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EADS says tanker's flight test should help contract bid

Statement is the latest in a prolonged campaign of advertisements, news releases and public statements by two global competitors for what could be a $50 billion deal.

As the long overdue competition for the new Air Force tanker moves through what should be the final stages, the chairman of the North American unit of the European aerospace firm EADS, Ralph Crosby, insisted Tuesday that the real value of its Airbus A330-based refueling aircraft was not being given proper consideration.

Crosby said he was not complaining or setting the stage for a protest in case EADS loses to Boeing, but he said during a morning news briefing that the proven capability of its KC-45, two of which are flying, greatly reduces the risk that the Air Force will not get the capability it needs.

Crosby's statement is the latest in a prolonged campaign of advertisements, news releases and public statements by the two global competitors for what could be a $50 billion contract for the initial phase of the tanker replacement. With hundreds of additional aircraft expected to be purchased in later competitions, the tanker program is one of the biggest defense deals during a time of expected lower defense budgets.

Crosby repeatedly noted that Boeing had yet to deliver any of its 767-based tankers or to demonstrate many of the capabilities required in the contract bids. He announced that one of EADS' KC-45s transferred fuel at 1,200 gallons a minute to another of its tankers, meeting one of the key requirements.

While that transfer was performed with the tanker's boom, EADS also has demonstrated repeatedly that it can refuel fighter aircraft with its wing-mounted hose and drogue, he said, while asserting that Boeing has yet to conduct a drogue transfer.

The way the competition has been framed, with a fixed price incentive bid, puts most of the financial risk on the contractors, Crosby said. But, he asked, "What about the risk to the warfighter of nonperformance" by the winner?

Although the larger-bodied A330 is expected to be more expensive than Boeing's 767, Crosby insisted that the Airbus's larger fuel load actually makes it 15 percent to 44 percent cheaper to deliver fuel at various distances from its base.

Crosby's on-the-record briefing during the Air Force Association's conference at the National Harbor convention center followed a background discussion by a Boeing official.

Neither of the two officials was willing to say they were prepared to offer a lower price than their initial bids. But they said that the evaluation process normally provides for a "final proposal revision" and that they expected that to occur this time.

Both said a revised price could be higher or lower, because the contract decision is based on "evaluated cost," which considers factors other than cost per aircraft.

Neither of the officials could predict when a contract award would be made, noting that the expected date has been variously described as mid-November or later.

The Boeing official said the Air Force, aided by the Pentagon's top acquisition office, had been submitting evaluation notices, which are questions on details of the bids. He would not provide any details of the kind of questions being asked, but said he thought the evaluators were doing a "very thorough, professional job."

The Air Force has been trying to replace its 50-year-old KC-135 tankers for more than a decade. A team of EADS and Northrop Grumman won an earlier competition, but that was canceled when the Government Accountability Office supported a Boeing protest. Northrop Grumman has since dropped out.

While politics is not supposed to be part of the contract evaluation, the competitors have encouraged rival bands of lawmakers, with Boeing's supporters mainly in the states of Washington and Kansas, where most of the tanker work would go, and EADS's backers mainly in Alabama where it promised to build a manufacturing plant to do final assembly of the KC-45.