There is a new era in military aircraft procurement with new rules and customs, which contractors will ignore only at grave peril.
Nothing illuminates the essential characteristics of this new era better than the Government Accountability Office’s stinging and even humiliating rejection of Boeing’s protest at the US Air Force’s decision to award the long range strike-bomber (LRS-B) contract to Northrop Grumman a year ago.
Despite the partially classified and proprietary report’s omissions – FlightGlobal counted more than 700 redacted lines and 103 uses of the word “DELETED” – the GAO’s newly-released decision offers valuable instruction for competing in this new era.
Most importantly, do not assume a better design will beat lower cost. The most surprising revelation in the report is how the USAF structured the LRS-B competition. It may be the first time it has acquired a combat aircraft based on a lowest-cost, technically compliant bid. As in the restructured KC-X tanker competition, the USAF awarded no credit for design features that exceed the minimum requirements. But that was for a support aircraft, the LRS-B is a frontline combat system.
Secondly, do get your facts right. It is fair to say that Boeing did not like how the USAF evaluated both proposals on cost. Boeing quibbled over which historic programmes should be used as the baseline to forecast production costs on LRS-B. According to the GAO, Boeing submitted cost data based on derivative programmes, but the USAF preferred clean-sheet aircraft developments. Boeing sent the USAF a rebuttal, but apparently used inaccurate labour cost data, which, the GAO passive-aggressively notes, “did not enhance the credibility of Boeing’s estimate”.
Also, do not expect a military customer to front all of the development cost. Northrop heavily invested corporate funds in classified risk-reduction efforts, a fact the GAO says played a key role in reducing the USAF’s estimated price for its proposal. As bidders line up for a host of new USAF contracts, upfront investments by contractors are essential.
Finally, do recognise that GAO protests are not what they used to be. A decade ago, the GAO sustained multiple protests against contract decisions made by sloppy or misguided military acquisition officers. Those days appear to be over.
Despite Boeing’s multiple objections, the GAO laid out a clear case that the USAF stuck to the letter and spirit of the evaluation procedures.
Source: Flight Daily News