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No KC-X Price Info Shared

Two Program Officials Fired So Far

The Air Force Chief of Staff, Gen. Norton Schwartz, insisted today that sensitive information about the price of the tanker bids was not released when it mistakenly sent KC-X competitors Boeing and EADS information on each other's offers earlier this month.

The Air Force sent each company one compact disc containing one page of information about their rival jet's performance in the so-called  Integrated Fleet Aerial Refueling Assessments. These assessments are used to evaluate the performance of the jets in a variety of different military scenarios and play a key role in the Air Force's evaluation of the bids.

Those CDs contained "no offeror proposed pricing information," Schwartz repeatedly told reporters during a breakfast in Washington. While the general called the mix-up a "profound disappointment," he did not indicate that the gaffe would derail the latest round of the $35 billion competition for 179 aerial refueling tankers. In an attempt to ensure complete fairness on the matter, both offerors were allowed to view the information revealed to the other, he added.

Still, two people in the KC-X program office have already been fired and more would be "held accountable" for the incident, Schwartz said.

This comes one day after EADS North America CEO Sean O'Keefe told reporters that, so far, it appears no compromising information was shared with the two companies.

Boeing officials are referring all questions on the matter to the Air Force, according to company spokesman, Damien Mills.

Schwartz also dispelled the notion that the mix-up was behind the delays in the contract award which Pentagon officials insisted would happen this fall. That award is now likely to happen early next year, Schwartz acknowledged.

The delays are simply the result of the service working as hard as possible to ensure that contract "can stand on its own and is able to withstand scrutiny," said the general. This extra effort has led to more interaction than normal between the Air Force and KC-X bidders to discuss the details of their aircraft, he added.

This latest episode in the KC-X saga comes after two failed competitions in the last ten years to replace 179 of the air service's oldest KC-135 Stratotankers. In 2008, Boeing successfully protest the service's award of the contract to a Northrop Grumman-EADS team. Boeing claimed the Air Force was not clear that it wanted in the RfP for that round of the contest.  A previous contract to lease KC-767 tankers from Boeing was cancelled in 2005 after it was proven that the Air Force's top acquisition official Boeing preferential treatment in the matter in exchange for a job there.

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