What-if, what-if, what-if? Some people went to the Moon after asking that question. I just went to my blog. The KC-X contract could be awarded in days or perhaps weeks. I have no idea who will win or lose, but I think I'm ready to play out a what-if exercise. Please, let me know what you think.
1. What if EADS wins the KC-X contract by under-bidding Boeing?
If you're a KC-767 supporter, you may argue disproportionate subsidies gives Airbus an unfair commercial advantage. If you're a KC-45 supporter, you may argue that EADS North America can price more aggressively because it's not offering a paper airplane. The point is, both sides agree it can happen. Sooo...
2. What if Boeing decides NOT to protest?
No matter who wins the KC-X contract the losing bidder will file a protest. That seems to be the widely accepted and perhaps forgiveably cynical viewpoint about the tanker competition. But let's consider, for a moment, the facts.
The previous contract award was overturned by the US Government Accountability Office because the air force made a critical error. After specifically informing Boeing that aircraft size was not a factor in the evaluation, the air force awarded the contract to the then-Northrop Grumman/EADS KC-45 and cited the aircraft's larger size as the reason. According to the GAO, that's not fair.
It may be a lot harder to make that case this time, notwithstanding the mail switcher-oo blunder by the air force in November. It's very clear that this competition is a price shoot-out. To win a protest on similar grounds as the previous case, the losing bidder may be forced to argue the air force decided to buy the most expensive aircraft because it was the most expensive. That seems like a hard-sell.
Of course, there are other considerations. If there is evidence of wrongdoing (remember Darleen Druyun?), that will be automatic grounds to sustain a protest. It's still not clear if the botched shipment by the air force could be a factor. Finally, filing a protest simply as a stalling tactic is possible -- as long as the contractor doesn't mind really offending its biggest customer.
3. What if Congress refuses to approve funding for the KC-X program?
KC-767 supporters may argue that appropriating funds for the KC-45 steals jobs from Americans and rewards a world trade-scofflaw for undermining US competitiveness. KC-45 supporters may argue that EADS North America will be creating thousands of jobs, and revitalizing domestic competition for large commercial aircraft. The point is, Boeing's supporters in Congress may seek to ensure that EADS doesn't win, even if Boeing loses. This would then become a test of political strength. If Northrop was still involved, I'd consider it a fair fight. With EADS standing alone, I'm not so sure.
4. What if Congress, as a compromise, requires the air force to buy both?
This is maybe the biggest what-if of them all. It probably isn't possible until after the retirement of Secretary of Defense Robert Gates, an outspoken opponent of a split-buy deal. But such a compromise would probably not be reached in the immediate future anyway.
If there's anything we have learned about the KC-X competition, it is certainly this: Anything can happen.
1. What if EADS wins the KC-X contract by under-bidding Boeing?
If you're a KC-767 supporter, you may argue disproportionate subsidies gives Airbus an unfair commercial advantage. If you're a KC-45 supporter, you may argue that EADS North America can price more aggressively because it's not offering a paper airplane. The point is, both sides agree it can happen. Sooo...
2. What if Boeing decides NOT to protest?
No matter who wins the KC-X contract the losing bidder will file a protest. That seems to be the widely accepted and perhaps forgiveably cynical viewpoint about the tanker competition. But let's consider, for a moment, the facts.
The previous contract award was overturned by the US Government Accountability Office because the air force made a critical error. After specifically informing Boeing that aircraft size was not a factor in the evaluation, the air force awarded the contract to the then-Northrop Grumman/EADS KC-45 and cited the aircraft's larger size as the reason. According to the GAO, that's not fair.
It may be a lot harder to make that case this time, notwithstanding the mail switcher-oo blunder by the air force in November. It's very clear that this competition is a price shoot-out. To win a protest on similar grounds as the previous case, the losing bidder may be forced to argue the air force decided to buy the most expensive aircraft because it was the most expensive. That seems like a hard-sell.
Of course, there are other considerations. If there is evidence of wrongdoing (remember Darleen Druyun?), that will be automatic grounds to sustain a protest. It's still not clear if the botched shipment by the air force could be a factor. Finally, filing a protest simply as a stalling tactic is possible -- as long as the contractor doesn't mind really offending its biggest customer.
3. What if Congress refuses to approve funding for the KC-X program?
KC-767 supporters may argue that appropriating funds for the KC-45 steals jobs from Americans and rewards a world trade-scofflaw for undermining US competitiveness. KC-45 supporters may argue that EADS North America will be creating thousands of jobs, and revitalizing domestic competition for large commercial aircraft. The point is, Boeing's supporters in Congress may seek to ensure that EADS doesn't win, even if Boeing loses. This would then become a test of political strength. If Northrop was still involved, I'd consider it a fair fight. With EADS standing alone, I'm not so sure.
4. What if Congress, as a compromise, requires the air force to buy both?
This is maybe the biggest what-if of them all. It probably isn't possible until after the retirement of Secretary of Defense Robert Gates, an outspoken opponent of a split-buy deal. But such a compromise would probably not be reached in the immediate future anyway.
If there's anything we have learned about the KC-X competition, it is certainly this: Anything can happen.
Recent Comments