By Marina Malenic
Northrop Grumman [NOC] yesterday said the new KC-X aerial refueling tanker competition is unfair because its rival for the multi-billion-dollar contract, Boeing [BA], has access to Northrop Grumman’s proprietary pricing data.
“Northrop Grumman continues to be greatly concerned that its pricing information from the previous tanker competition was provided by the government to its competitor,” Northrop President and General Manager Paul Meyer said in a written statement. “Access to comparable pricing information from Boeing has thus far been denied by the Pentagon.”
Northrop Grumman last year won the KC-X contract, which is expected to be worth between $25 billion and $50 billion through the life of the acquisition. Boeing’s protest of that award was sustained by the congressional auditors. During that process, Northrop Grumman’s pricing data was shared with all parties involved in the action.
During the release of a fresh request for proposals last week, Pentagon officials said access to that data was irrelevant to the new competition because it would not be a “re- run” of the previous effort. Air Force Secretary Michael Donley emphasized that the evaluation criteria will differ markedly.
Northrop Grumman, however, contends that knowledge of their pricing data could be an even greater advantage in the new competition because the contract will be fixed-price rather than cost-plus.
“With predominant emphasis placed on price in this tanker re-competition and Northrop Grumman again proposing its KC-45 refueling tanker, such competitive-pricing information takes on even greater importance,” said Meyer. “It is fundamentally unfair, and distorts any new competition, to provide such critical information to only one of the bidders.”
The initial contract is for 179 airplanes but could eventually cover replacement of over 500 KC-135 tankers.
Boeing has said it may offer two tankers–based on either its 767 or 777 airframe (Defense Daily, Sept. 28).