GAO faults USAF for basic errors on tanker contract award

Washington DC
Source: Flightglobal.com
This story is sourced from Flightglobal.com

Basic lapses in acquisition procedures, revealed in a 67-page document released on 25 June, caused the US Government Accountability Office to uphold eight of Boeing's complaints about the US Air Force award of the KC-X tanker contract to Northrop Grumman.

Perhaps to the dismay of Northrop's supporters, the GAO's redacted record documenting a decision that could strip Northrop's transatlantic team of a landmark $35 billion contract offers nothing to support accusations of protectionist bias. Conversely, the report also finds no fault with the USAF's determination that the Airbus A330-200-based KC-30B is a better tanker, improving on the oldest tankers by an 11% better margin than Boeing's KC-767A.

The basis for the GAO's decision is perhaps best revealed in the agency's roots as an accounting service, and as one that applies a rigorous formalism to the conduct of a fair acquisition process.

The GAO document repeatedly blasts the USAF's methodology, saying it is not enough for the USAF's selection team to merely choose a proposal they perceive as superior. That is, it is not enough unless the justification for the decision is grounded in the evaluation criteria set down when a competition begins.

In several important ways, the USAF's selection process deviated from this basic standard acquisition procedure, the GAO says.

Most significantly, the USAF informed both competitors at the outset that no extra credit would be given to the aircraft that carried the most fuel, then selected the KC-30B largely on that basis.

Even if it is true that the KC-30's greater payload volume makes the aircraft a better tanker, the GAO says, the USAF bears the responsibility for making that key discriminator known to both competitors from the beginning.

"Had Boeing known of the agency's desire for a larger aircraft that can carry more fuel, it likely would have offered the agency an aircraft based upon the 777 aircraft platform," the GAO report says. "The air force could have provided for unbounded consideration of the degree to which offerers exceeded the fuel offload versus unrefuelled range, but did not."

Other problems with the USAF's selection process involved basic omissions and errors that tilted the contract award to Northrop, says the GAO.

For example, the A330 is limited by flight-control software to a maximum speed of 330kt (610km/h), which falls short of the minimum speed that the USAF requires to conduct a so-called "overrun" manoeuvre.

Northrop first responded to this shortfall by advising the USAF to change its manoeuvre speed, but lost the argument, the GAO reports. The USAF then accepted Northrop's claim that the A330 already safely achieves higher speeds in dives. The GAO noted that a commercial aircraft's maximum operating speed applies to any regime of flight, but the USAF evaluator was unaware of this.

In another example, Northrop's proposal failed to explicitly account for a requirement to supply the first two years of organic depot support, despite repeated warnings by the USAF about the omission. Nevertheless, the USAF accepted Northrop's reply that it was simply an oversight.

Paul Meyer, Northrop's vice-president for the KC-30B, says: "We actually gave a larger commitment to the air force - irrespective of time - that we would be there when they needed the capability."

But the GAO is not convinced by this argument. "We find that it is far from clear whether or not Northrop Grumman's proposed schedule establishes that it would perform these services within the two-year timeframe," it says.

The USAF and the Department of Defense continue to think about their options for responding to the GAO's non-binding recommendations, which, if followed, would reopen the contract to new bids. Defence secretary Robert Gates says: "I haven't made any decisions yet. But I take the GAO report very seriously. They clearly pointed out some areas where we were deficient."