The Air Force Tanker Decision: A ‘Fairer’ Way Forward
By Michael W. Wynne, 21st Secretary of the Air Force
Credit: KC-135, http://www.aviationexplorer.com
11/17/2010 – The Air Force is confronting a conundrum that in 1998, the Government Accounting Office (GAO) called a mandatory replacement program for the aging tanker fleet. There have been two winners since that time. First, Boeing was awarded a Tanker Lease with a largely acceptable derivative of a commercial design the 767 Aircraft, but which the Congress called a tainted award because of some shenanigans by a senior official resulting in a recompetition. In that recompetition, the Northrop Grumman bid won built around a largely acceptable derivative of a commercial design the 330 Aircraft, which again was disparaged by the GAO for a lack of thoroughness in the available airfield support systems, but which came across as a direct volley into international competition.
Now, like the Charlie Brown character, the football is teed up again, and both teams and their lawyers await the outcome. Meanwhile, the tankers are now almost 13 years older, the maintenance personnel are doing an amazing job keeping them aloft, and the senior leadership of the Air Force is hoping for a successful conclusion. Is this hope a strategy? That is doubtful.
When the Army was in seemingly desperate straights to address the improvised explosive devices in the roadside areas and was scrambling to gain some military advantage, the Office of the Secretary of Defense authorized a sweeping purchase of all of the offerings, which set aside any aspirations of life cycle costs or the notion of service and support in favor of rapid acquisition and downstream competition between providers.
Yes, there were qualification tests, which narrowed the competitive field, but the clear vision was first to make the mission and second to allow further competition and user feedback to ultimately bring clarity to the ultimate one or two suppliers in the then distant future. Though the improvised explosive devices have become more deadly, the message to the men and women in the fight was, “The system is listening to you and getting you the right equipment for the fight.” The message to the supplier base was that the department will continue to winnow the providers down by fixed price supply contracts until competition offers a clear winner.
More recently, the Navy has made a decision to continue with two suppliers in the Littoral Combat Ship competition, as this would clearly hone the two design teams and allow the Navy to reap the benefits from a price shootout following rigorous qualification testing. This keeps the best maritime designers on the contract trying to make their offering better than the competitor, as well as an economical offering.
The debate seems to be over as to the Navy’s aspirations in this faster, though smaller class of ships. Some debate the merits of moving away from the ‘Blue Water,’ more traditional Navy into the littoral, and the battle for frigate and cruiser class to assist the carrier may continue to be an issue. No doubt the outlook for the budget and the present dwindling fleet size of our once 600 ship Navy has made the case for this class of ship.
That said, the Navy has lain the marker down that continuous competition has a real place in the defense procurement process, putting the force of continued competition into the prior rhetoric of sole source price increases that have been the mantra to date.
So, here we are. The key infrastructure element for air power and for support for the various missions in support of the ground team in Afghanistan is aging and costly to operate. The strategic linchpin of the air power, medical evacuation, and even presidential travel–that is what the Air Force tankers do, but now they put at risk the airmen who fly them; if the planes are not available, the missions they support will be undercut.
The Air Force has been patiently engaged in this competition for more than half a generation, while the fleet literally teeters on the edge. A lesson from the unimaginable breakup of the F-15 in flight yields nightmares to this fleet.
The key infrastructure element for air power and for support for the various missions in support of the ground team in Afghanistan is aging and costly to operate. The strategic linchpin of the air power, medical evacuation, and even presidential travel–that is what the Air Force tankers do, but now they put at risk the airmen who fly them; if the planes are not available, the missions they support will be undercut. The Air Force has been patiently engaged in this competition for more than half a generation, while the fleet literally teeters on the edge. A lesson from the unimaginable breakup of the F-15 in flight yields nightmares to this fleet.
Cheerfully all predict no problem–like the taxicabs in Cuba–but wait, this fleet is older than the taxis in Cuba. The Air Force tried to use a law from the Depression to award helicopters, but they now can seek the support of their fellow services to get this award right. Now is the time to move forward and recognize the value of what the USN has determined, namely that continuous competition has a real place in the defense procurement process.
Among Others, the Australians Will Have New Tankers Prior to the USAF Credit: http://www.cae.com/en
How to move forward?
First, let’s buy the field of the two offerers and rigorously test the offerings, allowing the users to wring out what they like. This would keep the design teams active well into the test phase. The Air Force should extend this competition by asking for ‘Fly Before Buy’. This competitive option would put the pressure directly on the two contractors to bring their very best product to test.
The Air Force should extend this competition by asking for ‘Fly Before Buy’. This competitive option would put the pressure directly on the two contractors to bring their very best product to test.
Second, look to the Navy to get to fixed-price procurement by pushing not for any cost contract but for extending the competition. This will bring price pressure between these commercial providers into a fixed price production bid in the future. This example from the Navy will position the Air Force well on this two-decade production procurement.
There is, as well, a secondary benefit, which is why give up the option to replace the aging KC-10 fleet in parallel with the aging KC-135 fleet. It should be obvious by now that with the total fleet shrinking, the Air Force should be re-evaluating its mix, and why not use this competition to accomplish this true life cycle calculation?
This extension of competition will also position the Air Force to buy one or both of these competitive aircraft to replace either the aging KC-135 fleet, the aging KC-10 fleet, or both, before the terrific maintainers lose the ongoing battle of age and overuse for this foundation of America’s expeditionary forces.
Frankly, ‘Fly before Buy’ is just ideal going forward and takes full advantage of lessons from other service procurements, and may yield outcomes that are satisfying to all stakeholders and especially the brave men and women that take to the night skies in this teetering fleet. Award to both, and let’s get the competitive benefit.