Air force moves to prevent Airbus/Boeing WTO dispute from influencing outcome of 179-aircraft KC-X deal

The US Air Force's KC-X tanker replacement saga continues, with the service releasing changes to its draft request for proposals (RFP) to meet demands that the competition be fair. The latest changes are intended to prevent the trade dispute between the USA and Europe over subsidies for Airbus and Boeing affecting the contest.

The USAF has delayed release of its final RFP from mid-December to the end of January to give bidders time to review the changes, but still intends to award a winner-takes-all contract for the initial 179 replacement tankers late next year. Boeing plans to offer the KC-767 or KC-777, while Northrop Grumman is teamed with EADS North America to offer the KC-330, based on the Airbus A330.

Originally, the air force asked bidders for information on the potential impact on their proposals of the World Trade Organisation dispute over government subsidies for commercial aircraft. This was viewed as favouring Boeing because, if the USA wins its case, any sanctions levied against Europe would increase Northrop's costs.

The revised draft RFP says any penalties or costs associated with sanctions or enforcement actions resulting from the subsidies dispute will not be included in the negotiated price or be an allowable change against the contract. This is intended to level the playing field by removing any potential WTO-related costs from all bids.

In revising the draft RFP, the USAF has mandated that bidders comply with federal regulations requiring all speciality metals used in the aircraft, including titanium, to be smelted in the USA. This will require Airbus, as supplier of the basic A330 airframe to be converted to a tanker in the USA by Northrop, to comply with the same rules as Boeing.

With the revised draft scheduled to be released late last week, it is still unclear whether the final RFP will prompt Boeing to offer the KC-767, which is smaller than the KC-330, or the KC-777, which is larger. Observers believe the decision will depend on how much emphasis the final KC-X requirement places on additional cargo and passenger transport capabilities.

Source: Flight International