By Marina Malenic
Boeing [BA] attributed its victory in the closely watched contest to build a new aerial refueling tanker fleet for the Air Force to its ability to deliver a low-risk solution at an affordable price.
“If you look at the overall criteria, it was life-cycle costs, our ability to deliver long-term support, not only taking advantage of our efficient production capacity but also the fact that our 767-based airframe is very efficient, very reliable and very maintainable,” Dennis Muilenburg, chief of Boeing’s Defense, Space and Security unit, told reporters during a Feb. 24 teleconference following the Pentagon’s announcement of the contract award.
“We submitted an aggressive but responsible bid that will allow us to execute the program while still creating value for our shareholders,” Muilenburg added. “We think we found the right balance.”
The new aircraft will be designated the KC-46A, according to Air Force officials. The firm fixed-price contract awarded last week and valued at over $3.5 billion is for delivery of 18 aircraft by 2017. The overall program for 179 tankers is valued at upwards of $30 billion, officials have said.
In the Air Force’s prior attempt to replace its Eisenhower-era tankers, Boeing successfully protested a previous win by Airbus parent company EADS and then-partner Northrop Grumman [NOC].
In the latest contest, both Boeing and EADS “were deemed to have met the mandatory requirements and were considered awardable,” Air Force Secretary Michael Donley said during a press conference last week. However, “Boeing was the clear winner.”
EADS North America officials expressed disappointment following the announcement.
“This is certainly a disappointing turn of events, and we look forward to discussing with the Air Force how it arrived at this conclusion,” EADS North America Chairman Ralph Crosby said in a press statement.
If selected, EADS had committed to build its A300-based tanker at a new production facility in Mobile, Ala.
Late last year, the Air Force sought to “level the playing field” after inadvertently providing the companies data about each other’s bids by later intentionally releasing the information to the firms (Defense Daily, Dec. 2). Neither Boeing nor EADS officials have ruled out legally protesting the release of the information (Defense Daily, Nov. 23).
Last week, EADS officials would not rule out a protest.
“With a program of such complexity, our review of today’s decision will take some time,” Crosby said.
Air Force officials said earlier this month that they have prepared for a protest from the losing bidder (Defense Daily, Feb. 22).
EADS’s Airbus unit has beaten Boeing in recent tanker contests in Australia, Saudi Arabia, the United Arab Emirates and the United Kingdom. Boeing has prevailed in competitions in Italy and Japan.
Meanwhile, Boeing has chosen U.K.-based Cobham to supply the 179 KC-46A tanker aircraft with a hose and drogue refueling system. Approximately 30 tankers will also be provided with a pair of wing-mounted aerial refueling pods, the company said in a statement released Feb. 25.
The equipment is to be manufactured in Davenport, Iowa, the company said in a statement last week. According to an industry source, the work could be worth up to $1 billion over the life of the program.