The top U.S. Air Force civilian overseer says changes to the plan to buy KC-135 refueler replacements are expected to come out later this month. Both competitors are grumbling about the draft KC-X request for proposals (RFP).

Air Force Secretary Michael Donley says the service is open to amendments. "I would imagine that we are going to consider some change to the RFP," he tells Aviation Week. "We think it is a strong RFP and we think the main outlines of it are very well [put] together. But, we continue to get questions." More than 200 queries have been submitted as part of the draft RFP process, and either contractor could threaten not to bid if the final RFP is not to its liking.

Boeing is expected to propose a 767- or 777-based tanker while Northrop Grumman/EADS is offering the European-designed Airbus A330. The draft RFP, issued Sept. 24, puts heavy emphasis on cost and includes 373 pass/fail threshold requirements. And, in another shift from previous KC-X contests, the Pentagon is pursuing fixed-price development and production contracts.

On the heels of a press conference held by Northrop Grumman/EADS late last month to lay out the team's complaints, Donley says he does not want emotion to dominate this competition. "We've been criticized by both sides, as expected. It is up to the contractors to decide how vocal they want to be in this debate," Donley says. "I think that some of the recent announcements suggest we will not avoid the controversies that we experienced last time around. The level of debate and the heat that contractors and their supporters want to put around these issues could repeat themselves."

Just over a year ago, Defense Secretary Robert Gates halted an attempt to recompete the KC-X contract, calling for a "cooling-off" period. However, since the draft RFP was issued, lawmakers supporting both teams have publicly decried it.

"We really don't need the emotional [element] and this is a tough project in and of itself," Donley says. "We don't need all of the difficult and complicating elements that are added to that when people try to develop campaigns in favor of their program." Northrop Grumman/EADS won a $1.5-billion development contract in February 2008, but it was terminated after procurement missteps came to light. They were discovered by the Government Accountability Office after Boeing protested the win.

One of Northrop's current complaints is a disclosure of the company's proposed price in the last competition to Boeing that was "not in accordance" with federal acquisition regulations, according to Randy Belote, the company's Washington-based communications vice president. He says they hope to iron this out directly with the Air Force, but acknowledges that options, including a legal remedy, are on the table.

Furthermore, Northrop is complaining that the fixed-price development and procurement structure expose the companies to too much risk, because the new RFP calls for developmental items.

Donley says the service will continue to use fixed-price contracts. "As we go forward, I think we'll try to put more pressure on our suppliers to keep cost down," he says. "There are cases out there, and I think tanker is one of them, where the technology should be pretty mature." Northrop's previous contract was structured under a cost-plus award.

Not all technologies for the KC-X are mature, however. One industry official said Northrop's design addressed 80% of the 373 pass/fail items. "A portion of these requirements are not on our aircraft today," says Mitchell Waldman, business development vice president. Boeing's team must address the requirement for fuel offload at 1,200 gal. per min. (GPM). In the last competition, Boeing said its sixth-generation boom could offload more than 1,000 GPM. The fifth-generation boom used for the Japanese and Italian tankers can offload 900 GPM.

Boeing is mum about its draft RFP complaints. But, on the company's tanker web site (unitedstatestanker.com), communications official Bill Barksdale downplays Northrop's call for the release of Boeing's pricing data. "There's no requirement for the government to share the losing bidder's proprietary pricing information with the winner or the public."

Waldman suggests the Air Force revert to the RFP that governed the last duel, but fix the elements that went awry. This is unlikely to gain traction at the Pentagon, especially since many of the leaders that crafted the previous competition have left office and the new leadership is intentionally taking a different approach. Northrop officials also mentioned dual sourcing as an option, though this has been staunchly rejected by the Pentagon.

Waldman also complains that the draft RFP places equal value on non-essential and essential qualities -- such as sink and toilet water flow and fuel offload or past performance -- respectively. "If everything is important, is anything important?" Waldman said. "In this competition, risk is essentially pass/fail." In the last competition, key requirements were weighed as well as past performance and risk.

Photo: EADS