Who needs Northrop Grumman anyway?

While we’re all waiting for Northrop Grumman to decide whether it wants to play, let’s consider what could happen if they don’t submit a bid for the $35 billion tanker contract.

In the absence of a Northrop-led proposal, what would stop EADS North America from submitting its own bid for the KC-X deal?

I can think of reasons why they would. If price is such a factor in the competition, cutting out the US flag bearer and bringing systems integration in-house might save some money. EADS NA has demonstrated it can win an aircraft contract from the US military. The 100th UH-72 Lakota for the US Army rolls off the assembly line in Mississippi next week. The company believes its solid performance on LUH allows it to compete on fair terms with American-owned companies for other Pentagon contracts.

On the other hand, there’s no question EADS’ chances of victory are smaller without Northrop’s help. Northrop has powerful friends on Capitol Hill and a long relationship with the customer. Moreover, as long as fuel offload requirements for the next tanker are modeled on the KC-135R, the KC-45 is going to be disadvantaged against a smaller aircraft like the Boeing 767. And let’s be honest: The UH-72, despite its success, is not a widebody tanker; it’s a civilian airspace-only light utility helicopter.

EADS NA is not ready yet to even acknowledge whether their teamingagreement with Northrop would preclude a standalone bid, as I askedthem earlier today. EADS’ spokesman replied: “EADS North America iscommitted, under the team leadership of Northrop Grumman, to providethe most capable tanker to the US warfighter.”

But I think it’s still a fair question. Why not?


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4 Responses to Who needs Northrop Grumman anyway?

  1. Robert 26 February, 2010 at 1:24 am #

    Northrop is the grease to make MRTT somewhat more ‘American.’

  2. Matthew G. Saroff 26 February, 2010 at 5:04 am #

    Is there a requirement that it be assembled in the US?

    If so, for EADS to set up a final assembly facility might push the schedule too much.

  3. mcfly0570 26 February, 2010 at 8:43 pm #

    actually, the USA need NG/EADS or any other bidder…

    if they don’t submit any bid, boeing can propose its tanker at any price, meaning, it can cost a lot more on following batches.

    Simply put, if there’s no other bidder, the whole thign will cost a lot more, since without competition, boeing has no need to try to lower its prices

  4. Howard 26 February, 2010 at 11:12 pm #

    EADS technically Could bid, rather EADS North American could, but the odds of winning are infintesemal. They would totally lose the fig leaf of being “American”. Additonally, if EADS were to bid on it’s own it’s past performance marks would be horrible. Those are currently not figured into the offer because EADS is just a “tier 1″ supplier and not the bidder. A400M fiasco alone is enough to make their past performance marks hit the skids.

    As for Boeing being able to price gouge, um… no. Because the USAF has the bids from the LAST competition to bounce the current bids off of, and the new bids MUST be better than the old ones, so there is no way for Boeing to do any kind of price gouging.

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