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Friday, March 4, 2011

EADS KC-X Debriefing Spanned Two Days

The U.S. Air Force’s debriefing for losing KC-X bidder EADS North America spanned two days to allow the service to follow up on some items with the contractor, according to a program official.
The company’s debriefing on its loss wrapped up with a session March 1, the official says. It began with a 90-min. session Feb. 28.
A little-known fact about the debriefing process is that the government can keep the session open in the event a bidder has additional questions. This was the process used Feb. 28, and final issues were addressed the next day, the program official says.
Typically, the companies take the position that the clock for a protest runs out five days after the debriefing, when they are made aware of how the government performed its source selection. However, this is an issue of debate and the legal merits of the arguments on this matter would be handled by the U.S. Government Accountability Office (GAO) in the event a protest is lodged.
Either way, the likely deadline for a protest is March 7, according to David Van Buren, Air Force acquisition chief.
Gen. Norton Schwartz, Air Force chief of staff, says “I trust” that the companies involved in KC-X will “respect the decision” and “allow it to proceed unimpeded.” He made his comments March 2 at a conference in Arlington, Va., hosted by Credit Suisse.
“It is ugly history and so we worked diligently with extremely professional and competent offerors to make sure that this time we did it properly,” he adds.
He acknowledges that EADS is “entitled” to protest, and he notes there is “not payback on these kinds of things” with regard to future access to the U.S. defense market if they do. Some analysts suggest EADS would hold back on a protest at the risk of offending a major customer. “The process is much too pristine” for a bias of that sort, Schwartz says.
However, the tanker decision raises a larger question about perceived access by European manufacturers to the U.S. defense market. In recent years, an Italian design won the Marine One helicopter program, only to be scrapped owing largely to government squabbles over requirements. And Alenia’s grip on a once-robust C-27J buy loosened when the Air Force took over the program and truncated it, dashing the company’s plans to build a stateside final assembly facility.
Now, with the latest KC-X selection, EADS has lost to Boeing, quashing its hopes for a U.S. final assembly plant in the near term. Though these decisions were made individually on their merits by the Pentagon, some analysts wonder whether European contractors will begin to sour on the notion of doing business with a fickle Defense Department.
Schwartz says simply that “We are going to go where the best value resides,” indicating that non-U.S. designs are still welcome for consideration. The Boeing selection, he says, “is about the best deal.” Boeing won the $3.5 billion fixed-price development contract Feb. 24. The company is expected to deliver the first 18 KC-46As for operational use in 2017. Air Force officials acknowledged March 1 the contract was signed with Boeing; the company declines to say whether work has begun (Aerospace DAILY, March 2).
A Northrop Grumman/EADS North America team won a $1.5 billion development contract for four testing aircraft in 2008; that decision was overturned after Boeing launched a protest with GAO and procurement missteps came to light.
Meanwhile, the government and Northrop/EADS still have not reached a legal agreement on that canceled contract. The Air Force placed a substantial payment on the first KC-45A.

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