Why Did DOD Change Their Rules to Give Contract to Airbus?
— What is going on at the Department of Defense?
— Why were rules changed to favor the European Airbus over the US Boeing tankers?
— Who is behind the sudden switch in capability metrics that favored Airbus?
Did the US Department of Defense change the rules to award a $40 billion contract to Europe’s Airbus?
According to the BBC, the Airbus tanker won because it more closely met the Air Force’s requirements– that the larger, less maneuverable tanker was the obvious choice as it were.
Only a year ago Northrup Grumman Corp. was thinking of scrapping their bid for the DOD tanker contract because they did not see themselves meeting the capability metrics for the contract.
Forbes reported this in Jaunuary 2007:
US defence firm Northrop Grumman Corp confirmed that it may scrap a bid to supply the US Air Force with new mid-air refuelling planes, in what would be a major blow to its European partner EADS.
Any withdrawal of the Northrop Grumman (nyse: NOC – news – people )-EADS bid would leave US giant Boeing (nyse: BA – news – people ) Co as the sole company vying for the contract for 179 tanker planes, which analysts say could be worth around 100 bln usd.
Northrop Grumman is unhappy with the Pentagon’s expected bidding requirements, which it says would prioritise cost and so favour the 767 likely to be offered by Boeing over the more expensive KC-30 model of EADS.
The KC-30, which is based on the A330 airliner made by EADS unit Airbus, would offer greater capacity for fuel, cargo and troops than the Boeing plane, according to Northrop Grumman spokesman Randy Belote.
‘We still do not see valuation metrics that we feel adequately address the increase in performance such as fuel, over the baseline that is being required (by the Air Force),’ he told AFP.
‘And unless those capability-based evaluation metrics are included in the final draft RFP (requests for proposals), we don’t feel that the KC-30 will be competitive and we will not bid,’ Belote said.
That would leave EADS without a US partner and so unable to proceed with the bid, which the European company sees as pivotal to its ambitions to take on the lucrative US military market.
So… What happened at the DOD since this article was published that made them change their minds on Airbus?
And, who made this decision?
It looks like there may be more to this story.