate business that didn't run afoul of trade rules and state tax breaks are available to all companies, including Airbus, Inslee said.
The number of Congress members who showed up Wednesday is an indication that penalizing the Northrop-EADS bid is gaining support, Inslee said. "This idea is getting traction, and the reason it's getting traction is we've shown a way to do it for the administration."
Asked how Congress might force the administration on the issue, he said: "There are steps and we don't need to get the cart ahead of the horse to talk about those ... There are steps that could involve statute, they could involve votes on appropriation bills they could involve appropriation riders."
Responding to Inslee's comments Northrop spokesman Randy Belote said: "Northrop Grumman fully supports the Defense Department's position that the commercial aircraft subsidies dispute being addressed by the WTO has no place in the procurement of U.S. defense systems. It appears that Boeing's supporters are not confident that Boeing can win the tanker program on the merits of its offering so they will not be satisfied until the Defense Department eliminates the competition and awards Boeing a sole source contract."
In the interview, Inslee said the Air Force could legally bar the Northrop-EADS team from bidding, but added: "Although that is tempting, we're not suggesting that."

Another redneck idiot that cannot acceot the 767 belongs to the past.

Nor should the U.S. wait for the outcome of the European counter claim, he said. "Our federal government has concluded that that's a bogus claim. It was a slap back by the European Union without justification."

I won't say Rep. Jay Inslee is proposing an unfair coardly tactic, but I would sure like to a balanced, open and fair comparison on all front. There a big money pipe line from Washington DC to Boeing for more then 70 yrs. We need all info objectively

Inslee's telling the AF that they can pick whichever tanker they want, so long as it's Boeing...

Time to start over with a new tanker RFP to give the AF a competition with Defense contractors on Inslee approval list.

In the meantime, the US can just contract for refueling tankers based on the A330 that are already in service in other countries

Great, let's all retreat back to protectionism and watch everyone hurt badly by it.

These misguided populist vote-chasing fools will be the ruin of us all.

Everyone fair-minded about this know that both the USA & Europe have given loans, grants and soft R&D contracts.
The idea that Boeing is innocent and Europe alone is the offender is laughable.

But by all means, go for it.
Right now it is Airbus that is the dominant seller to the rest of the world outside Europe and the USA.

Can you say cut your own throat to spite your face?

I wonder how much Boeing Corporate or Boeing employees contributed to his election campaign?

Boeing's plan to "surge" production of the [Vous devez être inscrit et connecté pour voir ce lien] in Everett will boost plans for the proposed 767-based aerial refueling [Vous devez être inscrit et connecté pour voir ce lien] and help the company sell more 767s commercially, analyst Scott Hamilton [Vous devez être inscrit et connecté pour voir ce lien] Monday.
Boeing officials have said they will surge 787 production in Everett while they get the North Charleston, S.C., 787 line up and running. That means moving the 767 line, providing a chance to make the line more efficient, with about a 20 percent improvement in unit time, a Boeing spokesperson told Hamilton
And that means Boeing could lower its bid price in the tanker competition, whose [Vous devez être inscrit et connecté pour voir ce lien] would award the contract to the cheapest plane that meets 373 mandatory criteria, assuming the price is more than one percent lower, after certain adjustments. Observers expect Boeing to be able to offer a lower price than competitor Northrop Grumman, whose tanker is based on the larger, more-expensive Airbus A330.
The increased efficiency also will mean a smaller employee increase than would otherwise be needed for Boeing's planned boost of 767 production from one to two planes a month and will allow Boeing to sell more 767s commercially, the spokesperson told Hamilton.
See more details about the increased efficiency in his report.

Key points:

• The ability to increase production rates to sell more 767s in the coming years;
  
• Lower production costs, which will be built into the KC-X bid in the hot competition with the expected Northrop Grumman KC-30 submission.
  

Boeing’s proposed KC-767 refueling tanker will benefit from plans to establish a surge production line for the 787 program.
The connection is not obvious, for Boeing didn’t suggest as much when it announced that Charleston (SC) will be the location for the second 787 production line. As Line 2 is being established, Boeing will put a “surge” 787 line in Everett (WA), where Line 1 is located. The surge line will be in the forward bay where the 767 line is, requiring relocating the 767 line to the aft part of the bay.
Boeing plans to implement Lean production practices in the relocated 767 line, which has its origins for the airplane’s 1982 entry-into-service date. Lean practices will result in about “a 20% improvement in unit time as we increase [the production] rate and incorporate efficiencies,” a 767 program spokesperson tells us.
Boeing will begin to relocate the 767 line in 1Q2010; it will be operational in 1Q2011.
The efficiencies include:

• New tool designs with new technology and automation that will reduce flow, rebalance the line and improve assembly efficiencies;
  
• Improving employee ergonomics;
  
• New tooling to reduce the flow required to assemble the wings, which improves inventory holding costs and quality and overall costs;
  
• Laser alignment in place of manual tools; and, among other things,
  
• Incorporating auto-riveting and drilling to improve unit time and quality.
  

The smaller footprint also will allow Boeing to streamline processes and consolidate support.
Boeing declined to quantify the before-and-after employee head count for the 767 line. But the spokesperson said that a planned production rate increase in 2011 from one to two 767s a month will require the addition of “several hundred people in various skills.
“The increased efficiency means we will increase by less than we would have and build a better product. The increase in efficiency will allow us to sell even more 767s in the next few years.”
These benefits have clear implications for the prospect of building the KC-767 tanker should Boeing win the contract, which the USAF hopes to award in August next year (a goal we believe may be optimistic, given the political meddling that is going on). Most observers already believe a protest by the loser is likely, further delaying the contract.
Assuming Boeing selects the KC-767 as its choice to bid for the Air Force’s KC-X (which we think will be the case), the lower cost of building the airplane will be reflected in Boeing’s bid price, the 767 spokesperson confirms. With the competition so far emphasizing cost rather than value in the Draft RFP (Air Force rhetoric to the contrary notwithstanding), this should Boeing an additional advantage over the larger Northrop Grumman KC-30, based on the Airbus A330-200, which has a higher list price than Boeing’s 767-200ER on which the KC-767 is based.
The Air Force currently plans to procure its KC-X at the rate of 12-18 a year, or 1 to 1 ½ a month. The KC-X must also be what is called ITAR-compliant, which means access to military-unique equipment must be controlled during production. The new, Lean line will be prepared for ITAR requirements, says the Boeing spokesperson.
Boeing faces the challenge of relocating the line while the 767 is in production.
“We will continue to build airplanes sections in our current tools and location during the product line relocation,” the spokesperson tells us. “This process will require a synchronized, highly sequenced series of activities to minimize disruption. Concurrently, we will be reactivating rate tools, upgrading and incorporating improvements, adding new technology and moving and building new tools as part of this relocation activity. As a standard practice, we maintain and use our existing tools until tool tryouts are complete for all-new, upgraded, reactivated and moved tools. This is how we will mitigate disruption to our active production line.”
Although our emphasis in this column is how Lean will aid Boeing in a KC-767 bid cost basis, the hints that Boeing may gain more 767 sales in connection with the 787 surge should not be overlooked, either.

Ashton Carter, the Defense Department's acquisition chief, is scheduled to talk with reporters Monday about various issues, including the Air Force's aerial refueling [Vous devez être inscrit et connecté pour voir ce lien] contract, according to Aviation Week's Amy Butler.
That could be a harbinger of delay in the final tanker request for proposals beyond its originally projected release period of late this month, Butler [Vous devez être inscrit et connecté pour voir ce lien]. "Typically, if a top official comes out ahead of a milestone at the Defense Dept. to answer questions about a program, it doesn't bode well for that milestone taking place on time."

Airbus' A330 Multi-Role Tanker Transport has performed the first simultaneous refueling of two fighters with its all-digital hose-and-drogue system, the company [Vous devez être inscrit et connecté pour voir ce lien] Monday.
The Royal Australian Air Force [Vous devez être inscrit et connecté pour voir ce lien] used its left and right under-wing pods to transfer more than 25,000 pounds of fuel to two NATO F/A-18 fighters during 11 simultaneous airborne refueling contacts on Nov. 18, Airbus said.
"Operational flexibility and demonstrated robust mission capability are essential requirements for a military refueling aircraft," EADS North America Chairman Ralph Crosby, Jr., said in a statement. "This latest program success is further evidence that the A330 MRTT is ready to meet the demanding operational requirements of next-generation military tankers, including those of the U.S. Air Force as part of the Northrop Grumman KC-45 team."
The Australian tanker has previously transferred fuel [Vous devez être inscrit et connecté pour voir ce lien] and [Vous devez être inscrit et connecté pour voir ce lien] using its boom and to one aircraft at a time through its hose-and-drogue system, Airbus noted. "(B)oth refueling systems on the A330 MRTT have now been demonstrated through flight tests, confirming the aircraft's maturity in preparation for the startup of deliveries to international customers beginning in 2010."
The Australian tanker "is nearly identical in configuration" to the tanker a Northrop Grumman-EADS team is offering to the U.S. Air Force, Airbus noted. It said the first of the five tankers Australia has ordered will be delivered in mid-2010.

Changes to the source-selection plan for the U.S. Air Force’s $35-billion KC-X program are not likely to be substantial, and this could lead the procurement effort down a familiar path of contractors threatening not to bid or more calls for a split buy.
The senior Pentagon official overseeing the program says he is willing to address questions from the contractors, but he is sticking by the KC-X draft request for proposals (RFP). “It’s a crystal-clear draft RFP, and we’ll consider making changes to it on the basis of comments we receive,” says acquisition czar Ashton Carter. But “consider” is the operative word. “We’re going to try to preserve the attribute of clarity in the final RFP so that it’s clear to everyone next summer, when a contract is awarded, why it was awarded,” he says. The chances that some of the wholesale changes requested by both camps will be heeded are remote. But posturing on both sides continues, although it seems less likely to be as influential now as in the past.
A delay is the most obvious impact of the wrangling. The final RFP was due out this week. Last week, Carter stopped short of committing to a release date. Contractors suggest it could be out as late as January.
Carter says the Pentagon intends to entertain all of the questions prior to moving ahead with the formal competition. But he responded to one criticism of the September draft RFP made by the Northrop Grumman/EADS team by stating that the source selection is intentionally “much less subjective” than the one that governed the 2007-08 competition because of suggestions from the Government Accountability Office, which audited the process after Boeing protested its loss with a 767-based design. This prompted a termination of the $1.5-billion contract with Northrop Grumman/EADS.
Northrop Grumman officials have complained that the 373 pass/fail requirements outlined for qualification in the competition equally weigh less important items—such as water flow in sinks and toilets—with critical capabilities—such as fuel offload rates. The cost-shootout approach is also perceived as favoring the smaller tanker, presumably a Boeing 767-based solution (though Boeing has not announced a design).
Despite multiple failed attempts at leasing or buying a new refueler, Carter defends the current draft as a product of those experiences. “We do know very well what aircraft the war­fighter wants,” he says. “We have had a learning curve, and now we are able to be more specific” about requirements.
His statements come on the heels of opposing criticisms from lawmakers and the Northrop Grumman/EADS team. Carter and his Pentagon colleagues managing the contest are walking a familiar fine line. On one hand, conducting a competition remains a paramount concern ever since John McCain (R-Ariz.), the influential ranking member of the Senate Armed Services Committee, derailed an attempt in 2002 by the Air Force to lease 767 tankers from Boeing at a bloated cost. But competition can come from the only other maker of commercial widebodies, Airbus.
This leaves the Pentagon in the tough position of having to appease the companies enough to keep them interested. However, program officials must also manage the duel in such a way that the winner is clear and the source-selection cannot be nullified by another protest. “Key people in the Pentagon who worked on this [in the past] never quite understood this was their fault and a part of it was sloppy documentation,” says David Berteau, senior adviser at the Center for Strategic and International Studies (CSIS).
Carter acknowledges that complaints about the draft RFP from both sides were “destined.” Camps of both teams use the same verbiage to describe their various attempts to influence the final RFP. They say they are trying to “level the playing field,” though it is arguable that some of the complaints are designed to intentionally weight it in their favor.
McCain’s concerns about the recent KC-X competition were included in an Oct. 29 letter to Defense Secretary Robert Gates. His supporters say his worries are not intended to favor one team, but Boeing advocates say the senator remains skeptical about the company since his lease investigation. McCain’s current worries center around a lack of subjectivity in the source-selection process. He also questions how the last competition, including more than 800 requirements, was culled to 373 “threshold requirements.” And the senator wonders why the Pentagon’s method for determining ownership cost lacks some commonly used data in cost assessments. McCain questions why this process would “not favor mostly smaller airframes.”
Sixteen other lawmakers—all but one from districts standing to gain work if a Boeing 767 powered by Pratt & Whitney engines wins—held a press conference in November on Capitol Hill. The lawmakers, led by Sen. Sam Brownback (R-Kan.), demanded that the Defense Dept. alter the final RFP to include a penalty against the Northrop Grumman/EADS bid because of the interim ruling from the World Trade Organization (WTO) against the European Union for unfairly subsidizing Airbus commercial products. Rep. Jay Inslee (D-Wash.) proposes using the Commerce Dept.’s countervailing duty process, which would be used to calculate a per-unit penalty. Rep. Norm Dicks (D-Wash.) says it could be as high as $5 million per aircraft.
“Defense procurement must be consistent with our trade policies,” says Brownback. Moreover, Rep. Todd Tiahrt (R‑Kan.) says that if the Pentagon continues to be inconsistent with the U.S. Trade Representative’s approach, the case for continuing support for WTO crumbles. “If our request fails, and our requests are ignored once again by the Air Force, then I will file paperwork to withdraw from the WTO,” Tiahrt says. “If we are not going to use their judgments and we are not going to apply it, then we may as well withdraw from the whole organization.” This group of lawmakers, though vocal, lacks the influence of a relevant committee chairman or ranking member. Their cries may amount to little action.
One industry source warns that the U.S. would violate the WTO agreement if it proactively applied a penalty, referred to as “self-help,” before the dispute is resolved.
Though final rulings from the WTO do not often deviate from the interim findings, Carter maintains that applying a penalty in the KC-X source-selection would be premature. The U.S. Trade Representative’s office referred questions on the matter to the Pentagon.
Another industry observer who deals with Boeing on non-tanker business, agrees. “It would be awkward and inappropriate to penalize Northrop Grumman/EADS on something that is not final.”
The gripes from both camps raise questions about what is to come. Complaints in past competitions have been influential, and it remains to be seen whether this will be the case in the forthcoming duel.
During the last full competition in 2007-08, Northrop Grumman influenced, through a threat of not bidding, the final RFP. The Air Force added a fifth evaluation factor, the Integrated Fleet Air Refueling Assessment, that helped the company to win.
The Defense Dept. attempted another KC-X contest in the fall of 2008. Boeing threatened not to bid if the company was not given more time to craft a design, prompting Gates to halt the competition, calling for a “cooling-off” period.
The Pentagon is essentially hostage to its overarching need for a competition, according to CSIS’s Berteau. “The government will, it seems to me, have to do whatever it needs to do in order to sustain a competitive environment,” he says.
During both past attempts, lawmakers at various times pushed a split-buy in which both contractors would have at least some work. While this is an option for the Northrop Grumman team, Boeing appears to view this outcome as a defeat. But the split-buy option is sure to crop up again as a fallback plan if the final RFP riles one of the bidders. The Pentagon, however, firmly rejects this option.
Both bidders have a tarnished history in this saga. The EU is on the cusp of an adverse WTO ruling for subsidies to Airbus, and Boeing has the long and tainted history of its overpriced lease arrangement crafted in the aviation downturn following the 9/11 terrorist attacks.
However, the act of conducting a contest still appears to be paramount for the Pentagon. And, unfortunately, there will not be two squeaky-clean competitors. “There is no way to make this competition perfect,” says the industry observer. “But, if you want to run a competition, you have to run the competition you have, not the competition you want.”

Northrop [Vous devez être inscrit et connecté pour voir ce lien] has escalated its efforts to pressure Pentagon officials to make major changes to the criteria for evaluating bids for the KC-X tanker contract.
In a letter sent today to Undersecretary of Defense Ashton Carter, Northrop CEO Wes Bush threatens to withdraw from the competition against [Vous devez être inscrit et connecté pour voir ce lien] unless the Pentagon adopts his company’s recommended changes.
“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 programme,” Bush wrote.
Northrop’s concerns are focused on several evaluation metrics perceived as biasing the competition in favour of a “smaller aircraft with limited multirole capability”, Bush wrote.
In October, Northrop officials complained the competition was unfair. The US Air Force had decided to make the existing KC-135R tanker’s performance the benchmark for winning the contract. Northrop’s [Vous devez être inscrit et connecté pour voir ce lien]-based KC-45 tanker is larger than Boeing’s potential KC-767 platform.
Bush’s letter also criticizes a contract structure that “places contractual and financial burdens on the company that we simply cannot accept”.
The Pentagon has adopted a fixed-price structure for the contract, meaning the bidders must accept the financial risk of cost overruns. The evaluation is also tilted towards the lowest-price bidder, which Northrop previously complained will result in a “race to the bottom”.
“For all of the reasons we have provided, Northrop Grumman cannot proceed to submit a bid to the Department against the RFP as currently structured,” Bush wrote.
The Pentagon released the draft request for proposals in September, which proposed awarding the contract to the bidder who could meet 373 requirements at the lowest price.
According to Northrop’s letter, Carter’s office has rejected the company’s request to publish a dramatically revised version of the draft RFP. The Pentagon plans to proceed with issuing a final RFP later this month, which prompted Northrop’s warning letter.
For its part, Boeing has decided not to publicly comment on the evaluation criteria, although the company has submitted comments and proposed revisions privately to the [Vous devez être inscrit et connecté pour voir ce lien].
“We are focused on constructive engagement with our customer in order to offer an advanced tanker that meets their need,” a Boeing spokesman said.

Northrop Grumman pull out of the Air Force's aerial refueling [Vous devez être inscrit et connecté pour voir ce lien] competition unless the Pentagon changes its criteria, a company executive wrote Tuesday.
"(A)bsent a responsive set of changes ... Northrop Grumman has determined that it cannot submit a bid" for the tanker, Wes Bush, Northrop's president and chief operating officer, wrote in a letter to Ashton Carter, the Pentagon's acquisitions chief, according to a copy obtained by [Vous devez être inscrit et connecté pour voir ce lien].
Northrop spokesman Randy Belote confirmed that Bush sent such a letter Tuesday.
"Northrop Grumman sent a letter to Mr. Carter informing the Defense Department that it would not submit a tanker proposal unless significant changes were made to the draft RFP," he said. "We have been very clear, I think, in our communications with the Air Force that we've had significant concerns with the draft RFP, and recent communications from the Air Force basically have indicated that our concerns were not being addressed."
In response to the letter, the Department of Defense issued a statement saying: "The Department regrets that Northrop-Grumman and Airbus have taken themselves out of the tanker competition and hope they will return when the final RFP is issued."
Boeing tanker spokesman Bill Barksdale said: "We are focused on constructive engagement with our customer in order to offer an advanced tanker that meets their need."
Northrop Grumman officials sponsored a news conference ([Vous devez être inscrit et connecté pour voir ce lien]) in October to complain that the draft request to replace the Air Force's Eisenhower-era KC-135 tankers favors rival Boeing's smaller 767-based tanker over the Northrop-EADS team's Airbus A330-based aircraft. That's because the request it would award the contract to the lowest-priced plane that meets a set of mandatory criteria, after adjusting for certain factors, rather than looking at the best balance of price and capabilities.
"We're convinced that the draft RFP prefers a smaller tanker aircraft with less multi-role capability, placing our tanker at a disadvantage," Belote said Tuesday. "Second, the draft RFP places financial and contractual burdens on the company that we simply cannot accept."
Some have argued that the government shouldn't buy a bigger, more expensive plane, better value or not, if it doesn't really need more size. In fact, a separate contract will replace the Air Force's larger KC-10 tankers.
Responding to that argument, Belote noted that the Air Force previously awarded the initial tanker contract to Northrop Grumman last year in large part because it had a bigger plane. The Pentagon threw out that award after congressional auditors found serious flaws in the process.
"What changed in a year and a half?" Belote asked.
As for the financial and contractual issues, Mitch Waldman, Northrop Grumman's vice president for business development, said in October that the proposed 18-year fixed-price contract structure was unreasonable, given continuing risks from development and changes over the course of building the initial aircraft.
Defense analyst Loren Thompson, of the Virginia-based Lexington Institute, [Vous devez être inscrit et connecté pour voir ce lien] that Boeing officials also are concerned about the fixed-price provisions, and the amount of risk that put onto the bidders.
"To ask people to bid fixed prices on things that may not materialize until 18 years in the future is simply absurd," he said in the story.
Bush's new letter follows a Nov. 4 letter in which he said Northrop may not be able to bid without meaningful changes to the criteria and recommended that the Pentagon put out a second draft request for proposals.
In the previous competition, Pentagon officials adjusted criteria in order to keep Northrop Grumman from dropping out of the competition. Bush noted the government's desire to have more than one bidder, writing: "we are aware of how important it is to the credibility of the ultimate KC-X tanker award that it be arrived at competitively."
The Pentagon's response to Bush's letter appeared to preclude changes to keep Northrop in the bidding.
"The Department wants competition but cannot compel the two airplane makers to compete," the statement said. "Both offerors have suggested changes to the RFP that would favor their offering. But the Department cannot and will not change the warfighter requirements for the tanker to give advantage to either competitor. The Department has played this right down the middle and will continue to do so."
The Pentagon said it is still reviewing comments and questions about the draft request for proposals and will probably release a final request in January.
One problem in trying to set up a fair competition is that the Air Force's requirements were virtually certain to favor one of the two tankers, because they're very different aircraft.
"You either decide that you want just a tanker or you decide that you want a highly capable multi-role tanker transport," Seattle-based analyst Scott Hamilton said Tuesday. Boeing's plane is the "just a tanker" option.
As for Barksdale's "what's changed" question, one answer is that there's a Democrat in the White House. Boeing has more of a Democratic constituency than Northrop, whose tanker would be assembled in Republican-heavy Alabama.
Responding to Northrop's letter, U.S. Sen. Patty Murray, D-Wash. -- who chairs the Senate's Appropriations Defense Subcommittee -- said in a statement that the "Airbus" was attempting to tilt the competition in its favor.
"This is a new competition, but the players are the same and Airbus is up to its same old tricks," she said. "When the last draft Request for Proposal was released, Airbus threatened to drop out unless the requirements were tilted in its favor and they are using the same tactics this time around. The end result was a bad deal for our warfighters, our taxpayers, and yet another delay in getting a new tanker into the hands of our military.
"It's time to move forward with a fair and transparent competition based on the needs of our military, not the bullying of an illegally subsidized foreign competitor who has made no secret of its attempts to undermine the American aerospace industry and the jobs it supports."

WASHINGTON, 1er décembre (Reuters) - Northrop Grumann a annoncé mardi qu'il ne participerait pas à un appel d'offres de 50 milliards de dollars portant sur le renouvellement des avions ravitailleurs de l'armée américaine, un contrat pour lequel il s'était associé avec EADS .
Le groupe de défense américain a estimé que les exigences techniques du contrat favorisaient Boeing et a demandé à ce qu'ils soient changés.
Le Pentagone a dit regretter la décision de Northrop et d'EADS, tout en ajoutant qu'il ne modifierait pas ces exigences pour ne pas favoriser l'un ou l'autre candidat.
"Le département de la Défense a été équilibré jusqu'au bout", a déclaré Bryan Whitman, porte-parole du Pentagone, soulignant que Boeing et Northrop avaient tous deux préconisé des changements susceptibles de favoriser leurs offres respectives.
"Le département ne changera pas les exigences militaires pour les ravitailleurs pour avantager l'un ou l'autre candidat. Le département souhaite qu'il y ait une compétition mais ne peut forcer les deux constructeurs aéronautiques à prendre part à l'appel d'offres."
Bryan Whitman a ajouté que le Pentagone publiera vraisemblablement ses exigences définitives pour le contrat en janvier.
Le P-DG de Northrop Grumann, Wes Bush, a écrit dans une lettre adressée à Ashton Carter, sous-secrétaire à la Défense chargé des achats, de la technologie et de la logistique, datée du 1er décembre, que le groupe s'inquiétait du fait que les termes actuels du contrat favorisaient un appareil plus petit que le ravitailleur basé sur l'A330 qu'il avait proposé lors d'un précédent appel d'offres.
L'an dernier, l'attribution du contrat, estimé à l'époque à 35 milliards de dollars (23,65 milliards d'euros) à Northrop et EADS, avait été annulée après un recours de Boeing, les autorités de contrôle ayant jugé la procédure "trop subjective".
Le département de la Défense a dit espérer que Northrop Grumann et EADS changerait d'avis une fois que les termes définitifs du contrat auront été annoncés.

Northrop Grumman a fait savoir mardi qu'il ne participerait plus à l'appel d'offres d'avions ravitailleurs pour l'US Air Force, en l'absence de toute modification sensible de certaines de ses modalités qui, pense-t-il, favorisent indûment son concurrent Boeing .

Le Pentagone a fait savoir qu'il déplorait la décision de Northrop et de son associé EADS mais a ajouté qu'il ne changerait rien au cahier des charges qui puisse donner un avantage quelconque à l'un ou l'autre des compétiteurs.
"Le département (de la Défense) a joué franc jeu", a dit le porte-parole Bryan Whitman, observant que Boeing et Northrop avaient tous deux proposé des changements qui servaient leurs intérêts respectifs.
"Le département ne peut en aucun cas modifier le cahier des charges du tanker pour avantager l'un ou l'autre des postulants", a-t-il déclaré. "Le département veut de la concurrence mais ne peut pas obliger les deux constructeurs à participer."
Bryan Whitman a précisé que les modalités définitives du cahier des charges de ce marché, évalué à présent à 50 milliards de dollars, seraient rendues publiques une fois achevé l'examen des questions et commentaires, sans doute en janvier.
Le directeur général adjoint de Northrop, Wes Bush, a fait savoir à Ashton Carter, responsable des marchés publics du Pentagone, qu'il ne soumettrait plus d'offre à moins que la Défense ne modifie complètement certaines conditions du contrat.
Dans un courrier daté du 1er décembre, Wes Bush explique que Northrop est préoccupé par le fait que le nouveau cahier des charges évoque un appareil plus petit que le modèle basé sur l'Airbus A330 présenté par lui-même et EADS, la société mère d'Airbus. Il ajoute qu'il impose en outre "un fardeau contractuel et financier sur la société qu'elle ne peut tout simplement pas accepter".
Wes Bush précise que le Pentagone a fait savoir à Northrop qu'il ne comptait pas soumettre un deuxième projet de cahier des charges et il estime que ses réponses aux questions de Northrop ne semblent pas pertinentes.
"En conséquence, j'ai le regret de vous informer qu'en l'absence de toute modification raisonnée du cahier des charges définitif, Northrop Grumman conclut qu'il ne peut soumettre d'offre au département pour le programme KC-X", explique Wes Bush.
Le Pentagone a dit qu'il regrettait cette décision, espérant voir Northrop et EADS revenir une fois le cahier des charges définitif publié.
Northrop et EADS avaient remporté ce contrat de 179 avions ravitailleurs, alors évalué à $35 milliards, en février 2008 mais le marché avait été annulé sur plainte de Boeing.
Boeing lui-même s'était vu retirer ce contrat par le Congrès en 2004, à la suite d'un scandale impliquant des responsables de l'US Air Force.

UNE "FARCE"
Loren Thompson, analyste du Lexington Institute, observe que Boeing n'est pas lui non plus particulièrement à l'aise avec une clause qui impose un prix fixe au contrat de développement.
"Exiger un prix fixe pour quelque chose qui risque de ne pas se concrétiser avant 18 ans est tout simplement absurde", affirme-t-elle.
Des professionnels du secteur reprochent également au Pentagone d'avoir établi 373 clauses irrévocables, soit dix fois plus que lors du précédent appel d'offres, sans avoir établi la moindre hiérarchie entre ce qu'elles recouvrent.
Guy Hicks, porte-parole d'EADS, a dit que la société soutenait totalement la décision de Northrop de se retirer de la course si rien n'était changé.
Boeing, qui propose un ravitailleur basé sur son 767, dit qu'il poursuit des discussions constructives avec le Pentagone. Le sénateur républicain Richard Shelby, qui avait lui-même critiqué les règles imposées par le Pentagone le mois dernier, estime que cet appel d'offres est une "farce". "Si l'Air Force veut réellement de la concurrence, de celle qui aboutisse au meilleur avion qui soit pour les opérations de combat, elle doit modifier le cadre actuel de fond en comble", dit Richard Shelby.
Au contraire, pour le sénateur démocrate Patty Murray, dont l'Etat de Washington abrite d'importants sites Boeing, la menace de retrait que laissent planer Northrop et Airbus est convenue.
Northrop avait pareillement menacé de se retirer du précédent appel d'offres, ce qui avait poussé des parlementaires républicains, au rang desquels John McCain, l'adversaire de Barack Obama aux dernières présidentielles, à intervenir.
Mais l'histoire risque de ne pas se répéter car les soutiens de Northrop, républicains, n'ont plus la majorité au Congrès, constate l'analyste Loren Thompson.
L'action Northrop a clôturé en hausse de 0,8% mardi et celle de Boeing a pris 2,5%.

Air Force's aerial refueling [Vous devez être inscrit et connecté pour voir ce lien] purchase process must be a competition, the House of Representatives' lead defense appropriator said Wednesday.

"There must be competition" for the tanker, U.S. Rep. John Murtha, chairman of the House Defense Appropriations Subcommittee, said, according to a DoDBuzz [Vous devez être inscrit et connecté pour voir ce lien].
Murtha was reacting to Northrop Grumman's [Vous devez être inscrit et connecté pour voir ce lien] that it would not bid for the tanker contract unless the Air Force changed its request for proposals, because it believes the current request favors rival Boeing's smaller, cheaper aircraft.
Murtha did not reject the possibility that Congress might step in, but said he wanted to talk with Ashton Carter, the Pentagon's acquisitions chief, before elaborating on the issue, according to DoDBuzz. Murtha has previously supported splitting the contract between Boeing and Northrop Grumman.
Leeham News and Comment's Scott Hamilton [Vous devez être inscrit et connecté pour voir ce lien] Murtha's comments are just the beginning.
"We fully expect an effort on the part of some members of Congress to renew the effort for a split buy," Hamilton wrote. "As we have written many times before, we can think of many strategic reasons this makes sense, let alone the political solution."

The Air Force's draft request for proposals for new aerial refueling [Vous devez être inscrit et connecté pour voir ce lien] is even-handed and the Pentagon wants competition to continue in the bid process, Defense Secretary Robert Gates said Wednesday.
Gates was reacting to Northrop Grumman's [Vous devez être inscrit et connecté pour voir ce lien] that it would not bid for the tanker contract unless the Air Force changed its request for proposals, because it believes the current request favors rival Boeing's smaller, cheaper aircraft. A Northrop-EADS tanker won the contract last year, in large part because of its size, but the Pentagon threw out that award after congressional auditors found serious flaws in that process.
Republican Sen. Jeff Sessions, of Alabama, where Northrop-EADS team would assemble its tanker, asked Gates about the issue in committee Wednesday, saying: "A number of serious changes were made in the RFP, each one of those tilted against a transformational aircraft, tilted against a larger aircraft, an aircraft that could provide more cargo capacity and other capabilities."
Gates said: "We promised a fair and highly transparent process. We believe that the RFP is even handed.
"If we were totally locked in to not changing anything we wouldn't have gone through the comment period. We believe that both of the principal competitors are highly qualified and we would like to see competition continue in this process."
Meanwhile, Northrop Grumman Chief Financial Officer Jim Palmer fended off tanker questions Wednesday morning at the Credit Suisse First Boston 2009 Aerospace & Defense Conference, the DEW Line [Vous devez être inscrit et connecté pour voir ce lien].
The closest Palmer came to news was in responding to a question about how a tanker request could not favor one of the aircraft, given that they offer very different options.

"I don't know. In a way, unlike any other development program, where you essentially are designing from scratch, here we have a program that is based on an existing platform, so to some extent those existing platforms have an impact or govern what you can do with those platforms. So, to a certain extent, yes, it is governed by what you can do with those platforms."

Northrop Grumman CFO Jim Palmer desperately tried to avoid making news on the KC-X program while appearing this morning in New York at the Credit Suisse First Boston 2009 Aerospace & Defense Conference. Palmer mostly succeeded.

Asked to explain the strategy behind CEO Wes Bush's letter yesterday to the Pentagon, Palmer parried.

"I think first of all we don't intend to negotiate here in public ... We did issue a letter to DOD yesterday that outlined our concerns. They are well aware of those issues. I don't want to comment too much more than what has already been in the press. We will have to wait until the final RFP to make a final decision. Based on where we are today, if there are not any changes it is our conclusion that we can not compete for this program."

But Palmer's Wall Street audience didn't so easily let him off the hook. Northrop's letter took issue with the DOD's plan to make KC-X a firm fixed price contract. So, Palmer's questioner asked, could KC-X be DOD's attempt to adopt a new paradigm for acquisition policy, and could Northrop's rejection be construed as an industry-wide rejection of that policy? Palmer:

"I think you have to ask that question to someone else. I don't know. I can't speak for anyone else. I can only speak for Northrop Grumman."

Still undaunted, a third tanker interlocutor asked how the US Air Force could write requirements that don't favor either one or the other competitor, since both bidders are stuck with offering only existing platforms? Palmer seemed to want to dodge the question initially, but concluded by conceding the point.

"I don't know. In a way, unlike any other development program, where you essentially are desinging from scratch, here we have a program that is based on an existing platform, so to some extent those existing platforms have an impact or govern what you can do with those platforms. So, to a certain extent, yes, it is governed by what you can do with those platforms."

Boeing has raised concerns about the Air Force's draft aerial refueling [Vous devez être inscrit et connecté pour voir ce lien] request for proposals, but is not questioning the service's war-fighting requirements and will not commit to a 767- or 777-based tanker until the request is finalized, the company's defense chief said Thursday.
"The customer has set up a clear process for providing comments," [Vous devez être inscrit et connecté pour voir ce lien], who took over in September as president and chief executive of Boeing Integrated Defense Systems, said at the 2009 Credit Suisse Aerospace & Defense Conference Thursday morning. "We've elected to work within that process. We think we're having a very constructive dialogue.
"We have raised some concerns," Muilenburg said during the webcast talk. "Most of our questions have been about how the evaluation will be done as opposed to questioning the war-fighting requirements."
Muilenburg was clearly contrasting Boeing's stance to that of competitor Northrop Grumman, which has very publicly questioned the draft request's approach of awarding the contract to the cheapest plane that meets 373 basic requirements, rather than the best balance of cost and capabilities. Northrop executives [Vous devez être inscrit et connecté pour voir ce lien] that the company would not bid without changes to the request, because it favors Boeing's smaller, cheaper 767-based offering.
Boeing hasn't actually said yet whether it will offer a tanker based on the 767 or the larger 777.
The current request "would push us toward a (7)67-based platform," Muilenburg said. But, he said, Boeing will keep its options open until the Air Force finalizes the requirements.
One issue Boeing has raised -- and its congressional allies have very publicly raised -- is the Pentagon's decision not to account in the request for a recent World Trade Organization interim ruling that European governments illegally subsidized Airbus, whose A330 is the basis for the Northrop tanker.
"That is an issue that we've raised, and we believe it's relevant to the tanker competition," Muilenburg said.
Boeing officials have also argued that the request's 40-year fuel price escalation rates are too low, he said.
While Muilenburg talked tanker in response to audience questions, he didn't mention it during his prepared remarks. Instead, he talked more generally about how Boeing plans "to continue to work toward being a double-digit-margin business," despite domestic defense budget pressure on its core defense programs.
"(O)ver the next five to 10 years we need to actively reposition our business to continue to grow," he said. "Although we see top-line budget pressure, we have offsetting opportunities that will allow us to cont to grow the business."
Specifically, Boeing is doing more in services, which account for about one-quarter of IDS' business this year, and unmanned systems, cyber-security and energy, while cutting costs, increasing efficiency and looking more outside the U.S., Muilenburg said.
"This year international will be about 15 percent of our revenue," he said. "We anticipate that in five years the international segment will be about 20 to 25 percent of our revenue."
Boeing sees strong demand for its rotorcraft and satellite products and is making progress in directed energy (laser) systems, Muilenburg said.
In addition to budget pressure, the U.S. government is also moving more toward fixed-price contracts that put more risk on contractors, he noted. That's been a concern that both Northrop and, less publicly, Boeing have raised in the tanker contest.
In other countries, IDS is helping build indigenous aerospace capacity in cooperation with Boeing Commercial Airplanes, Muilenburg said. [Vous devez être inscrit et connecté pour voir ce lien], who took over Boeing Commercial Airplanes in September, is Muilenburg's predecessor at IDS.
In space, Boeing is well positioned if NASA continues along its current [Vous devez être inscrit et connecté pour voir ce lien] track and will continue to compete if it moves in a different direction, Muilenburg said. The company also sees additional need for satellites, he said.
Asked about the Airborne Laser program for the Defense Department, Muilenburg acknowledged that "some funding challenges" that have affected the program's schedule, but said: "(W)e continue to make significant progress on technical milestones."
"We are going through major ground-test activities right now that are progressing very well," he said, adding that the company expects a successful shoot-down test between this month and February, depending on target availability, funding and completion of technical milestones.
"That technology, we believe, has strong opportunities for the future," he said.
In the energy arena, Boeing is translating its defense expertise into work on smart grids, Muilenburg said. "The smart-grid marketplace is measured in tens of billions of dollars."

The Pentagon's draft aerial refueling [Vous devez être inscrit et connecté pour voir ce lien] request for proposals is the result of a process "in which politics trumps national security and open competition," The (Mobile, Ala.) The Press-Register editorial board [Vous devez être inscrit et connecté pour voir ce lien] Thursday.
The paper was responding to Northrop Grumman's [Vous devez être inscrit et connecté pour voir ce lien] on Tuesday that the company would not bid on the tanker contract without changes to the request, because it favors Boeing's smaller, cheaper 767-based offering.
The Northrop Grumman-EADS team would assemble its Airbus A330-based tanker in Mobile. The Air Force awarded the contract to that team last year, in large part thanks to its plane's size, but the Pentagon threw out that result after congressional auditors found serious flaws in the process, including changes to the bid criteria.
"Whatever happens, let no one forget that the Northrop Grumman-EADS tanker was the one the Air Force wanted," The Press-Register wrote. "If Northrop Grumman pulls out now, Mobile loses a terrific opportunity to expand the local economy to the benefit of the entire state.
"But the men and women of the Air Force lose more. By default, they'll get a tanker from Boeing that their own top brass thought was second best."
The paper accused Washington's "powerful congressional delegation" of influencing the new request.
In a flight of hyperbole, the paper noted that Northrop issued its threat to withdraw from the contest the same day President Obama announced his plan for a troop surge in Afghanistan.
"If the president means what he says about giving those soldiers the resources to finish what this country started in Afghanistan after 9/11, he'll do what's necessary to give the Air Force the best tanker," the editorial board wrote.
To suggest Boeing is thwarting the will of our soldiers is a bit much, I think. Politics has been part of this process from the beginning, on both sides.
Even if the editorial board is right that Air Force brass really prefers the Northrop-EADS tanker, that doesn't mean taxpayers should buy the pricier plane. If the Air Force doesn't really need the extra capabilities in a tanker, why should we pay more?
I'm not saying the Air Force doesn't need those extra capabilities. I'm no expert, after all. But the logic of the draft request for proposals seems to be that such extras aren't worth paying a premium of more than 1 percent.
And that's been the Pentagon's problem with the tanker competition from the beginning. The Press-Register talks about rewriting the request "to give both sides a chance for fair competition on a level playing field," but once the Air Force decides whether it really needs just a tanker or a larger Multi Role Tanker Transport (EADS' term), it has basically decided which plane will win.
That leaves The Press-Register's preferred option -- a split contract.
"Splitting the contract would cost taxpayers more money in terms of maintaining two different types of tankers and training two different sets of Air Force personnel to operate them. But it would get the tankers in the air sooner, saving on increasing maintenance costs for the existing fleet," the paper writes. "And it is the best way to resolve the political impasse that involves Congress, two major defense contractors and American communities served by both bidders that have so much at stake."
Splitting the contrast would make military sense if the Air Force decided it a bunch of "just a tankers" but could use some "Multi Role Tanker Transports." Boeing would argue it should have the chance to offer a 777-based tanker to fill the Multi Role Tanker Transport niche, but that's a heavier tanker that exists only on paper at this point.
Absent that military reason, however, splitting the contract would be putting politics ahead of the real needs of the Air Force and taxpayers.
On a related note, analyst Scott Hamilton [Vous devez être inscrit et connecté pour voir ce lien] that, for Boeing, keeping Northrop-EADS from winning the tanker bidding is more about preventing an Alabama plant that could churn out A330 commercial aircraft at lower cost than it is about one military contract

By U.S. REP. JO BONNERSpecial to the Press-Register

About six weeks after President Obama took office, his administration issued a broad, sweeping memorandum to all senior executive branch officials instructing them against sole-source, non-competitive government contracts.
The thought behind this memo was simple: A sole-source contract — those which are awarded without competing bidders — creates, in the president's own words, "a risk that taxpayer funds will be spent on contracts that are wasteful, inefficient and subject to misuse."
Ironically, given the Defense Department's most recent, bungled efforts to restart the competition for the KC-X aerial refueling tanker, one is left to wonder whether the Pentagon somehow misplaced its copy of this White House directive.
be fair to the Obama administration, it inherited from the previous administration what was already a rather dysfunctional acquisition process to replace the 50-year-old KC-135 refueling tankers.
But unlike other Cabinet secretaries reporting to work in the early days of the new administration, Defense Secretary Robert Gates didn't need a tutorial on how to find the bathrooms over at the Pentagon. In fact, it was under Bob Gates' first tour of duty as defense secretary that this latest effort to replace the tankers fell apart.
For that reason and others, it is now up to the current administration — starting with Secretary Gates — to offer a satisfactory resolution to this problem.
Regretfully, the path upon which the Defense Department is currently traveling is all but guaranteeing a sole-source contract — in other words, a blank check to Boeing signed by the American taxpayers.
When Northrop Grumman announced last Tuesday that it will not participate in the current tanker competition if the draft Request for Proposal (RFP) is not restructured, some in Washington questioned whether the defense giant was bluffing.
Let me be clear. It was not.
And the reason Northrop Grumman, and its partner EADS, was not playing a game of chicken is because the draft RFP, released by the Air Force in September, has been all but written to guarantee the pre-selection of the smaller, older and much less capable Boeing 767.

Boeing has a plan in place to meet the Pentagon’s refueling boom requirements for the KC-X aerial tanker competition, according to the company’s defense sector chief.
The Pentagon’s draft request for proposals (RFP) “drives us toward a 767-based platform” for the company’s KC-X proposal, said Dennis Muilenburg, chief executive officer of Boeing Integrated Defense Systems, during an interview last week at the Credit Suisse/Aviation Week Aerospace and Defense Finance conference here.
The company has been widely expected to propose a 767-based tanker, but has not formally announced its selection. Muilenburg’s comments are the closest the company has come in public to committing to a platform.
A challenge for Boeing is addressing the Pentagon’s 1,200 gallon-per-minute (GMP) offload rate from the refueling boom. This need is based on the demands of the C-5, which is the Air Force’s largest cargo hauler. EADS says the Multirole Tanker Transport designed for Australia and its baseline model for the KC-X competition can meet the requirement. However, the Northrop Grumman/EADS North America team has threatened to walk away from the competition without some changes to the Air Force draft RFP that take into account the attributes of a larger, A330-based design.
Boeing’s fifth-generation refueling boom developed for Japan can offload 900 gallons per minute, according to company officials. So, development work would be required to improve its performance for the USAF competition.
“We have been doing some independent work on the boom,” Muilenburg says. “The flow rate on this boom is a higher flow rate than what we have on the current 767 tankers that we have delivered to Japan. But we have come up with a way to meet the requirement.”
The draft RFP for KC-X released in September says the development work will take place under a fixed-price development contract, a point of contention for both Boeing and Northrop Grumman/EADS North America. Both manufacturers worry about taking on too much risk if they win the duel, and Boeing’s boom development is one of the areas in question.
Muilenburg says Boeing has “resolved” the issue of the boom development, but he declined to offer comments on how. He also did not say whether it would require significant USAF funding to mature for the Air Force program.
A final request for proposals is expected in January.