Northrop Grumman says “no” to KC-X

Airbus's A330 MRTT refuels from a smaller A310. EADS image

9 March 2010

Northrop Grumman isn't bidding for the US Air Force's KC-X aerial refuelling tanker programme.

 

March 9: Northrop Grumman has made good its promise not to bid for the latest KC-X aerial refuelling tanker programme for the US Air Force.

In a statement, Wes Bush, Chief Executive Officer and President of Northrop Grumman Corporation said "Northrop Grumman has determined that it will not submit a bid to the Department of Defense for the KC-X programme. We reached this conclusion based on the structure of the source selection methodology defined in the RFP, which clearly favours Boeing's smaller refuelling tanker and does not provide adequate value recognition of the added capability of a larger tanker, precluding us from any competitive opportunity.

"Our prior selection by the Air Force, our firm belief that we provide the best value offering, and the hard work and commitment of the many individuals and communities on our team over many years made this a difficult decision for our company. But we have a fiduciary responsibility to our shareholders to prudently -investing further resources to submit a bid would not be acting responsibly.”

Bush went on to say that although Northrop Grumman has grounds to appeal to the US Government Accountability Office over its overturned win on the first bidding round, it will not do so. He also laid down a challenge to Boeing, the only manufacturer now in the bidding process – “In the previous round, the Air Force, through a rigorous assessment of our proposal, determined that it would pay a unit flyaway cost of approximately $184 million per tanker for the first 68 tankers, including the non-recurring development costs. With the Department's decision to procure a much smaller, less capable design, the taxpayer should certainly expect the bill to be much less," he said.

At the same time EADS chief executive Louis Gallois said that the European giant would not go it alone with a KC-X proposal. It had been in partnership with Northrop Grumman for the first competition and was backing another bid to go forward, promoting the KC-45, a version of the A330 multi-role tanker transport (MRTT) now entering service with a number of customers.

Now that Boeing is the sole bidder, the US Air Force is faced with not complying with its own procurement rules – this may not be the end of the saga, as there will be considerable pressure from Congress that a fair and open bidding process is seen to be done.

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