Boeing Wins U.S. Air Force Tanker Battle

Boeing has won the long-running battle to supply the U.S. Air Force with a new aerial refueling tanker, the service announced today.

The new U.S. Air Force tanker will be based on Boeing's 767 twin-engine widebody airliner. (Boeing)

The initial contract was a fixed-price incentive firm contract valued at over $3.5 billion for KC-X engineering and manufacturing development and the delivery of 18 aircraft, dubbed KC-46As, by 2017. The Air Force will eventually spend an estimated $30 billion to buy 179 planes.

Based on the modern Boeing 767 twin-engine widebody airliner, the new tankers will replace many Eisenhower-era KC-135 aircraft, based on the Boeing 707.
Deputy Defense Secretary William Lynn, along with DoD acquisition executive Ashton Carter, Air Force Secretary Michael Donley and Chief of Staff Gen. Norton Schwartz made the announcement during a briefing at the Pentagon this evening.
In a Feb. 24 statement, the chairman and ranking member of the House Armed Services Committee vowed "to continue the necessary oversight to ensure the evaluation was transparent and fair to each competitor."
"We look forward to receiving more information from the Air Force as we review their decision-making processes. The Seapower and Projection Forces Subcommittee will hold a hearing on this issue as soon as enough information is publicly available," said the statement by Reps. Howard P. "Buck" McKeon, R-Calif., and Adam Smith, D-Wash.
"A Boeing victory means that the company retains a 50-year franchise in being the sole supplier of aerial refueling tankers to the U.S. Air Force. It's worth tens of billions of dollars to the company and it also assures the commercial arm of EADS will not start building airliners in North America," said Loren Thompson of the Lexington Institute.
He said that Boeing's victory caught most observers off guard; an EADS victory seemed all but certain.
"The Boeing victory suggests that the Air Force was concerned about the higher cost of building and then operating an A330, which burns a ton more fuel per flight hour than the Boeing aircraft," he said.
Thompson said service officials did not consider the industrial base when making their selection.
"This is purely about the price and performance of the competing aircraft," he said.
The program is likely to be the largest award during the Obama Administration, and a source of steady work for decades.
If EADS decides to protest, the European firm may have the upper hand in a political battle, thanks to Republican control of the House of Representatives and their increased presence in the Senate, said Richard Aboulafia, an analyst at the Teal Group, Fairfax, Va. By contrast, Boeing's political power seems to be waning.
Still, he said, a lengthy battle is all but unavoidable. EADS sees the tanker contract as crucial for breaking into the U.S. military market, Aboulafia said.
Despite EADS' participation, the tanker contract does not signal that the United States is necessarily more open to foreign companies acting as prime contractors for large military contracts.
"I don't think this tells you much about the future access of foreign companies to the U.S. market," Thompson said. "This is a one-shot deal."
The analyst said there were unique factors surrounding the tanker contract.
Because the Air Force wanted a competition, industry sources said, EADS received a number of waivers for several "key performance parameters," including the ability to take off from 7,000-foot runways, fitting into existing hangars, and refueling all types of Air Force aircraft - it reportedly cannot pass fuel to Air Force V-22s. As well, the sources said, the contractor will not be required to integrate government-furnished classified hardware.
EADS and Boeing have been battling over the tanker for nearly a decade. In the early 2000s, the Air Force tried to lease 767-based tankers from Boeing under a sole-source contract, then tried to appease critics by switching to a plan to buy 80 aircraft and lease 20. But opposition to the plan, led by U.S. Senator John McCain (R-Ariz.), torpedoed the deal in November 2003.
The tanker contract was further marred with the revelation that a senior Air Force contracting official named Darleen Druyun had steered contracts at inflated prices to Boeing in exchange for employment for herself and family members. The contract was formally ended in January 2006.
In January 2007, the Air Force launched the KC-X tanker competition, drawing bids from Boeing and archrival EADS, which partnered with Northrop Grumman. In February 2008, the Northrop-EADS team won the contract with their Airbus A330-based aircraft.
The following month, however, Boeing protested, claiming the Air Force failed to evaluate the two proposals using the published criteria. That June, the Government Accountability Office (GAO) upheld the protest, which led to the cancellation of the program.
The Defense Department attempted to restart the program, but aborted the attempt because a winner could not be picked before the Bush Administration left office.
The KC-X program was restarted for a third time in September 2009 by Defense Secretary Robert Gates. Though the Air Force controls the selection process, the Office of the Secretary of Defense has been closely monitoring the process. In the new competition, military acquisition officials issued 373 requirements for the tanker, but said that the unit cost of each aircraft would be adjusted to reflect lifecycle cost over 40 years. The Air Force would also judge how effectively the aircraft would meet "warfighter effectiveness."

Pakistan Targets Air Combat Needs To Protect Air Defense, C2 Early in War

TAIPEI - The Pakistan Air Force (PAF) has not seen serious air combat since the 1965 and 1971 wars with India, but the ability to defeat a massive Indian assault on its air defenses early in a war remains its primary mission.
In 1965, Pakistan successfully trumped India in air combat, but it was ill-prepared for the 1971 conflict in which India dominated the skies. Fears of losing another war, much less a nuclear war, are unthinkable, and the PAF is modernizing its air interdiction, air surveillance and reconnaissance, command and control, and honing its air delivery skills for nuclear weapons.

Air interdiction is the PAF's primary mission, but it has not ignored retaliatory strike missions, said Haris Khan of the Pakdef Military Consortium. The PAF has expanded modernization efforts to include "nuclear weapons delivery, support of ground operations, fleet protection/maritime strike, and search and rescue are secondary," he said.
The PAF believes the Indian Air Force will launch a massive assault on Pakistan's air defense and command-and-control hubs during the first wave of a war, said A.B. Mahapatra, director of the New Delhi-based Centre for Asian Strategic Studies - India.
The Indian Air Force's primary mission is to neutralize Pakistan's nuclear option, he said.
"Thus, PAF is enhancing its air combat profile to encounter such future challenges," Mahapatra said.
The PAF's interdiction efforts include new and refurbished Lockheed Martin F-16s, now on order, and JF-17 Thunder fighters, built by Pakistan with Chinese assistance, now being manufactured.
In June 2006, the PAF ordered 18 F-16 C/D Block 52M fighters along with an option to procure another 18. A midlife upgrade will augment its existing fleet of 40 F-16 A/B Block 15s, along with buying 20 more F-16 A/B models via the Excessive Defense Articles program.
The F-16s will not be outfitted with nuclear weapons, but question marks remain for the JF-17. Known as the Chengdu J-10 Vigorous Dragon, the JF-17 will replace about 450 aging Nanchang A-5C Fantans, Dassault Mirage III/Vs and Chengdu F-7P Skybolts in the air-to-air combat and ground-support roles.
"The replacement will not be matched by an exact number, but initial reports indicate between 250 and 300 aircraft will be purchased by PAF," Khan said.
Khan said the Pakistan Aeronautical Complex is conducting flight evaluations of prototype aircraft "fitted with the Chinese-built NRIET KLJ-10 radar" and "Chinese-designed SD-10/PL-12 active-homing medium-range air-to-air missile."
The first 50 JF-17s will be outfitted with Chinese avionics, radar and missiles. But under an agreement with France in February, newer JF-17s will be outfitted with MBDA Mica air-to-air missiles and Thales RC 400 multimission radars.
The Russian-built RD-93 turbofan engine outfitting the JF-17 will have to be replaced due to pressure from India on Russia. Khan said the Chinese-built WS-13 Taishan engine is the most likely replacement.
There are unconfirmed reports, Khan said, that the PAF has ordered four aerial refueling tankers, possibly the Ukrainian-built Il-76.

Tentative UAV Plans

PAF also is improving its surveillance and reconnaissance capabilities.
"Pakistan uses UAVs for surveillance and is keen to augment the reconnaissance capabilities to a new height," with plans to procure up to 60 UAVs by 2010, Mahapatra said.
The Army has ordered the Luna short-range UAV from Germany and the Italian-built Galileo Falco UAV.
"An agreement was also signed in July of 2006 between the PAF and Turkey to jointly manufacture a UAV, which will meet the requirements of both air forces. The PAF UAV program is still in its adolescent stage, but they acknowledge the significance of the program for its future war plans," Khan said.
In April, the first of five Saab 2000 turboprop aircraft equipped with the Saab-Ericsson Erieye Airborne Early Warning & Command (AEW&C) system was rolled out during a ceremony in Sweden. Delivery to Pakistan is expected in mid-2009. Khan said there are discussions with China to co-develop an AEW&C aircraft designated as ZDK03 modeled on the Shaanxi Y-8F-400.
"PAF has mapped a very detailed and comprehensive plan for an early warning system to cover Pakistan's airspace with both airborne platforms and a ground-based radar network," he said.
Pakistan will integrate this plan with ground-based radar, including the U.S.-supplied AN/TPS-77 and Chinese-supplied JYL-1, JL3D-90A and JY-11 D air surveillance radars.
Khan points to other efforts, including a 2006 test of the Czech Vera passive radar system and an order for a number of MBDA Aspide/Spada 2000 low- to medium-altitude air defense batteries.
"These missiles are supposed to replace Thales Defence Systems Crotale. PAF is actively looking to purchase a high-altitude missile air defense system," with the Chinese-built FT-2000 as the front-runner, Khan said.
In the 1965 and 1971 wars with India, Pakistan successfully attacked ground targets, including high-value targets, within 200 miles of Pakistan's border.
Khan said in any future conflict with India, "I believe PAF will employ similar tactics," but with more intensity on high-value targets.
"PAF would, in the first instance, be tasked with countering India's planned advance into Pakistani territory by seeking to prevent the Indian Air Force from achieving local tactical air superiority," he said. "At the same time, it would be required to strike surface-to-surface missile launchers, if these can be identified. It would also be called upon to provide air cover for the strike corps in their limited advance to occupy Indian territory."

USAF Tanker Award Set for 5:10 p.m. ET

U.S. Deputy Defense Secretary William Lynn, Pentagon procurement czar Ashton Carter, Air Force Secretary Michael Donley and Air Force Chief Gen. Norton Schwartz are to announce the winner of the U.S. Air Force's long-running KC-X tanker contract at 5:10 p.m.

EADS's Airbus A330, top, and Boeing's 767, below, are competing for the $35 billion U.S. Air Force KC-X contract. (EADS, Boeing)

flash goes hereEADS's Airbus A330 and Boeing's 767 are in an epic dogfight to supply the Air Force with 179 tankers for a total value that could amount to $35 billion.

U.S. Air Force Tanker Award Expected Feb. 24

WASHINGTON - The U.S. Defense Department is expected to announce Feb. 24 the winner of a $35 billion Air Force aerial refueling tanker contract fought over by Boeing and European rival EADS for nearly a decade.
Congressional aides told AFP the award of one of the biggest procurement contracts in U.S. history would come Feb. 24.

The Pentagon declined to comment on the matter.
The Defense Department is seeking to replace 179 tankers in an aging U.S. Air Force fleet of Boeing KC-135s that date back to the 1950s.
In the high-stakes, politically charged battle, U.S. aerospace giant Boeing and the European Aeronautic Defence and Space Company, parent of France-based Airbus, delivered their final bids by last Friday's deadline.
EADS is looking like the favorite to land the contract, said Loren Thompson, an analyst at the Lexington Institute think-tank based just outside the U.S. capital.
"Judging from the frequency with which Pentagon acquisition chief Ashton Carter has been talking up the notion of a 'globalized' defense market recently, European aerospace giant EADS is the winner," Thompson said in an online blog.
Thompson said the Air Force would announce the winner Feb. 24 after the financial markets close.
The first time the contract was awarded, it went to Boeing, but it was subsequently canceled amid a Pentagon procurement scandal.
EADS won the contract in 2008 along with U.S. partner Northrop Grumman, but the decision was withdrawn after the Government Accountability Office upheld Boeing's objections that the process was flawed.
EADS is now competing without a main partner, but with support from a number of U.S. equipment makers.
EADS North America chairman Ralph Crosby said last week the firm had lowered the price of its final bid to a "very competitive price proposal."
Boeing's chief executive Jim McNerney earlier described his firm's bid as an "aggressive" attempt to beat its "subsidized" European rival.
This third attempt is marked by fierce lobbying from lawmakers seeking jobs in their states - for Boeing, in Washington state and Kansas; for Airbus, in Alabama - with the added dimension of a long-running trade dispute between the United States and the European Union at the World Trade Organization over public subsidies for Boeing and Airbus.
The Defense Department insists the winner will be decided on the merits of its bid.
Thompson cautioned that the Pentagon announcement may not close the book on the matter.
"Boeing could challenge the rating methodology and several other facets of the selection process, but since price is the key discriminator in the outcome, it is more likely to pursue a political strategy focusing on EADS use of prohibited trade subsidies in developing and marketing its planes," he said.
The rivals are offering militarized versions of their commercial aircraft and promising the contract would add tens of thousands of jobs to the post-recession U.S. economy still struggling with high unemployment.
The EADS KC-45 is based on the long-haul Airbus 330. EADS says it has 31 percent more capacity and a longer range than Boeing's offer, the KC-767.
It would be assembled in Mobile, Alabama, where EADS expects to produce at least 12 aircraft a year and says the program would create 48,000 jobs.
Representatives of Mobile area organizations, including city and county officials, plan to gather at the Mobile Convention Center to await the expected announcement and have scheduled a news conference, county official Peter Albrecht told AFP.
Boeing spokespersons were not immediately available to comment on the looming announcement.
Boeing is proposing the KC-767, or NewGen Tanker, built around its long-haul 767 plane. The bigger Boeing plane would be assembled in Everett, Washington, and equipped in Wichita, Kansas. Boeing says a win would provide 50,000 jobs.

Italian Air Force Receives 1st Tanker From Boeing

ROME - The Italian Air Force took delivery on Jan. 27 of the first of four Boeing KC767-A tanker aircraft it has acquired.
The aircraft, MM 62229, flew from Boeing's Wichita, Kan., facility to the Italian Air Force's Pratica di Mare base south of Rome for a hand-over ceremony, the Air Force said in a statement.

The aircraft will now "undergo a series of tests and activities" before entering service, the statement said.
"The second aircraft, which should be delivered in the coming months, is now undergoing tests at Boeing," added the statement.
Boeing has previously said that the last two of the four aircraft would feature "enhanced capabilities," without giving details.
The KC767-A replaces the B-707T/T tanker previously flown by the Italian Air Force. It is configured for troop and cargo transport, as well as refueling from a rear boom and three hose and drogues - one under each wing and one under the main fuselage.
Three crew are required for transport flights and four for refueling missions.
After first promising delivery of the tanker in 2005, Boeing's schedule slipped as it sought to fix a vibration problem with a wing pylon, and then tackle a stability problem on the centerline hose and drogue.

USAF: Disclosing Tanker Bid Info Did No Harm

The inadvertent release of confidential information in the competition to build the next aerial refueling tanker didn't hurt the $35 billion project, U.S. Air Force officials told a Senate panel Jan. 27.
The two companies competing to build the KC-X tanker, European Aeronautic Defence and Space and The Boeing Co., received computer discs Nov. 1 from the Air Force containing the military's confidential evaluation of each company's proposal.

Maj. Gen. Wendy Masiello, who works for the assistant secretary of acquisition, told lawmakers on the Senate Armed Services Committee the error was unintentional and didn't violate procurement law.
"The Air Force has been and remains committed to a fair, open and transparent KC-X source selection," Masiello said.
But with the Air Force expected to choose the winner in February, lawmakers worried the error could still hurt the selection process.
"This is a case study of incompetence," said Sen. Claire McCaskill, D-Mo.
Information on each computer disc graded each company on how its tanker might perform. The Air Force was supposed to send each company only that company's evaluations but inadvertently sent the competitor's evaluations, too.
An EADS staffer opened a page evaluating the Boeing plane for an estimated 15 seconds, according to Sean O'Keefe, EADS' CEO. The page didn't include pricing or proprietary information.
The worker alerted security officers and the discs were returned to the Pentagon. The file remained open for three minutes and the computer remained on for 20 minutes, according to Steven Shirley, executive director of the Defense Department's cybercrime center.
"The screen might have been open, but he was the only person in the room and he left the room," Masiello said of the EADS staffer.
O'Keefe disputed reports that EADS held the disc for a month.
"EADS North America acted correctly, quickly and responsibly in addressing an incident that was not of our making," O'Keefe said in a statement to the committee.
Dennis Muilenburg, Boeing's CEO for defense, space and security, said a Boeing staffer noticed a reference to the EADS version of the tanker while opening the disc he received and reported it to security officers without opening the disc.
"Boeing's behavior in this instance is emblematic of our conduct throughout this competition," Muilenburg said in a statement to the committee.
On Nov. 22, Air Force officials decided to make sure the playing field was level and sent each company a page - corresponding to the page the EADS staffer had reported looking at - of the other company's evaluation.
"What kind of actions have been taken against the person who made the mistake?" McCaskill asked Masiello at one point.
Masiello said the two Aeronautical Systems Center workers who sent out the wrong discs were transferred and two others were counseled, but she said she didn't know where the transferred workers are now, whether they earn the same salary or whether they would ever be in a position to deal with contracting again.
Masiello said the company that loses the competition for the tanker contract could use the mistake involving the computer discs as a basis for a formal protest.
Sens. Jeff Sessions, R-Ala., and Roger Wicker, R-Miss., noted that neither company has protested yet.
"It's really important on this committee for us not to politicize this process," Sessions said.

Airbus: FSTA Tests Succeed, Boom Tests on Hold

LONDON - Airbus Military said it successfully tested the final hose-and-drogue system destined for Britain's Future Strategic Tanker Aircraft (FSTA) program by refueling two Spanish Air Force F/A-18 fighter jets while in flight on Jan. 21.
A company spokeswoman also confirmed that Airbus has, for the time being, ceased test flying using its new flight refueling system. Part of the equipment broke off during contact with a Portuguese Air Force F-16 during Jan. 19 tests on an aerial refueling plane built for the Royal Australian Air Force (RAAF).

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On Jan. 21, the Cobham-designed fuselage-hose-and-drogue refueling unit was tested in a series of "wet contacts" with the F/A-18s during a three-plus-hour sortie by the A330 Multi Role Tanker Transport (MRTT) aircraft, Airbus said.
Situated on the fuselage, the system is similar to the Cobham units fitted under the wings of the British-bound refueling plane, but with a higher rate of fuel transfer. The wing systems have already been tested.
Airbus parent EADS is leading a consortium to supply 14 A330 tanker planes for use by the U.K. Royal Air Force as part of a private finance initiative.
The first aircraft is to be handed over at year's end.
Meanwhile, investigations continue into the loss of part of the new Airbus-designed aerial refueling boom system during testing on the A330 destined for the RAAF.
The spokeswoman said Airbus could not give any details of the incident at this time. She said it was not unusual for aircraft equipped with boom flight refueling systems to suffer a break.
The first of the RAAF jets is earmarked for handing over next month, and discussions are underway between Airbus and its customer as to whether the delivery will go-ahead on schedule.
Australia has purchased five A330 MRTT planes and will become the first operator of the airliner-based system, which also has been sold to Saudi Arabia, the United Arab Emirates and the U.K.
The A330 and boom system is currently embroiled in a competition with Boeing to supply the U.S. Air Force with a new tanker plane.