Tanker Truth

Did the GAO agree with most of Boeing’s complaints?

Absolutely not!
In fact, Boeing filed 111 separate complaints and the GAO accepted only 8! The GAO rejected the vast majority of Boeing’s complaints. According to the GAO, the Air Force:

Calculated that KC-45 could offload more fuel over distance
Correctly found that KC-45 was superior in air refueling efficiency
Accurately estimated that KC-45 could carry more cargo further
Found that KC-45 featured significant advantages in airlift efficiency
Correctly viewed larger KC-45 boom envelope as advantage
Rated KC-45 system integration and software risk equal to Boeing
Rated KC-45 program management better than Boeing
Correctly evaluated Northrop Grumman’s past performance as superior to Boeing’s
Accurately conducted air refueling simulation in combat to determine KC-45 outperformed KC-767
Determined Boeing’s paper airplane had substantially greater development cost and schedule risk.
Correctly determined that Boeing production costs are substantially higher than Northrop Grumman’s
Accurately assessed KC-767 operations and support costs

After factoring in the GAO’s criticism, what would the result be?

Factor	GAO Comments	Result
Factor 1: Mission Capability	GAO did not say Air Force evaluation was wrong, but criticized RFP wording. GAO did not object to the Air Force conclusion that KC-45 outperformed KC-767 in almost all areas	*KC-45 superior*
Factor 2: Proposal Risk	GAO did not dispute the Air Force conclusion that both offerings had equal risk	*Tie*
Factor 3: Past Performance	GAO took no issue with Air Force finding that NG had better past performance	*KC-45 superior*
Factor 4: Cost/Price	GAO stated greater specificity needed in some areas, but Most Probable Life Cycle Cost will still be dead heat. Underpinning of Air Force decision was risk and GAO did not object to the finding that KC-767 remains higher risk effort	*KC-45 superior*
Factor 5: Integrated Fleet Aerial Refueling Assessment	GAO did not dispute that Air Force conducted simulation accurately and KC-45 provided better combat capability	*KC-45 superior*

The GAO stated that its analysis does not “reflect a view as to the merits of the firm’s respective aircraft,” but added “but for these errors, we believe that Boeing would have had a substantial chance of being selected for award.” Would the KC-45 still win if these errors were corrected?

Yes. The suggestion that there might be a chance of a different result is the standard GAO statement in any sustained protest. On the merits, the data provided in the GAO report clearly shows that KC-45 is the superior aircraft.

Despite Boeing’s claims, the GAO agreed with the Air Force that the KC-45 offers better refueling and airlift capability, better refueling and airlift efficiency, better takeoff performance, better combat performance, lower development cost/risk, and lower acquisition cost. The GAO concurred that NG should be rated higher in past performance and program management. Taken together, the Northrop Grumman KC-45 would still win the KC-X competition.

Shouldn’t the Air Force re-open the bidding?

That is the Air Force’s decision to make, but given the urgent need for the new tanker and the clear superiority of the KC-45, this would be a time consuming, costly and unnecessary step. It would likely end with the same result, thereby only delaying delivery of the KC-45 to our men and women in uniform. They need it now. And the KC-45 is ready now.

Boeing claimed in its ad campaign and in statements to members of Congress that the KC-767 was more efficient. Did the GAO agree?

No. The GAO agreed that the Air Force methodology for calculating air refueling efficiency and airlift efficiency was accurate. The KC-45 offered significantly better efficiency in the refueling and airlift mission areas.

In its PR campaign and in messages to Congress, Boeing repeatedly said that the KC-45 would burn $30B more in fuel than the KC-767. Did the GAO agree?

No. The GAO did not sustain Boeing’s protest on fuel costs, indicating that Boeing’s public arguments that the Air Force somehow overlooked 30% of the life cycle cost were clearly ludicrous.

Did the GAO agree with Boeing that its development and acquisition costs would be lower than Northrop Grumman’s?

No. The GAO found that proposed KC-767, a paper airplane which is yet to be built and combines elements from 767-200, -300, -400, B737, and B777, new engines, and a new boom would cost substantially more to develop and to procure and that Boeing failed to provide substantiation of its non-recurring engineering costs.

Boeing has said it should have been better rated on past performance due to its 75-year history in the tanker business. Did the GAO agree?

No. Much of the GAO discussion of Boeing’s past performance is redacted in its report, but there is no question as to Boeing’s dismal record. Boeing has failed repeatedly. Its Japanese tanker – delivered one year late – is still not ready to be put into service. Its tanker for Italy – now three years late – cannot pass fuel through its wing pods and is still not scheduled for delivery. This is poor performance that no honest evaluator could ignore.

Boeing claimed publicly that the KC-767 provided better operational capability and the Air Force assessment of combat performance was based on inaccurate assumptions and an inadequate simulation. Did the GAO agree?

No. The GAO dismissed all of Boeing’s claims and upheld the Air Force’s assessment. The KC-45 offers significantly better combat performance than the KC-767.

On which issues did GAO support Boeing?

The GAO says the Air Force did not follow RFP evaluation criteria on relative order of importance and Boeing satisfied more requirements.

If you examine the number of KPP discriminators in Factor 1, KC-45 had more. All discriminators are not created equal. It was up to the Air Force to assign value. The Air Force found the value of the KPP discriminators for Northrop Grumman was more significant than Boeing’s.

The GAO says on fuel offload over range, the Air Force should have given KC-767 and KC-45 equal credit.

The GAO agreed that KC-45 provides significantly greater offload over range than KC-767, but found that the Request for Proposal should be read so that a thimbleful more of fuel over the minimum (KC-767) had to be evaluated the same as a bucket more (KC-45). The Air Force disagreed with this interpretation of the language.

The GAO says the Air Force did not conclusively demonstrate the KC-45 could refuel all Air Force aircraft using current Air Force procedures

The GAO’s concern focused on the KC-45 overrun and breakaway operations. Northrop Grumman addressed issue to Air Force’s satisfaction; the KC-45 possesses the required speed, structural integrity, and handling qualities to achieve the necessary overrun and breakaway performance. Bottom line, the KC-45 can refuel all Air Force aircraft. Boeing had claimed in media and advertisements that KC-45 could not refuel V-22, which is not correct. The KC-45 can refuel a V-22.

The GAO says the Air Force conducted “misleading and unequal discussions” with the two companies.

These discussions had nothing to do with Boeing’s public complaints regarding aircraft size, but focused on a specific topic: “net ready” capability, which is a minor sub-element of the overall proposal. Even with re-evaluation, the final results would not have changed.

The Air Force erred by accepting a Northrop Grumman proposal that did not include sufficient specifics on support of organic depot-level maintenance.

Northrop Grumman committed contractually to support the organic depot concept and meet any schedule required. The Air Force recognized this commitment.

Most Probable Life Cycle Cost

Military Construction: GAO believes that Air Force must account for battery and seat storage—and develop plans based on specific bases. Results are unlikely to change relative costs since this represents less than one-tenth of 1% of the overall program costs.

Boeing development costs: GAO agrees that Boeing “viewgraph” aircraft, combining elements of the B-767-200, -300, -400, B-737, B777, new engines, and a new boom will cost more to develop and will entail more risk than the KC-45, which is built, flown, and tested. But the Air Force needed to analyze costs more specifically and use different cost growth factors. Boeing’s risk and development costs will remain significantly higher than Northrop Grumman’s.