Northrop Drops Tanker Bid

Northrop Grumman announced Monday that it will not bid on the KC-​​X tanker and will not file a protest that might delay the program any further, which paves the way for Boeing to supply the new aircraft more than eight years after the company's original effort to do so.  

“We reached this conclusion based on the structure of the source selection methodology defined in the [request for proposal], which clearly favors Boeing’s smaller refueling tanker and does not provide adequate value recognition of the added capability of a larger tanker, precluding us from any competitive opportunity,” said Northrop Grumman CEO Wes Bush. “We continue to believe that Northrop Grumman’s tanker represents the best value for the military and taxpayer – a belief supported by the selection of the A330 tanker design over the Boeing design in the last five consecutive tanker competitions around the globe.”

“Regrettably, this means that the U.S. Air Force will be operating a less capable tanker than many of our allies in this vital mission area,” he added.

Bush also said the company is mindful of the furor over the last bid protest brawl with Boeing and will not file one.

“While we feel we have substantial grounds to support a GAO or court ruling to overturn this revised source selection process, America’s servicemen and women have been forced to wait too long for new tankers,” Bush said in his statement.

“ I hope Northrop reconsiders its decision in the coming weeks ," said Rep. Buck McKeon, R-Calif , the top Republican on the House Armed Services Committee .  "I still believe that competition produces the most effective solutions for our warfighters and ensures the best value for U.S. taxpayers.”

However, a congressional aide  who requested anonymity said there was nothing for Congress to do now but keep an eye on the program as it moves ahead. The industrial base for large commercial aircraft is robust, with Boeing and Airbus annually producing about 400 planes each. That may have played some role in Northrop’s decision not to bid.

“At best, this is going to buy 15 airplanes a year,” the aide said. “This is a drop in the bucket for these commercial producers.”

One thing, at least, did go right in the latest iteration of the competition.  " The requirements process appears to have worked this time, "  the aide said.  “One of the things the department has been criticized for lately is gold-​​plating its requirements.  I think that the requirements process on this tanker has been scrutinized to the nth degree.”

Deputy Defense Secretary Bill Lynn said the department was “disappointed by Northrop’s decision.” He said Pentagon leaders “strongly believe that the current competition is structured fairly and that both companies could compete effectively.”

Mindful of the probable negative reaction from European countries who are likely to see Northrop’s action as proof the U.S. discourages European defense investment, Lynn said the Pentagon “strongly supports trans-​​Atlantic defense industrial ties and believes they benefit the American war​​fighter and taxpayer.”

EADS North America, Northrop’s partner in the KC-​​X competition and whose parent builds the civilian A330 that would have been modified for the tanker, issued a statement reaffirming the company’s commitment to the U.S. market.

“This decision does not diminish our commitment to the U.S., or to its servicemen and women,” said Board Chairman Ralph Crosby.

Now  Boeing must deliver on time, within budget   and without significant technical problems.  “Boeing still must bring a very competitive bid to the table that meets all the requirements the Pentagon has set forth,” Sen. Patty Murray, D-Wash., said in a statement. “It’s important to remember that the American people are the customers, and that we drive a hard bargain.”