The Tanker Wars Continue

After years of delays and the continued use of Eisenhower-era tankers by the Air Force, the KC-X program was finally awarded in 2008 to the team of Northrop Grumman and EADS after a heated competition with Boeing. By several accounts, Boeing was favored the win the competition. However, Boeing protested the award, and the contract was subsequently overturned by a scathing report by the GAO that painted a bleak picture of the source selection procedures and questionable practices used to award the contract.

The contract has become political and heated, with both companies continuing an unprecedented public relations campaign known as Tanker Wars. Continuing the problems are reports of delays by the Obama Administration as part of their budget.

In an effort to speed up the new award and continue the fight, Congressman John Murtha (D-PA) and other allies on Capitol Hill heavily invested in the “Tanker Wars” have proposed splitting the new award between Boeing and Northrop Grumman. This is idea, understandably, has received a lukewarm reception by DoD for many reasons. Just the thought of the operations and maintenance costs, exacerbated by the logistical footprint for a dual platform solution, would be overwhelming and cost prohibitive.

Earlier this week, Northrop Grumman has indicated that they are willing to break up the contract.

In a move that could put them squarely at odds with the Defense Department, officials of Northrop Grumman Corp. voiced tempered support Monday for splitting a lucrative procurement contract for aerial refueling tankers with rival bidder Boeing Co.

Northrop Grumman, which is vying to build a new fleet of tankers for the Air Force, released an internal analysis indicating that buying two different aircraft would save $10.2 billion between 2012 and 2029.

The crux of the projected savings comes from replacing the current fleet of Boeing KC-135 tankers faster than now planned, reducing the cost of keeping those Eisenhower-era planes flying.

The brief analysis does not mention increased logistics, spare parts, maintenance and other costs that opponents of a split or shared contract have said would be incurred by having two vastly different tankers in the fleet. A team of Northrop Grumman and the European consortium EADS has proposed using a modified wide-body Airbus A330, while Boeing has offered a variant of its 767 passenger plane…

Although I have not seen the internal analysis, I am not sure how to reconcile the cost savings they are predicting without the increased costs of the dual platform solution. I hope this idea gets a thorough assessment if it is to be seriously considered as a resolution to this saga. Seeing how this story has been going on for almost ten years now, the war continues.