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Friday, February 25, 2011

Boeing Wins Restaged U.S. Air Force KC-X

Overturning its previous selection, the U.S. Air Force has selected Boeing to supply its KC-X replacement aerial-refueling tanker. The company has been awarded a $3.5 billion fixed-price incentive contract for development and delivery of the first 18 of a planned 179 767-based NewGen tankers to replace U.S. Air Force Boeing KC-135s.
EADS North America, with Northrop Grumman as prime contractor, won the first KC-X competition in February 2008 with the KC-45A, based on the Airbus A330-200 and similar to the KC-30 multi-role tanker/transport under development for Australia. The program was halted in September 2008 after a Boeing contract protest was upheld.
The Air Force restarted the KC-X competition in July 2010, issuing a new request for proposals (RFP) that simplified the requirements, clarified the selection criteria and reduced the financial risks to the winner. The changes were made in a bid to prevent the protests that derailed the first competition.
Boeing revised its approach after losing the first competition, dropping plans to develop an aircraft combining elements of several different 767 models and basing its “NewGen” tanker bid on a 767-200 equipped with an upgraded KC-10 refueling boom and 787 cockpit displays. The company said its price would be lower the second time around.
EADS North America stayed with its winning KC-45 design, but entered the new competition as prime contractor after Northrop withdrew from the role in March 2010, arguing the revised RFP “clearly favored a smaller tanker.” EADS’s decision to lead the bid itself likely allowed the company to reduce its proposal price.
The Air Force substantially revamped its source selection process after the Government Accountability Office (GAO) upheld Boeing’s protest over losing the 2008 competition to Northrop Grumman and EADS. The GAO ruled the Air Force did not properly assess the relative technical and operational merits of the rival tankers.
The new RFP simplified the specification to 372 mandatory pass/fail requirements the proposals had to meet to be considered. Proposed prices were then adjusted by the Pentagon based on assessments of operational effectiveness and ownership cost. Only if the resulting total evaluated prices were within 1% of each other would the Pentagon then consider each proposal’s ability to provide additional capabilities.
A long-shot bid from U.S. Aerospace, offering a variant of the Ukrainian Antonov An-70, was rejected after it missed the deadline to submit a proposal. The company’s protest was dismissed by the GAO in November 2010.

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