By Jen DiMascio
This week, Boeing [BA] and Northrop Grumman [NOC], contestants for the Air Force’s next aerial refueling tanker contract, announced advancements in their respective refueling systems.
Boeing announced that it completed its first nighttime refueling on a KC-767, which the company expects to deliver to Japan this quarter.
Likewise, Northrop Grumman touted progress on the KC-30 tanker Jan. 28. In a statement, the company said the aircraft has passed key test milestones and deployed elements of the refueling system, called the hose and drogue, to multiple lengths.
It was the latest back-and-forth in a public relations blitz leading up to the contract award worth up to $40 billion, which is expected in late February.
That may help in this case, because the political calculus could be an unstated element of the competition, according to an industry analyst.
The two key intangibles in this competition are the cost per boom–a probe through which fuel passes from the tanker to the aircraft that needs gas–coupled with the political atmosphere in Washington, said Richard Aboulafia, vice president of analysis for the Teal Group. Both factors could tip the scales in Boeing’s favor, that is, unless Northrop Grumman has entered a very aggressive bid, he said.
The Air Force has a ranked list of five criteria–mission requirements, proposal risk, past performance, life-cycle cost and fleet effectiveness value–but it is unclear how those will be weighed, Aboulafia said. That leaves the door open for almost anything to happen.
The recent briefings by Northrop Grumman and Boeing, he said, could provide a window into potential Government Accountability Office protests for the losing team, he said.
In a Jan. 15 briefing, Northrop Grumman highlighted its fleet effectiveness value and low risk, because the company is providing similar tankers to four other countries. Northrop Grumman chipped at Boeing’s KC-767 on the issue of risk, in terms of software integration and Boeing’s boom redesign. Boeing is upgrading the boom from the tanker it has sold to Italy and Japan.
“Our competition is now out there proffering a gen-six boom that for all we know is nothing more than a cartoon. So there must be some doubt, some risk on [technical readiness] levels,” said Paul Meyer, general manager and vice president of Air Mobility Systems at Northrop Grumman.
According to Boeing officials, the boom upgrade’s critical technology elements are as technically ready as they should be. The sixth-generation boom expands the size of the envelope, which gives the receiver more room to move before having to disconnect from the fuel source, said Mark McGraw, vice president for Boeing’s tanker programs, on Jan. 23, when Boeing allowed reporters to pilot a tanker simulator outside their Rosslyn, Va., office.
The maturity of boom integration was an issue the last time the Air Force competed the tanker program between Boeing and the European Aeronautic Defense and Space Co., Nothrop Grumman’s partner in the current competition.
When the Air Force chose Boeing in 2002, EADS’ lack of experience integrating a boom on its Airbus aircraft was one of the strikes against the company (Defense Daily, Nov. 22, 2004). That competition never led to new tankers, as Boeing’s plan to lease them stalled because a top service official pleaded guilty to conflict-of-interest charges related to the program.
During a briefing one week earlier, Boeing offered a report on fuel efficiency that showed the life-cycle cost of the KC-767 would be billions less than the KC-30.
“I believe our offer is representative of an equal unit price. I believe when I say the total offer, again we were given rigorous criteria to evaluate the most probable life- cycle costs. And it goes back to number of sorties per year versus tails, which puts us in an equivalency rate against the 767,” Meyer said. “That’s where I would tell you the value opportunity needs to be taken into account, because we do burn more fuel. We are a bigger airplane, so it has some attendant higher maintenance or operating costs over the life of the fleet in a 40-year time frame. But nominally, it’s not that significant.”