http://lexingtoninstitute.org/1268.shtml

TANKER CONTROVERSY: QUESTIONS THE AIR FORCE MUST ANSWER
Loren B. Thompson, Ph.D.
Issue Brief
May 28, 2008

It is now three months since the Air Force shocked the world by
awarding the contract for its next-generation aerial-refueling tanker
to Northrop Grumman and the European parent of Airbus. Throughout
that time, service officials have insisted that the process by which
the winner was chosen was transparent and fair. But the service has
failed to answer even the most basic questions about how the decision
was made to deny the contract to Boeing, the widely favored
incumbent. The Government Accountability Office is expected to issue
a ruling on Boeing's protest of the outcome in mid-June. Whatever it
finds, the Air Force has some explaining to do...

1. The Air Force says it would cost roughly the same amount to
develop, manufacture and operate 179 next-generation tankers,
regardless of whether they are based on the Boeing 767 or the Airbus
A330. But the Airbus plane is 27% heavier than the Boeing plane, and
burns over a ton more fuel per flight hour. With fuel prices headed
for the upper stratosphere, how can both planes cost the same amount
to build and operate over their lifetimes?

2. The Air Force says it would be equally risky to develop the Boeing
tanker or the Airbus tanker -- after forcing Boeing to substantially
increase the time and money required to develop its version. But
Boeing proposed to build its tanker on the same assembly line where it
has already constructed hundreds of the same airframe, whereas Airbus
proposes to build its tanker at a plant and with a workforce that
don't yet exist in Alabama. How can the risks be equal?

3. The Air Force says that a computerized simulation of how the
competing tankers would function in an actual wartime scenario
strongly favored the larger Airbus plane. But the simulation assumed
longer runways, stronger asphalt and more parking space than actually
exists at forward bases, and failed to consider the consequences of
losing bases in wartime. How can such unrealistic assumptions be
relevant to the selection of a next-generation tanker?

4. The Air Force says the Northrop-Airbus team received higher
ratings on past performance than the Boeing team, based on a review of
programs deemed similar to the future tanker. But Boeing built all
600 of the tankers in the current Air Force fleet, whereas Northrop
and Airbus have never delivered a single tanker equipped with the
refueling boom the Air Force requires. How can Northrop and Airbus
have superior past performance?

I could go on. The Air Force refused to consider Boeing cost data
based on 10,000,000 hours of operating the commercial version of the
767, substituting instead repair costs based on the 50-year-old KC-135
tanker. It said it would not award extra points for exceeding key
performance objectives, and then proceeded to award extra points. It
said it wanted to acquire a "medium" tanker to replace its cold war
refueling planes, and ended up picking a plane twice as big.

Whatever else this process may have been, it definitely was not
transparent. Even now, neither of the competing teams really
understands why the competition turned out the way it did. It would
be nice to hear from the Air Force about how key tradeoffs were made,
because at present it looks like a double standard prevailed in the
evaluation of the planes offered by the two teams.