Defense Secretary Robert Gates, clearly wor­ried that the atmos­phere is so poi­soned by the bat­tle between Boeing and Northrop and tainted by the poor per­for­mance of the Air Force, has decided to punt and leave any tanker RFP to the next administration.

Rather than hand the next Administration an incom­plete and pos­si­bly con­tested process, Secretary Gates decided that the best course of action is to pro­vide the next Administration with full flex­i­bil­ity regard­ing the require­ments, eval­u­a­tion cri­te­ria and the appro­pri­ate allo­ca­tion of defense bud­get to this mis­sion, the Pentagon release said this morning..

The release quoted Gates, say­ing that It is my judg­ment that in the time remain­ing to us, we can no longer com­plete a com­pe­ti­tion that would be viewed as fair and objec­tive in this highly charged envi­ron­ment. The result­ing cool­ing off period will allow the next Administration to review objec­tively the mil­i­tary require­ments and craft a new acqui­si­tion strat­egy for the KC-​​X.

The first con­gres­sional reac­tion was pos­i­tive, from one of the Capitols most impor­tant money men. I believe that Secretary Gates made the right deci­sion in pro­vid­ing the next Administration with the oppor­tu­nity to review the require­ments and pro­ceed with a new solic­i­ta­tion. Our com­mit­tee advised the Defense Department to ensure that there was enough time for legit­i­mate com­pe­ti­tion. This deci­sion will allow for that, Rep. John Murtha (D-​​Penn.) said in a state­ment. He sig­nalled pretty clearly that the House Appropriations defense sub­com­mit­tee would come up with what­ever money might be needed to keep the tankers fly­ing. Now our job will be to work with the Department to make cer­tain that our cur­rent tankers, that are over 40 years old, will be reha­bil­i­tated to ensure we have tankers avail­able for world-​​wide Air Force mis­sions, he added.

Read the rest of this story and more updates from DoD Buzz.

– Colin

For those who won­der just how wor­ried the Pentagon is about stum­bling into or some­how spark­ing a sec­ond protest in the tanker wars, heres a baseline.

John Young, under­sec­re­tary of Defense for acqui­si­tion, tech­nol­ogy and logis­tics, issued a July 31 memo requir­ing that all com­mu­ni­ca­tions out­side of the Defense Department be approved by the Pentagons gen­eral coun­sels office and by Shad Assay, direc­tor of defense pro­cure­ment, acqui­si­tion pol­icy and strate­gic sourcing.

This means that any­one who wants to talk to the press or to indus­try must first get Air Force clear­ance and then get OSD clear­ance, includ­ing the depart­ments top lawyers. The source who pro­vided the memo described it as a gag order. That may be a lit­tle strong but is con­veys pretty clearly just how con­cerned the Pentagons senior lead­er­ship is with shap­ing and con­trol­ling the mes­sages it sends as it con­ducts the tanker rebid. In effect, this is pretty close to a gag order given that no lawyer is likely to approve any state­ment to any­one unless its either utterly innocu­ous or there is very good rea­son for the depart­ment to say some­thing. After all, $35 bil­lion is a fair amount of change and the depart­ments han­dling of the tanker deal has been remark­ably inept over the years.

[Editor: Loren Thompson must be sob­bing right now…]

– Colin Clark

Click HERE for the new, amended RFP for the KC-​​X tanker.

(Gouge: CC)

– Christian

We’re cov­er­ing the Pentagon presser today at 3pm on the new tanker RFP. Here’s a bit of what Colin has reported over at DoD Buzz.

A few items of inter­est, for per­spec­tive. for­mer Air Force Secretary Mike Wynne and I spoke recently about the options the Pentagon has. They are very few if John Young, under­sec­re­tary of defense for acqui­si­tion, tech­nol­ogy and logis­tics, stuck with what he said he would stick with. First, the require­ments would not change. So the Northrop Grumman team would seem to come out ahead on this score since all the OSD and Air Force per­son­nel who have talked about this agree that Northrop does the best job over­all of meet­ing or exceed­ing the requirements..

Second, Wynne agreed that since Young made clear a dual buy would just be too expen­sive that also tips things in Northrops favor. Young said sev­eral times after the GAO rul­ing that buy­ing tankers from both com­pa­nies would add sub­stan­tial costs, costs the Pentagon was not will­ing to shoulder.

Still, Wynne pro­fessed to like the idea of a dual buy. But I think thats because he believes Boeing couldnt get enough planes in the air and cer­ti­fied quickly enough and believes it would, in the long run, just strengthen Northrops position.

Finally, while it may not be fac­tual, the swag­ger of senior EADS per­son­nel before and dur­ing the Farnborough Air Show was pal­pa­ble. They have lit­tle doubt they will not lose to Boeing, amended RFP or not. Boeing per­son­nel, on the other hand, were clearly on the defen­sive dur­ing Farnborough. More after the brief­ing.

We did just receive a note from the office of Rep. Norm Dicks who’s already cry­ing foul about the new RFP…

Note that there is an obvi­ous change inserted into the System Requirements Document in the revised tanker RFP that clearly favors the larger air­craft even though it is not nec­es­sar­ily con­nected to any real-​​world use of tanker. The orig­i­nal RFP said no extra credit beyond thresh­old require­ment, which both planes had met and exceeded in the first com­pe­ti­tion. New RFP says there is value in exceed­ing. Is this a com­pe­ti­tion for a KC-​​10 replace­ment or a KC-​​135 replace­ment?

So, the Air Force shouldn’t get what it wants, right Mr. Dicks? Seems to me if they’re ask­ing for more fuel capa­bil­ity then they should be able to buy the tanker that gives it to them. Boeing asked for this rebid, they’ve got­ten it, and now its back­ers are already com­plain­ing that it’s unfair?

Is there any­one out there that believes this will be a “fair” process anymore?

Stay tuned here, to DoD Buzz and to Military​.com for fur­ther updates.

– Christian

This arti­cle first appeared in Aerospace Daily & Defense Report.

House defense appro­pri­a­tors have directed the U.S. Air Force to con­sider “indus­trial base con­cerns” in its next eval­u­a­tion of a replace­ment air refu­el­ing tanker. 

The direc­tive was con­tained in the $487.7 bil­lion fis­cal 2009 defense appro­pri­a­tions bill approved July 30 by the House Appropriations Committee’s defense subcommittee. 

Fully funds tanker pro­gram

The mea­sure, which is not expected to make it to the House floor before the sum­mer recess that begins Aug. 4, is $4 bil­lion below President Bush’s bud­get request and $28.4 bil­lion above the fis­cal 2008 defense spend­ing mea­sure enacted. 

The bill, which must clear the full Appropriations Committee before con­sid­er­a­tion by the full House, fully funds the tanker pro­gram at $893 mil­lion. Lawmakers also directed USAF to com­ply with find­ings by the Government Accountability Office (GAO), which sus­tained Boeing’s protest of the deci­sion to award a $35 bil­lion con­tract to a team headed by Northrop Grumman and Airbus par­ent EADS. 

Boeing sup­port­ers and Buy America advo­cates in Congress com­plained that the Air Force failed to take U.S. indus­trial base issues into con­sid­er­a­tion when it picked the Northrop Grumman-​​EADS offer­ing. Air Force offi­cials insisted the law did not require them to do so. 

Redistributes F-​​35 funds

(more…)

Rep. Norm Dicks (D-​​Wash.) and the panoply of Boeing sup­port­ers must have been whoop­ing it up as they read the upbeat news sto­ries about lan­guage inserted into the 2009 defense spend­ing bill to give Boeing a bet­ter chance of win­ning the tanker contract.

[Photo: Boeing/​Defense Tech]

I checked with some staff and a few other sources on the Hill and the early gouge is this: the Senate is unlikely to sup­port lan­guage redraw­ing the rules of the com­pe­ti­tion or doing any­thing like a split buy that would prob­a­bly lead to a sub­stan­tial cost increase.

One knowl­edge­able source pointed out that the tankers back-​​stop sup­port­ers in the Senate were to be Sens. Daniel Inouye (D-​​Hawaii) and Ted Stevens (R-​​Ala.). Stevens has dropped his posi­tion as rank­ing mem­ber of the Senate Appropriations defense sub­com­mit­tee until his seven charges are set­tled one way or another, in com­pli­ance with Senate Republican Conference rules. And I under­stand Inouye, chair­man of the defense sub­com­mit­tee, has indi­cated he would pre­fer to stay out of this fight. Also, Sen. Richard Shelby (R-​​Ala.), a mem­ber of the defense sub­com­mit­tee, would fight tooth and claw to keep any such lan­guage out of the Senate bill. Should such lan­guage get in some­how, Sens. John Warner (R-​​Va.) and John McCain (R-​​Ariz.) are likely to oppose it as the bill moves to the Senate floor.

Of course, the aver­age tax­payer would never know about the tanker lan­guage in the bill. Rep. John Murtha (D-​​Penn.), chair­man of the House Appropriations defense sub­com­mit­tee, issued a press release yes­ter­day sim­ply stat­ing that the bill:

Provides full fund­ing ($893 mil­lion) for the aer­ial refu­el­ing tanker pro­gram. The Committee directs the DoD to com­ply with the GAO find­ings con­cern­ing the tanker award protest, and directs that indus­trial base con­cerns be included in the eval­u­a­tion of the tanker con­tract award.

Read the rest of this story and the actual lan­guage of the Senate bill over at DoD Buzz.

– Colin Clark

Colin still on the case…

That rasp­ing sound you hear is the cumu­la­tive grind­ing of teeth from Boeing and its sup­port­ers in the wake of yes­ter­days announce­ment of a rebid on the tanker contract. 

They are wor­ried and we all know we grind our teeth when were wor­ried because the Pentagons basic cri­te­ria for the plane appar­ently will not change when the new request for pro­posal is issued. The clear­est expres­sion of Boeings unhap­pi­ness came late yes­ter­day from that bell­wether of Boeing sen­ti­ment, Rep. Norm Dicks (D-​​Wash.), who has and will fight relent­lessly for the com­pany to get at least some part of the KC-​​X tanker money. 

The press release Dicks put out yes­ter­day said he “has seri­ous doubts about the abil­ity of the Defense Department to con­duct a renewed com­pe­ti­tion that is fair and open and that meets the ‘real world’ require­ments of refu­el­ing U.S. mil­i­tary aircraft.”

(more…)

FYI:

Boeing Co. and Northrop Grumman Corp. will sub­mit new offers for a dis­puted $35 bil­lion Air Force tanker con­tract, and the Pentagon will pick a win­ner by the end of the year.

Defense Secretary Robert Gates said Wednesday that his office — not the Air Force — will over­see the com­pe­ti­tion between Boeing and the team of Northrop and Airbus par­ent European Aeronautic Defence and Space Co.

The plan, which hands con­trol to the Pentagon acqui­si­tion chief John Young and sets up a ded­i­cated source-​​selection com­mit­tee, shows that senior civil­ians at the Defense Department have lost con­fi­dence in the Air Force’s abil­ity to man­age the contract.

“I think it’s bet­ter,” said Rep. Norm Dicks, a Washington Democrat. “No one has any faith in the Air Force.” 

We’re going to have more analy­sis from Colin over at DoD Buzz in a few. He’s truckin’ it back from the Pentagon even as we speak.

Stay tuned…

– Christian

Several sources say the Pentagon will announce its way for­ward on the KC-​​X tanker con­tract [today]. 

The last I heard from sources close to the issue was that John Young, under­sec­re­tary of Defense for acqui­si­tion, tech­nol­ogy and logis­tics, wanted to go with a fly off. Boeing and Northrop Grumman would have to build and fly one or more test mod­els. Whoever best met the require­ments and demon­strated capa­bil­ity would win the con­tract. Given that Defense Secretary Robert Gates has made it pretty clear that he is uncom­fort­able rely­ing on Youngs office about the tanker deal after all, Young signed off on and then defended the Air Force choice there seems to be a good chance that the fly off idea will be stillborn. 

With [Wednesday’s] announce­ment Gates may be try­ing to get ahead of any con­gres­sional steam­roller on this one, since the House Armed Services air and land forces sub­com­mit­tee has its tanker hear­ing sched­uled for Thursday afternoon.

(more…)

From our boy Colin Clark over at DoD Buzz:

UPDATE: The House Armed Services air­land sub­com­mit­tee will hold a July 10 hear­ing at 2 p.m. in Rayburn 2118 on the tanker con­tract at which John Young, under­se­c­etary of Defense for acqui­si­tion, tech­nol­ogy and logis­tics, Sue Payton, assis­tant sec­re­tary of the Air Force for acqui­si­tion, and a rep­re­sen­ta­tive from the Government Accountability Office will tes­tify. ALSO, see below for infor­ma­tion about a closed meet­ing today with House law­mak­ers, a GAO rep and one from the Pentagon.