Boeing’s six options

Seattle-based-yet-French-born aerospace analyst Michel Merluzeau spells out what he thinks are Boeing’s options in the second round of the KC-X tanker competition. You can read his blog here.

Merluzeau says:

1.  Stick with KC-767 and correct the weaknesses of the initial proposal, particularly in the area of cost/maintenance.

- This option is one of the better avenues for Boeing to patch upthe relationship with USAF and gives a better chance of winning KC-X.

2.  Protest the draft RFP, insist that USAF sticks to the original document

- This will likely further damage relations with USAF and provides no guarantee as to the outcome.

3.  Switch to the 777 option

- While some believe it is already toolate for 777 to enter the fray,  Boeing has done a significant amountof work on the concept.  It could still be introduced and be seen as away to be responsive to customer requirements, what we call a”disruptive offering”. KC-777 would be a formidable competitor in manyareas, however it is perhaps too large and can operate from fewerairfields than KC-30.

4. Withdraw from the competition

- If Boeing truly believes that KC-30 has got the lock on KC-X, it perhaps is best not to spend anymore IDS money at this point.

5. Sue the government

- Bad, bad idea, USAF has a long memory.  Keep the lawyers away from this.

6. Hope for a split or make one happen;  read: ” Cry havoc and let loose the dogs of war”

-  This is what we call “Verdun 1916″, trench warfare.  Politicianstake the competition over (as if this was further possible) and enforceeither a Boeing win or a split.

Personally, I wouldn’t be surprised if the winner is Option 6, with an assist from Option 2. I think we can safely rule out Option 4, and Option 5 would be a big surprise.

Anybody think Option 1 or 3 have a chance?

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7 Responses to Boeing’s six options

  1. Royce 7 August, 2008 at 7:04 pm #

    At this stage, if Boeing decides to play hardball it’s more likely to fight via friendly members of Congress than direct action. The problem for the USAF is that they screwed up the procedures for the first competition, and now Boeing will argue that the service’s response was simply to rewrite the rules of the game to make it impossible for Boeing to win. That’s giving Congress a peg to hang the noose.

  2. Fred 7 August, 2008 at 9:26 pm #

    Since the 767, being smaller, must also cost less, I am curious as to how many more platforms the USAF would get by going Boeing.

    Or if they specify the number of aircraft, how much $less would the 767 proposal be to the USAF.

    I read somewhere a KC 767 sells for $130m – $150m. Anyone know the sticker price for a KC 30 ?

  3. Stephen Trimble 7 August, 2008 at 9:37 pm #

    Both bids came in at roughly the same price, although correcting the USAF’s calculations during the protest period gave a slight advantage on cost to Boeing. Northrop received the initial contract award to deliver 68 aircraft for $12.1 billion, averaging about $177 million for each aircraft. Boeing’s offer was therefore slightly cheaper than that.

  4. Sumit DasGupta 7 August, 2008 at 11:03 pm #

    Why not the 767-400? According to my research, here is how the 767-400 stacks up against the 330-200:

    Length: 201ft versus 191ft for 330-200
    Width: 17ft versus 16ft
    Wingspan: 170ft versus 197ft

  5. Puppethead 8 August, 2008 at 2:41 am #

    If Boeing think that the 767 is right, but the USAF want something bigger, Boeing could always try their own 767/777 split – maybe 70%/30%? This would give the Air Force some of the bigger tanker/transports they want, while still having birds able to fly out of smaller strips.

    Mind you, I think it’s a bit of chutzpah on Boeing’s behalf to try to sell as a “new” tanker an airframe that they’ll otherwise be looking at consigning to production history. If they’d really wanted to make a KC-135-size tactical tanker replacement, a KC-757-200F (maybe with a few more horsepower) mixed with KC-777s as KC-10 replacements looks like a more realistic mix – the KC-767 is in a bit of a no-man’s land. Its fuselage is oversized for a straight tanker, but too small for standard cargo containers.

  6. FF2 8 August, 2008 at 12:49 pm #

    Option 2 is the interesting one. But high risk for both Boeing and the Defense Department.

    If the GAO upholds the protest, Boeing’s hand would be immensely strengthened and the way will be clear for Congress to allocate them the deal. The DoD would then lose all credibility in running procurement competitions. Whether this is good for Boeing long term, I don’t know.

    On the other hand, the GAO may side with the DoD, which makes the “They fixed the contest” argument that much harder to sustain.

    The options for Boeing may not be that good.

  7. cfdman 9 August, 2008 at 12:07 am #

    Now that Boeing has been given clear info regarding how the contract will be awarded, they have the option (for the first time) of actually making a submission that is superior to NGs based on the AF criteria. But lets get serious, the AF still wont select Boeing (because they are biased as they have been from the beginning).

    So, Boeing will either loose because the AF will blatently select the NG arcraft in opposition to their own RFP criteria (as hppened before), or Boeing will loose because the AF will claim that Boeing can not meet schedule (because they are 18 months late in understanding the true desires of the AF). Either one will be the true basis for the next protest.

    The AF has NO intention of ever selecting Boeing, even if they were the last airframer on earth. They have rigged the system in favor of NG from the beginning (GAO agreed) and look like they will continue to do so based on this latest RFP. This is all simply a dance to justify thier original decision in early ’07 (as directed explicity by McCain) to favor any competitor other than Boeing.

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