Boeing's KC-45 Protest:That Dog Won't Hunt Part III

Boeing is trying to make a lot of hay in their ‘serial-protests’ about the AF 'improperly' crediting capability to the KC-45 that comes from its ‘larger’ size. The AF even got called in to testify about it this week by Boeing's Bagmen, and Former Spook did a good 'quick and dirty' post on the 'show'.
Boeing alleges that there was supposed to be no credit for exceeding key performance parameter (KPP) objectives and therefore the extra capability that comes from the KC-45 should not have been a factor in the scoring.

Are they correct? In a word: NO!

Their claim is based upon a fallacy: the latter (“extra capability shouldn’t count”) does not spring forth from the former (“exceeding KPP parameters do not get credit”). Seem counter intuitive? Only if you didn’t read the RFP and/or equate the KPPs with ‘all that is important’. Could and should Boeing have known the difference? Only if they actually read the RFP (My comments in [brackets] and relevant passage emphasis is mine.):

2.2.1 Subfactor 1: Key System Requirements Within this subfactor the Government will evaluate the proposal to determine that the offeror understands and has substantiated the ability to meet the requirements delineated in the SRD, except for the logistics requirements addressed in the Product Support section (Subfactor 3). All commitments to address at some level, meet, or exceed SRD requirements must be specifically reflected in the offeror's proposed system and aircraft specifications.

2.2.1.1 The requirements associated with the areas set forth in paragraph 2.2.1.2 below will be evaluated under this subfactor. The evaluation will be accomplished as follows:

a. All KPP thresholds in 2.2.1.2a through 2.2.1.2d below must be met. [Now, here comes Boeing’s basis for their big argument against how the proposals were scored in reference to size and capability…] Depending on substantiating rationale, positive consideration will be provided for performance above the stated KPP thresholds up to the KPP objective level. [And here comes Boeing's 'money shot'!] No consideration will be provided for exceeding KPP objectives. [Now immediately following Boeing’s ‘ace’ comes the HUGE 'but' they’re trying to keep people from noticing
because it cuts the legs off their case…] If there is no stated objective and, depending on substantiating rationale, positive consideration will be provided when the specified capability above the KPP threshold is viewed as advantageous to the Government.
[The RFP now goes further to elaborate on this in discussing ‘trade space’: the opportunity for offerors to optimize their proposed capabilities…]
b.All SRD requirements in paragraphs 2.2.1.2a through 2.2.1.2e below that are notKPP thresholds are desired, but are considered part of the offeror's design trade space. For non-KPP requirements, the Government may give consideration for alternate proposed solutions or capabilities below the stated SRD requirement, depending on substantiating rationale. The Government may give additional consideration if the offeror proposes to meet (or exceed if there is an objective) the SRD threshold or requirement, depending on substantiating rationale.

c. Within each of the paragraphs, 2.2.1.2a through 2.2.1.2e below, evaluation of the offeror's proposed capabilities and approaches against the SRD requirements will be made in the following descending order of relative importance: KPPs, KSAs, and all other non-KPP/KSA requirements.

d. For paragraph 2.2.1.2 e below, a collective assessment will be made for all the related SRD requirements therein.

2.2.1.2 The Government will evaluate the offeror's approach to meet SRD requirements as follows:

a. Aerial Refueling: The Government will evaluate the offeror's approach to meeting requirements related to aerial refueling. This evaluation will include: tanker aerial refueling, receiver aerial refueling, fuel offload versus radius range, drogue refueling systems (including simultaneous multipoint refueling), the operationally effective size of the boom envelope, the aerial refueling operator station and aircraft fuel efficiency.

b. Airlift: The Government will evaluate the offeror's approach to meeting requirements related to airlift capability. This evaluation will include: airlift efficiency, cargo, passengers, aero-medical evacuation, ground turn time, and cargo bay re-configuration. The offeror's airlift efficiency will be normalized against the KC-135R airlift efficiency calculated with the same ground rules. An offeror's airlift efficiency value greater than 1.0 will be viewed as advantageous to the Government.

c. Operational Utility: This evaluation will consist of an assessment of the contractor's approach to meeting the requirements relating to operational utility, including the following: aircraft maneuverability, worldwide airspace operations, communication/information systems (including Net-Ready capability), treaty compliance support, formation flight, intercontinental range, 7,000 foot runway operations, bare base airfield operations, and growth provisions for upgrades.

d. Survivability: This evaluation will consist of an assessment of the contractor's approach to meeting the requirements relating to survivability, including the following: situational awareness, defensive systems against threats, chemical/biological capability, EMP protection, fuel tank fire/explosion protection, and night vision capability.

e. Other system requirements: The Government will evaluate the proposed approach to address all SRD requirements not in a, b, c or d above or in Subfactor 3.

Boeing’s argument that the advantage in KC-45 capability should not be counted is specious. I have to believe they know it is specious, since the information showing it to be false begins in the very next sentence after their protest ‘hook’.

So now we have eliminated the ‘size’ issue from the capability grading standpoint. Next we start talking relative sizing. Homework reading assignment: how do airlines around the world view the A330 airframe vis a vis B767? Are they 'really' THAT different?

WHAT Military-Industrial Complex?

This is a general reference post that will provide a link that I'm going to send to every moron out there that thinks Eisenhower's oft-cited quote still applies and who then throws it out as a general purpose anti-defense spending rationale.

Here is a chart of the 2007 Fortune 1000 companies with defense and commercial revenues color coded:

OK, it's kind of hard to tell from that view. let's look a little closer:

Well that's better, but it still is kind of hard to find that big ole' complex that' MUST BE hiding in there. Let's look at just the top 250 companies, then I bet that evil Military-Industrial Complex will fairly leap out at us :

Dang. Where'd it go?

Congress Causing High Gas Prices: Asks Oil Companies Why

I actually prepared this a while back for a friend at work who begrudges the oil companies their profit. Every time the quarterly earnings come out we get treated to the despair over the oil company profits by our more Socialist leadership 'leaders'. Did you ever wonder why 'oil profits' are never presented in any context, but always in raw numbers without any frame of reference? I made the chart below just for those out there who can't grasp just how big 'big oil' is. This is a graphic view of the 2006 profitability of the 2007 Fortune 1000 companies.

That's right: Exxon Mobile is only a 'mid-performing company, making about 11 cents profit off every dollar it takes in. It's just a freaking HUGE mid-performing company.

Now all we have to do is get Congress to stop pandering to the Enviros and the rest of the far left, and we can lower prices at the pump AND improve the bottom line for Exxon etal.

Boeing's KC-45 Protest:That Dog Won't Hunt Part II

Ah! Another ‘redacted’ summary is out? Mmmmmmmm. Must get one.

"We continue to update and expand our protest," McGraw said during an April 3 teleconference in which he walked reporters through a 13-page redacted summary of the updated protest. "As the team discovers things, they're going back and adding to the supplemental protests."

He said some of the protest points are being expanded and clarified as more information from Northrop's proposal and the Air Force's decision-making process is revealed to Boeing's protest team. In the additional documents, Boeing continues to argue that the air service's concerns about boom safety and maturity and "Northrop's very complex build plan" and "risky" schedule should have lowered their competitor's score further than it actually did.

Boeing also argues that costs were not accurately compared. "It seems like a lot of our commercial data was not accepted, our fixed-price data was not accepted as fixed," McGraw said. But Northrop's data was more readily accepted in spite of "grossly understated" military construction costs, he said. "In general, there seems to be a significant leveling of costs at the 11th hour."

Let me predict what the revised (expanded?) protest says. I tried outlining the last ‘summary’ and got tired of writing:

Wrong size!
Changes made!
Penalized for commercial costs!
Graded us too hard!
Graded them too easy!

Over…. and over…… and over……

So I'm guessing it's just more of the same [ note: I checked: it is --- except it has that freshly 'lawyered' smell.]

I smacked Boeing down on the heart their ‘commercial cost’ claim in the original summary here. This is not to say that Boeing won’t find a sympathetic ear someplace because the FAR DOES allow the contracting official some leeway in determining if something Is ‘commercial’ or modified to the point that DoD-grade cost/price data is necessary. Some second-rate, second-guesser COULD disagree with the responsible acquisition official, but in a proper review that wouldn’t be enough to uphold the protest. Boeing is ‘piling-on’ in the hopes of getting enough ‘second-guessing’ going to provide their helpmates in Congress do that voodoo that they ‘doo’ (not a typo).

They have two other 'cost' issues having to do with 'learning curves' and O&S estimates (click to enlarge):

Now, the 'learning curve' disagreement has to do with mandating credibility. Can Boeing DEMAND its Customer believe their numbers? Is it Boeing's position that the Customer's analysis CAN'T be right?
In reality, all that is important to the legality and propriety of the contract award is that the AF has a reason for not believing the 'learning curve' number or believing in their own estimation more.

The O&S costs claim is probably the most overtly specious argument Boeing makes in the original protest summary. It is quite common knowledge in the logistics field that the most important support driver of any aircraft weapon system is HOW it is used. Boeing's insistence that Delta Tech Ops has more insight into Tanker O&S costs than that provided by the fleet of KC-135Rs is ludicrous. As old as the Rs are, their avionics and propulsion systems are closer to the age and technology of the 767 design than Boeing would like to acknowledge. Since avionics and engines are typically the major cost drivers on non-LO aircraft, I would prefer using KC-135R data over a predicted 767 extrapolation from civilian operations as well. The only part of the KC-135R supportability that probably wouldn't translate easily is the heavy structures contribution: something the AF should be able to factor for quite easily from their own experience. It is really hard to tell if this complaint is just 'piling on' or actually a manifestation of Boeing's hubris.

Boeing is still playing heaviliy with the scoring system inside their Disinformatsia campaign. What they’re doing is siimply “oversimplifying to obfuscate” . For example, In the original protest ‘summary’ they show this (click to enlarge):

Which means absolutely nothing without the weighting factors for each area, difficulty or ease in improving (risk) in each area, OR relative scores in each area.
For example, the 5 NG so called ‘Weaknesses’ could have been in the least important requirement in 5 different sections and each might require very little effort to change or correct.

The 13 Boeing ‘Major Discriminators’ could have been for the 13 least important factors and NGs 12 ‘Major Discriminators’ could have been the top 12 weighted factors. The ‘lessor [sic] discriminators’ for each contractor could have all been very close to each other for each line item.

Now did it happen exactly that way? Probably not. But it happened close enough to this way for the AF to select NG for the contract.

Boeing doesn’t like their score. Boo Hoo. Help them Congress(not)!

When I get to Part III, I want to get past the ‘grading’ issue and get on to the ‘size’ issue because I’m getting really tired of Boeing’s misrepresentation of how the candidates match up, including the one Boeing didn’t even bid, but keeps talking about: the B777.

KC-45 Protest: Boeing Backing Off?

Flash:

The GAO just:

"denied motions filed by Northrop Grumman Corporation (NOC) and the United States Air Force calling for a partial dismissal of Boeing Corporation's protest of the Air Force decision in the KC-45 Tanker acquisition process."

Why, pray tell?

"The denials came after a supplemental filing by Boeing Corporation that streamlined its original protest and eliminated many of the elements that were central to the Air Force and Northrop Grumman motions"

Ohhhhh.

OK, so what's left?

Update: Well, NOW Boeing claims it DIDN'T 'narrow' the protest. Riiight.

KC-45 Protest: CATO's Friedman Off Target- Collateral Damage Occurs

I found this at the faux blog "tankerblog.com" (I don't link to fakes) and it kind of tickled me a little bit because tankerwar were quite effusive in their praise for those zany Libertarians they don't quite understand. Those boys at tankerblog covered a bit of territory in citing Mr. Friedman: cherry picking a lot of stuff out of the 'CATO blog' piece including at least one erroneous assertion . Funny, the one thing the Boeing shills at tankerblog didn't mention was this part:

The Air Force says EADS’s tanker is better than Boeing’s. I believe them. It would be reckless to choose an inferior product given the likely protest from the loser and what happened in 2004.

Which of course, is immediately followed by something stupid:

But while getting the best plane for the least money is essential, when it awards contracts, the Pentagon should be able to consider their effect on the political landscape, because that landscape drives future contracts.

First: Like politics never happens already? (Funny!)
Second: Are you sure you are a Libertarian Mr. Friedman?

I may destroy the pieces that tankerbog selected for their spin later. Right now I have better things to do.

In the meantime, enjoy Richard Aboulafia's thoughts on the situation, as they are far more lively and cogent than the CATO piece.

KC-45 Win: Not a 'Foreign' First

I've run into a lot of buzz on the internet where people were bemoaning a 'foreign' aircraft winning the KC-X competition. I even read someone's comment wondering what the past leaders of the AF, the 'Founding Fathers of Airpower' as it were, would think about the US NOT selecting the American competitor when given the chance. One does not have to wonder: they did it first.

The KC-45 win is at least the second time this has happened with a United States military aircraft program. The first was the Canberra, fielded by the US as the B-57. There is a lot of B-57 history that is glossed over or ignored in this country, possibly due to the ‘Cold War era’ when it was fielded, and the circumstances of how Martin ended up building the B-57 as the last ‘loser’ standing in a A-26 ‘night intruder’ replacement competition.

The USAF was so impressed with the English Electric Canberra when they took their first good look at it in August 1950, they invited EE to compete for the A-26 replacement contract in early ‘51, which included a fly-off of sorts (not as extensive but certainly more dramatic than those we have today). The RAF loaned EE an airplane for the competition, which in coming to the US broke a trans-Atlantic speed record AND was the first jet aircraft to fly across the Atlantic unrefueled. In the flyoff, The B-57 beat the B-45 Tornado, AJ-1 Savage, Martin XB-51, and the Canadian Avro CF-100.

After the flyoff, the B-57 (then of course not yet called a B-57) was the hands down favorite: having performed all the required flight demonstration over Andrews AFB more quickly than the evaluators thought possible and then performing a few more displays of performance - all within the alloted time limit.

But the AF would not commit solely to the Canberra until the British MoD would certify that EE could make delivery to both countries on schedule. EE had an agreement in place to build 300 Canberras for the USAF pending MoD approval, and the AF ‘down selected’ to just the XB-51 and Canberra until the guarantee came through. When the UK MoD would or could NOT guarantee that USAF Canberras would be delivered to meet USAF schedule needs, the USAF still preferred the Canberra so strongly that it had a backup plan in place and arranged for a licensing agreement whereby an American company would build Canberras in the US.

Since Martin had been the 'runner-up' they got first shot at the plane. After Martin got their hands on two pattern aircraft (crashing one due to pilot error) and copies of all the engineering, they proposed SO many changes to it that it was almost unrecognizable. The AF had to practically force Martin to build it ‘to print’.

The changes that did come in the end we are mostly familiar with (tandem cockpit, 2-man crew), but most interesting is the rotary bomb bay concept/design: taken directly from the losing XB-51.

There you have it, a foreign competitor beating aircraft from two other countries including the domestic favorites: a plane that was so superior we HAD to have it even though then-little English Electric couldn’t build enough to spare us any. (However, EE did get a 5% royalty on every plane Martin built.)

References:
Canberra: The Operational Record by Robert Jackson, 1989, pp 113-114
English Electric Canberra by Barry Jones, 2006, pp 99-101
Update:
Found a resource today with a lot of the same info at the Glen L. Martin Maryland Aviation Museum website.

KC-45 Contract Protest: Counter Maneuvers

Reuters reports Northrop Grumman has filed a counter-protest:

Los Angeles-based Northrop said Boeing waited too long to raise its challenge of various issues related to the capability of the Northrop tanker and the Air Force's use of a complex computer model to assess the competing bids.

In addition, Northrop argues that Boeing's challenges to the Air Force's assessment of the companies' past performance, and the issue of government subsidies, were either not a proposal requirement or should have been addressed earlier.

Boeing also knew long before it filed its final proposal how the Air Force had increased its cost proposal and evaluated its proposed development schedule, Northrop said.

The Air Force is now seeking relief from Boeing's more 'strident' claims as well.

Spokeswoman Lt. Col. Jennifer Cassidy said the Air Force had filed the motion for partial summary dismissal of the Boeing protest, but declined to give any details.

"In order to protect proprietary information and respect the GAO protective order, we cannot provide further details," Cassidy said.

Perhaps the AF is getting a little tired of Boeing's PR insurgency while they must operate under strict 'rules of engagement'?

Boeing: making friends and influencing people.

Oh Yeah...

Aghhh! Hippies!

Here's a quick sidetrip from the KC-45 tanker battle. This was making the e-mail rounds among my military and defense worker friends today: Marines in Berkeley!
Everybody's first response was the same as mine: 'Jon Stewart?' or 'The Daily Show?'

- He must be working on his ratings.

There's quite an assortment of likely suspects in the above video.

Boeing's Disinformation Campaign Getting Noticed

Hey! I'm not the only one that noticed Boeing's proxies set up a fake blog shilling against the KC-45. Graham Warwick at "FlightGlobal.com" noticed as well.

Boeing's KC-45 Protest:That Dog Won't Hunt Part 1

Claim: Air Force Wrongfully "Rejected" Boeing's KC-X Cost/Price Data
After reviewing Boeing's 'executive summary' for public consumption, my initial impulse was to correspond on the most questionable of Boeing’s claims that I found within the protest. But after a short reflection on the matter, I decided to not let my distaste for Boeing’s business strategies reduce my efficiency in exposing potential misrepresentations. I decided if I set the low-hanging fruit aside, then others might address them and then I can link to those discussions while moving forward with the ‘harder’ and potentially more credible of Boeing’s complaints. As an aside, please note for future reference- I still expect to find SOME THINGS in Boeing's protest that cannot be proven or disproven without additonal information that may not be made available to the public.

Little did I know that the first complaint that I picked to analyze would turn out to be so relatively easy (albeit tedious) to defuse.

In Boeing’s ‘Executive Summary’ on page 3, we find that some of the most inflammatory rhetoric in the protest concerns the AF cost evaluation (Click on graphic to enlarge):




The ‘failed to comply with legal requirements’ factor is about the only thing that can get the GAO to uphold a protest, so is there any ‘meat’ later in the document to back up this complaint?
So IF the events transpired as described by Boeing (the magnitude of risk in this assumption cannot be ascertained) was the Cost Evaluator ‘right’ or ‘wrong’ in not accepting ‘commercial’ cost/price information for the ‘commercial’ part of the offer? Boeing expands on this complaint on page 15 of their ‘Executive Summary’:


Extracting the key information from the above:

"Accordingly, under the Federal Acquisition regulation, pricing of underlying commercial items and services must be based upon commercial pricing methodologies and need not be supported by detailed cost or pricing data normally relied upon in major weapons system procurements. See generally FAR Part 12."

Referencing ‘generally’ FAR part 12? Why not specific clauses? Well, let’s go to the source (source: Hill AFB Ogden ALC FAR website) .

[NOTE: I'm including a lot of irrelevant FAR content for transparency and perspective, but I'm highlighting what is important so you can skim or trudge through all of this - it's Reader's Choice!]

15.403-1 -- Prohibition on Obtaining Cost or Pricing Data (10 U.S.C. 2306a and 41 U.S.C. 254b).

(a) Cost or pricing data shall not be obtained for acquisitions at or below the simplified acquisition threshold

(b) Exceptions to cost or pricing data requirements. The contracting officer shall not require submission of cost or pricing data to support any action (contracts, subcontracts, or modifications) (but may require information other than cost or pricing data to support a determination of price reasonableness or cost realism) --

(1) When the contracting officer determines that prices agreed upon are based on adequate price competition (see standards in paragraph (c)(1) of this subsection);

(2) When the contracting officer determines that prices agreed upon are based on prices set by law or regulation (see standards in paragraph (c)(2) of this subsection);

(3) When a commercial item is being acquired (see standards in paragraph (c)(3) of this subsection);

(4) When a waiver has been granted (see standards in paragraph (c)(4) of this subsection); or

(5) When modifying a contract or subcontract for commercial items (see standards in paragraph c)(3) of this subsection).

(c) Standards for exceptions from cost or pricing data requirements --

(1) Adequate price competition. A price is based on adequate price competition if --

(i) Two or more responsible offerors, competing independently, submit priced offers that satisfy the Government’s expressed requirement and if --

(A) Award will be made to the offeror whose proposal represents the best value (see 2.101) where price is a substantial factor in source selection; and

(B) There is no finding that the price of the otherwise successful offeror is unreasonable. Any finding that the price is unreasonable must be supported by a statement of the facts and approved at a level above the contracting officer;

(ii) There was a reasonable expectation, based on market research or other assessment, that two or more responsible offerors, competing independently, would submit priced offers in response to the solicitation’s expressed requirement, even though only one offer is received from a responsible offeror and if --

(A) Based on the offer received, the contracting officer can reasonably conclude that the offer was submitted with the expectation of competition, e.g., circumstances indicate that --

(1) The offeror believed that at least one other offeror was capable of submitting a meaningful offer; and

(2) The offeror had no reason to believe that other potential offerors did not intend to submit an offer; and

(B) The determination that the proposed price is based on adequate price competition, is reasonable, and is approved at a level above the contracting officer; or

(iii) Price analysis clearly demonstrates that the proposed price is reasonable in comparison with current or recent prices for the same or similar items, adjusted to reflect changes in market conditions, economic conditions, quantities, or terms and conditions under contracts that resulted from adequate price competition.

(2) Prices set by law or regulation. Pronouncements in the form of periodic rulings, reviews, or similar actions of a governmental body, or embodied in the laws, are sufficient to set a price.

(3) Commercial items.

(i) Any acquisition of an item that meets the commercial item definition in 2.101, or any modification, as defined in paragraph (3)(i) of that definition, that does not change the item from a commercial item to a noncommercial item, is exempt from the requirement for cost or pricing data. If the contracting officer determines that an item claimed to be commercial is, in fact, not commercial and that no other exception or waiver applies, the contracting officer must require submission of cost or pricing data.

(ii) The following requirements apply to minor modifications defined in paragraph (3)(ii) of the definition of a commercial item at 2.101 that do not change the item from a commercial item to a noncommercial item:

(A) For acquisitions funded by any agency other than DoD, NASA, or Coast Guard, such modifications of a commercial item are exempt from the requirement for submission of cost or pricing data.

(B) For acquisitions funded by DoD, NASA, or Coast Guard, such modifications of a commercial item are exempt from the requirement for submission of cost or pricing data provided the total cost of all such modifications under a particular contract action does not exceed the greater of $500,000 or 5 percent of the total price of the contract.

(C) For acquisitions funded by DoD, NASA, or Coast Guard such modifications of a commercial item are not exempt from the requirement for submission of cost or pricing data on the basis of the exemption provided for at FAR 15.403-1(c)(3) if the total price of all such modifications under a particular contract action exceeds the greater of $500,000 or 5 percent of the total price of the contract.

So it appears Boeing’s case hinges on the definition of 'Commercial' in FAR 2.101. I highlighted the ‘modification’ subparagraphs above for reasons that will be revealed as we visit the FAR definition of “Commercial Items”. Again, I include extra information for perspective and transparency, but have highlighted only the relevant parts:

“Commercial item” means—

(1) Any item, other than real property, that is of a type customarily used by the general public or by non-governmental entities for purposes other than governmental purposes, and—

(i) Has been sold, leased, or licensed to the general public; or

(ii) Has been offered for sale, lease, or license to the general public;

(2) Any item that evolved from an item described in paragraph (1) of this definition through advances in technology or performance and that is not yet available in the commercial marketplace, but will be available in the commercial marketplace in time to satisfy the delivery requirements under a Government solicitation;

(3) Any item that would satisfy a criterion expressed in paragraphs (1) or (2) of this definition, but for—

(i) Modifications of a type customarily available in the commercial marketplace; or ii) Minor modifications of a type not customarily available in the commercial marketplace made to meet Federal Government requirements. Minor modifications means modifications that do not significantly alter the nongovernmental function or essential physical characteristics of an item or component, or change the purpose of a process. Factors to be considered in determining whether a modification is minor include the value and size of the modification and the comparative value and size of the final product. Dollar values and percentages may be used as guideposts, but are not conclusive evidence that a modification is minor;

(4) Any combination of items meeting the requirements of paragraphs (1), (2), (3), or (5) of this definition that are of a type customarily combined and sold in combination to the general public;

(5)Installation services, maintenance services, repair services, training services, and other services if—

(i) Such services are procured for support of an item referred to in paragraph (1), (2), (3), or (4) of this definition, regardless of whether such services are provided by the same source or at the same time as the item; and

(ii) The source of such services provides similar services contemporaneously to the general public under terms and conditions similar to those offered to the Federal Government;

(6)Services of a type offered and sold competitively in substantial quantities in the commercial marketplace based on established catalog or market prices for specific tasks performed or specific outcomes to be achieved and under standard commercial terms and conditions. For purposes of these services—

(i)“Catalog price” means a price included in a catalog, price list, schedule, or other form that is regularly maintained by the manufacturer or vendor, is either published or otherwise available for inspection by customers, and states prices at which sales are currently, or were last, made to a significant number of buyers constituting the general public; and

(ii) “Market prices” means current prices that are established in the course of ordinary trade between buyers and sellers free to bargain and that can be substantiated through competition or from sources independent of the offerors.

(7) Any item, combination of items, or service referred to in paragraphs (1) through (6) of this definition, notwithstanding the fact that the item, combination of items, or service is transferred between or among separate divisions, subsidiaries, or affiliates of a contractor; or

(8) A nondevelopmental item, if the procuring agency determines the item was developed exclusively at private expense and sold in substantial quantities, on a competitive basis, to multiple State and local governments.

Unless it is Boeing’s position that the modifications to the commercial B767 aircraft that turn it into their KC-X contender are ‘minor’, that turning the basic B767 airframe into a tanker does not "significantly alter the nongovernmental function or essential physical characteristics" or that the value of the minor modifications do not reach the threshold of ‘major’, or that they plan on selling the tanker to the general public, then they really don't have a very good case for insisting the 'commercial' part of their airplane is still commercial. It seems to me that there would be some wiggle room if the FARs did not expressly mention a dollar figure for modification limits on DoD programs. I can see why the contracting official determined he needed better-than-commercial price data that Boeing offered. It seems Boeing's position is that if a part of the end-item being procured wasn't modified, then they only needed to provide the commercial data for that part regardless of the total amount of modification to the end item.

It is therefore my considered opinion, that based upon the language of the protest and the FARs, the contracting official was performing due diligence in insisting upon proper cost/price data. This aspect of Boeing’s protest is probably Dead On Arrival at the GAO. In fact, from where I’m standing, it appears pretty frivolous.

It’s been about 20 years since I did the basic Acquisition Course, so there just might be something I'm missing on this-- so does anyone else see any merit to this particular Boeing complaint? If so, please point it out to me along with the relevant source material.

Northrop Grumman Disputes Boeing's V-22 Claim

Did Boeing Mislead Hugh Hewitt? Say it Ain't So!
My lunchtime reading lead me to this article where Northrop Grumman disputes Boeing's claim that the KC-45 won't be able to refuel the V-22:

In the protest, Boeing said the Northrop tanker had "significant shortcomings" including the inability to refuel aircraft like the V-22 Osprey. The Osprey takes off and lands like a helicopter, but flies like an airplane. Northrop director of business development Marc Lindsley said that claim was false.

"The Northrop KC-45 can refuel the V-22," he told Reuters.

The ability to refuel the V-22 was not a mandatory requirement in the bidding competition, according to industry sources.

Both the Northrop KC-30 tanker and Boeing's 767 tanker include a center refueling boom, hose and drogue refueling equipment on the wingpods, and a center-line hose and drogue.

A drogue is a system that allows the tanker to pass fuel into the receiving aircraft using a retractable hose. It differs from the boom system, which has a long pipe that hangs under the plane and mates up with the receiving aircraft.

But neither company has flight tested the center line hose and drogue that would be used to refuel the V-22s, which the Marine Corps is now using in Iraq, according to industry sources.

And with that last sentence in the quote, this article became the closest thing to 'the whole truth' published to-date in the mainstream media about either KC-X competitor's ability to refuel the V-22.

Hugh Hewitt: Sadly in the Tank For Boeing

Well, I sent the letter (excerpt below) to Mr Hewitt after his Mark McGraw Spinfest, and as you will see below the excerpt -- alas, it did no good.

I’ve been following this tanker competition and decision closely for a very long time and since February 29th have watched Boeing fling a stream of different complaints against the wall to see what will stick. Last week it was the ‘size’ issue. Yesterday it was ‘changes’ and a ‘Northrop Grumman model’ in the process. Today, besides a lot of misstatements that have already been slapped down in the trades (check the last three issues of Aviation Week for starters) Mr. McGraw introduced the V-22 issue (that is ‘new’ to the public BTW). It is interesting that he claims that the Boeing tanker can service anything including the V-22, when as point of fact, ALL new tankers have to be qualified to service the different aircraft and Boeing’s tanker (called ‘Frankentanker’ by some wag because it is a kluge of different 767 models that has never existed before) hasn’t even been built yet!. Mr. McGraw only believes the 767 can do the job based on analytical models and simulations. Nor has Boeing built any advanced refueling capability comparable to what is being installed on the Northrop Grumman KC-45. (interesting considering Mr. McGraw’s “critical military technology” claim eh?) Boeing took the position that if they won the contract, THEN they’d build a new system.

Boeing is playing two distinct and distasteful PR games: publicly playing the ‘grading’, ‘process’, and ‘critical military technology’ angles, while using proxies in the form of union hacks and hometown politicos to play the jobs/protectionist angle. There’s just so much wrong with Boeing’s two-pronged attack on the award, it makes me sick. I retired from the Air Force 15 years ago, and today, if I had Mr. McGraw within arm’s length I would have rubbed his nose up and down my bare sleeve so he could count the bumps that are still where my stripes used to be.

Please note, that while I have deep interests in Northrop Grumman, I’m also on record as generally preferring Boeing’s designs and products over EADS’, and that if anybody will make the EADS airframe a great plane – it will be Northrop Grumman.

For balance, PLEASE!- you simply MUST request an appearance by the KC-45 program manager. I’m sure Mr. Meyer will be only too happy to oblige. In the interim, I suggest you get a hold of some of the less ‘emotional’ trade publications for some perspective. If you are going to intelligently broadcast on the KC-45 contract,
you’re going to need more show prep.

Well I have found Hugh Hewitt generally tries to do the right thing on principle, I think this time he's standing way too close to some Boeing principals in which he has some misplaced trust. This demonstrates one of the most frustrating things about him for me: not having all the neccessary facts in hand rarely stops him from taking a position. Based upon his actions before the McGraw love-fest and after I sent the letter, I can only conclude he is obviously (and obliviously) in the tank for Boeing on this issue.

What actions are those?

Well first there's this opinion piece, that I hadn't read before yesterday's show that gives us some insight into his attitudes about the KC-45 contract going to Northrop Grumman. We see in it where he did his research: "I asked one friend within Boeing for an assessment of this argument". Gee, how biased could his opinion be? All kinds of interesting comments come afterwards. The thread starts out with echoes of Hugh and slowly over time the more factual posts start showing up.

After the interview ( I think he actually put it up before the show was over), Hugh had a red-meat post at his blog about the KC-45 tanker "not being able to refuel the V-22" but the 'Boeing tanker' allegedly can (stated as a certainty by McGraw). The comments for that post started out a little more skeptical of McGraw's claims, when a comment caught my eye: someone or something posting as 'Tankerblog' wrote:

Good Question Hugh!
Some good comments also, but some very poor ones.
The V-22 is used by SecOps folks so it operates on the tactical, operational, strategic level. Limiting a Combatant Commander's options for refueling the V-22 while not fatal is a concern as the services shrink and need more "Joint" assets.(Read about Desert One to see how bad things turn out when forced to do on-ground refueling.)
See http://www.tankerblog.com for more tanker issues.

Now the 'Desert One' reference alone could usually draw me in because I used to fly with guys who were cut out of that operation over a political decision to use Marine helos, but that's not what caught my eye this time of course: Who or what the f@$% was "tankerblog"? I visited the site (yawn) and then had to come back to HH's V-22 post to leave this comment:

Tankerblog: Boeing Protectionist Shill
See Hugh, this is exactly what I was talking about in the e-mail I sent you yesterday. Boeing has mobilized its army of 'America first' Airbus haters (on both sides of the political spectrum) as one prong of an attack, while they fling anything about the selection process they can distort or misrepresent against the wall to see what will stick as the other prong of the attack.

Tankerblog.com is just a bucket for spreading all the BS that legislators with vested interests in protecting Boeing's little tanker monopoly have set up. The 'Center for Security Policy' association at their website is a nice touch: except it is hardly unbiased. Or is "Dr. Charles M. Kupperman, Vice President, Strategic Integration & Operations, Missile Defense Systems, The Boeing Company" no longer on the board?

There's a lot of other Boeing twisted BS in some of the other posts as well. I'll just take the 'EADS hasn't built a tanker' trope for now. Y'see, this is a misrepresentation of what is actually a key advantage of the Northrop Grumman bid: The KC-45 team has already built a plane for this contract and Boeing is proposing a Frankentanker that is still on the tube (and is only PROJECTED to be able to refuel the V-22 -it is not proven). EADS is on or ahead of schedule with all it's existing tanker programs and Boeing is behind on all of theirs. Boeing didn't build a new boom system yet because they wanted to do it on the program dime - NG's boom is already flying.

People!: There's no such thing as corporate memory and the people that built the last Boeing tanker are dead or retired.

Now I guess the Boeing guy 'Kupperman' is still there, but he's now listed as a retired VP of Boeing. No matter, from the website we can tell the Center for Security Policy is obviously in league with the Boeing boys as a proxy on this issue holding the "Buy American" front.

Today's Show?
So did Hugh get another voice to provide a Boeing-free point of view on the matter as I pleaded for him to do yesterday? In a word:

HAH!

Friday HH brings in regular guest Frank Gaffney at the end of the first hour, and Gaffney starts parroting the same unsubstatiated Boeing assertions and defense technology canards: commenting on them as if they were fact. So what's Gaffney's relationship to Boeing and their proxies? Oh yeah, he's the freakin' President and CEO of the Center for Security Policy.

Gaffney Update 04/01/08: According to a HuffPo poster who doesn't like Gaffney's ties to Israel (love it when I get to use the Useful Idiot ~wink~) Gaffney is on record as being a 'Boeing Boy'. End Update.

Hugh Hewitt is living in an echo chamber that was built in Seattle and Witchita on this issue. He needs to ask a Northrop Grumman representative the same questions he opened his Thursday column with (also linked in this post's title).

New Theme Needed?

Looks like I'm going to have to add a new theme for discussion on this blog: Boeing BS Watch.

Boeing's Mark McGraw is a one front-man disinformatsia machine! Today he was on Hugh Hewitt regurgitating some of the blather he's put out earlier and just in time for Hugh's show he comes up with another topic to complain about: the KC-45 isn't projected to be able to refuel the V-22.

Hugh asked if this was acknowledged in the process and (gasp!) it was. So is Boeing's point to ridicule the AF's judgement some more, or is it to criticize the KC-45? It's getting harder to tell.

I'll post excerpts of an e-mail I sent Mr. Hewitt after the segment asking him to please get the Northrop Grumman KC-45 program manager on the show for the sake of balance. Hugh is pretty good about not just asking for responses to comments made by earlier guests and keeping the 'second guy' in the reaction mode. And if it happens, then hopefully the NG rep will get more on the offensive mode - goodness knows Boeing's handing them the ammo.

This is going to get even uglier if Boeing insists on arguing everything BUT why they lost: "We really aren't sure" is getting lame very fast.

Boeing "Surprised" in Tanker Duel? NOT!

Lockheed Martin has an internal news bulletin that summarizes a lot of the aerospace news of the day. In today’s edition was an Av Week blurb about the KC-45, titled “USAF says fencing off data kept tanker competition fair”. It was interesting enough to cause me to look up the full article titled “USAF On The KC-X Defensive A Year Ago”, which is an interesting twist on the situation in itself. My curiosity paid off because the article provided some real insight into the complaints that Boeing is using as the basis for protesting the award of the KC-X contract to Northrop Grumman.

It has the first details I’ve seen about the “Northrop-era” model used to evaluate the tankers. ‘Northrop’ as in ‘before Northrop Grumman’…as in 1980’s Northrop. A model developed for the now-defunct Strategic Air Command to help plan tanker ops in the 1980s (more about this in a second).

The Combined Mating and Ranging Planning System (CMARPS) was designed for the Strategic Air Command in the 1980s and is now used by planners in Air Mobility Command. It helps operators assess how many tankers are required for a variety of missions, where they can be based and how many receivers -- fighters and intelligence aircraft, for example -- can be serviced by the available refuelers. It is one of various modeling systems used by the Air Force.

In the article, Boeing claims difficulty in learning how to use and actually using the model. It would seem to me, that since Boeing is the ONLY tanker contractor the AF has had for years and the dominant contractor for decades, that they should have been very familiar with the model if they cared at all about understanding how their Customer was using it for any number of reasons like, oh I don’t know…maybe Product/Logistics Support and Sustainability Engineering?

Here’s another tidbit about the model, per a teleconference with reporters today hosted by Northrop Grumman’s Washington office and the KC-45 Program Manager, Paul Meyer, the model was developed by a company that Northrop Grumman BOUGHT only about six years ago (click here to listen to the MP3 file – model info @ approx 3 minutes). Mr. Meyer went further and pointed out that his team had no contact with the part of NG that developed the model, and that Boeing had a lot more experience with the model than his team. One wonders now if Boeing had communications or managerial barriers that prevented the part of Boeing familiar with the model from supporting the Boeing bid.

There was a wealth of other information provided in the teleconference that knocked down Boeing’s claims and provides some concrete cost/price numbers as well. I would encourage anyone to listen to it.

The Av Week piece also brings up Boeing’s complaints about ‘changes’ to the contract:

Two “major combat operations” scenarios were tweaked to add additional ramp space in the Cmarps [sic] model that doesn’t actually exist. This allowed for the KC-30 to gain enough access at a “priority base,” according to Boeing officials, that it otherwise would have been too large to achieve. Limited ramp space can make operations with larger aircraft more difficult, because of tight parking and ground maneuver space…Space between parked aircraft, however,was another change made by the Air Force during the competition, Boeing says. The service cut the space between parked tankers in half, to 25 ft., according to Boeing. The company says this change doesn’t accurately reflect operations in the field as articulated in the Mobility Capability Study 2005, a classified assessment of mobility needs by the Pentagon. The Air Force countered in its March 29 [2007] letter, saying that the shift to 25 ft. separation between parked aircraft “accurately reflects contingency operations at constrained employment bases.”

Hmmm. So Boeing continued clinging to the idea that they had a larger ramp space advantage than they actually did have, because they continued to view the requirement from a Standard Operational Procedures point of view and not taking into account the AF’s experience with “contingency operations at constrained employment bases” for their final proposal. –even though these changes were made BEFORE the last proposal was submitted.

The last change mentioned in the article, but one that apparently happened 4-5 months earlier than the others, involved ‘turn-around’ times:

Another Air Force shift in evaluating the criteria was the use of a “standard planning ground time,” which reflects the time needed to service a refueler on the ground, load it up with more gas and send it out for another mission. Boeing says that in November 2006, the Air Force asked the competitors to calculate ground turnaround time based on a fixed number…..

This obviously caused Boeing some consternation:

Boeing naturally saw this as a strength for its proposal, since a smaller tanker would take less time to refuel on the ground. The Air Force, however, switched that metric, implementing a standard turnaround time of 4 hrs. and 15 mins. for both proposals …..

Even though the change was made before the final proposal was submitted, and therefore clearly not in violation of contracting rules and laws, was the change warranted? Evidently so:

…“Upon review of current operations, the Air Force determined that there are many factors that impact turn time and overshadow differences in ground fuel servicing times, including, for example, combat tasking ground crew and spare parts availability [and] local constraints,” the service says. “As these examples indicate, these factors have little or no relationship to the aircraft characteristics. Because of these variables, the Air Force must use a standard planning ground time for its tanker fleet.”

So before the final proposals were submitted and over a year before source selection, the AF changed a planning factor for turnaround time based upon real world experience that reduced Boeing’s edge in tanker refuel times. From this article we can conclude that recent real-world operations gave the AF more concrete criteria for spacing and turnaround times to use in evaluating the proposals and this experience benefitted the NG proposal.
Aside from the above, we also learn that the article’s title was highlighting the point that Boeing had every reason not think this contract was a slam-dunk more than a year ago. So much for the feigned ‘shock’ and surprised indignation on their part and so much for the outrage over ‘changes’ coming out of Boeing’s PR machine.

The revelation that Boeing had concerns about how their tanker might measure up even before the final proposal was submitted also calls even more into question their decision to push the small 767 version (vs. a stretched -300 or -400). Boeing’s talk of offering a 777 if ‘they had only known’ doesn’t hold water: it’s probably TOO big "as is" and they didn’t have a shortened version on the shelf to offer by design: they consciously decided years ago to stretch the 767 instead of shrink the 777 for the relevant commercial market segment.

In a just world, Boeing’s protest is toast. Let’s hope it is a just world.