Northrop Grumman is publicly pressuring the US Air Force to make wholesale changes to a set of proposed rules for selecting the winner of the $35 billion KC-X tanker contract competition.
Northrop faults the USAF's draft request for proposals issued on 24 September for three major changes to the selection criteria compared with the original competition, which the company won before Boeing successfully protested.
The USAF had prized a multi-role "game-changer", but now wants to buy a tanker closely modelled on the existing KC-135R; second, the fixed-price strategy fails to address the impact of potential delays and cost overruns; finally, a "best value" approach that trades price and performance is dispensed for a method that is "tantamount to a price shoot-out", says Mitchell Waldman, a Northrop vice-president of business development.
© Northrop Grumman
What impact the changes will have on Northrop's competitive position is difficult to say. The USAF requires both contractors to meet all of 373 mandatory requirements, with each receiving equal weight. Northrop complains this process makes the requirement for providing the lavatory's potable water no less important in the final evaluation than fuel capacity.
The minimum requirements are based on the existing KC-135R, another annoyance for Northrop. "If you were able to build a new KC-135 today," says Waldman, "technically, it would win the competition." USAF officials have noted that they are also asking for the tanker to receive fuel, which will make the KC-X tanker superior to the KC-135R.
In theory, a bidder could win the contract by simply proposing the lowest price. The USAF has identified 95 bonus requirements above the 373 minimum thresholds, but these are only considered if the two teams submit bids with the same evaluated price.
Even then, the USAF will pay only 1% of the contract's total value for more performance than the KC-135R already provides.
Northrop's side is clearly concerned about the USAF's new emphasis on price. Its KC-45, formerly KC-30, is a modified Airbus A330-200. The competitor, Boeing, can choose between the KC-767 or the KC-777, with the former a smaller and potentially less costly option to the KC-45.
Moreover, KC-45's key advantages over the KC-767 - greater fuel offload and range - could be negated by the new evaluation criteria.
Northrop, however, refuses to say if it will boycott the competition if the USAF declines to adjust the evaluation criteria. Asked if the KC-45 team believes winning the contract is possible under the current rules, Northrop vice-president Bill Welser dodged a direct reply. "We can design an aircraft that meets the requirement," he says.
For its part, Boeing is continuing to discuss the draft RFP with USAF officials privately. "Our preference is to allow the process to play out rather than work the requirements through the media," it says.