Feb. 25, 2011—Boeing's 767-based NewGen tanker was the "clear winner" in the Air Force's KC-X tanker contest, said Deputy Defense Secretary Bill Lynn Thursday during the Pentagon briefing announcing this much-anticipated decision. The Chicago-based aerospace giant's aircraft, now called the KC-46A, beat out EADS North America's A330-based KC-45 tanker model.
Air Force Secretary Michael Donley made the formal announcement that Boeing had won.
"To the men and women of our Air Force, today's announcement represents a long-overdue start to a much-needed program," he said during the briefing, at which Chief of Staff Gen. Norton Schwartz and Pentagon acquisition executive Ash Carter also were present. Donley added, "General Schwartz and I are confident in the fact that when our young pilots, boom operators, and maintainers receive this aircraft, they will have the tools they need to be successful at what we ask them to do."
Schwartz said: "I would just say that I'm pleased with how this [source-selection process] has produced an outcome after an exhaustive effort by hundreds of the department's very best people, [and] that we will get about delivering the capability that's long overdue, and we will stop talking about it."
Boeing is now tasked with delivering 18 new-build KC-46As by 2017 under the initial $3.5 billion fixed-price-incentive contract for the tanker's engineering and manufacturing development phase. Overall, the Air Force plans to buy 179 KC-46As to replace its oldest KC-135s. The total estimated value of this work is more than $30 billion, depending on the options exercised, said Donley.
"We're honored to be given the opportunity to build the Air Force's next tanker and provide a vital capability to the men and women of our armed forces," said Jim McNerney, Boeing chairman, president and CEO, in the company's release.
Jim Albaugh, president and CEO of Being Commercial Airplanes, said the company is committed to delivering the tankers "on time and on budget."
Donley said the seven-month-long process of evaluating the bids was "thorough and transparent" and was "marked by continual dialogue with offerors to ensure the Air Force had a clear understanding of their proposals and the companies clearly understood the service's analysis of their offers."
The Air Force-led team of evaluators found that both Boeing's and EADS North America's tanker designs met the 372 mandatory requirements for KC-X, and the Air Force considered each offer "awardable," he said. Because the evaluators judged Boeing's bid to be more than one percent lower in price than EADS North America's proposal—"yielding substantial savings to the taxpayer"—the assessment of numerous additional, non-mandatory, but desirable attributes, did not factor in the outcome, he said.
Donley said he hoped that the losing contractor would accept the decision and allow the contract to proceed "unimpeded." "He added, "The warfighter deserves nothing less."
EADS North America left the door open for a protest, stating in a release that it had offered the Air Force a "proven" tanker with less risk than what Boeing put forth. "With a program of such complexity, our review of today's decision will take some time," said EADS North America Chairman Ralph Crosby. He added, "There are more than 48,000 Americans who are eager to build the KC-45 here in the US, and we owe it to them to conduct a thorough analysis."
Lynn said he did not believe that there are grounds for a protest, echoing Donley's comments about fairness and transparency. However, Lynn acknowledged that EADS North America has the right to protest, if it so chooses.
Thursday's contract award is the third time in nearly a decade that the Air Force has tried to replace its Eisenhower-era KC-135s. A lease-purchase deal for Boeing KC-767 tankers faltered about six years ago for reasons including the illegal activities of a former senior Air Force acquisition official. A successful legal protest by Boeing in 2008 doomed the Air Force's subsequent attempt to buy KC-45s from the then-Northrop Grumman/EADS North America team.
The Pentagon leadership announced its intent in 2009 to try again to get the Air Force a new tanker. Northrop subsequently pulled out of its partnership with EADS in March 2010 after reviewing the Air Force's request for proposal and judging that it was skewed toward a smaller aircraft, like the 767-based tanker, and the contest was therefore unwinnable for the larger KC-45. This opened the door for EADS to bid on its own.
Nevertheless, in recent weeks, outside observers had considered EADS as the frontrunner to win.
A third company—Southern California-based US Aerospace—tried last summer to enter a Ukrainian-made AN-112-based aircraft into the KC-X competition. However, it failed to turn in a bid on time.
Beyond KC-X, Lynn said the Air Force still intends to go forward at some future point with subsequent KC-Y and KC-Z initiatives to replace the remaining KC-135s and the comparatively younger KC-10 tankers. There is no timeline for those programs.
Carter said Boeing would not have a lock on that future work.
John A. Tirpak provided additional reporting.
Air Force release
DOD contract announcements for Feb. 24