US Air Force Tanker Acquisition Fiasco Is Difficult to Explain

The Government Accountability Office (GAO) yesterday released its detailed (although redacted) reasons as to why they sustained Boeingâ''s protest of the award of the new USAF refueling tanker program to the Northrop Grumman-led team. It makes for grim reading.

The GAO found that â''(1) the Air Force did not evaluate the offerorsâ'' technical proposals under the key system requirements subfactor of the mission capability factor in accordance with the weighting established in the RFPâ''s evaluation criteria; (2) a key technical discriminator relied upon in the selection decision in favor of Northrop Grumman relating to the aerial refueling area of the key system requirements subfactor, was contrary to the RFP; (3) the Air Force did not reasonably evaluate the capability of Northrop Grummanâ''s proposed aircraft to refuel all current Air Force fixed-wing, tanker-compatible aircraft using current Air Force procedures, as required by the RFP; (4) the Air Force conducted misleading and unequal discussions with Boeing with respect to whether it had satisfied an RFP objective under the operational utility area of the key system requirements subfactor; (5) Northrop Grummanâ''s proposal took exception to a material solicitation requirement related to the product support subfactor; (6) the Air Force did not reasonably evaluate military construction (MILCON) costs associated with the offerorsâ'' proposed aircraft consistent with the RFP; and (7) the Air Force unreasonably evaluated Boeingâ''s estimated non-recurring engineering costs associated with its proposed system development and demonstration (SDD)."

These are non-trivial errors, and not easily understandable given the highly political and extremely controversial nature of the acquisition (see here for a good summary of the history of this procurement), or that the US Air Force senior acquisition officials claimed that this was its most thorough, transparent and fair acquisition ever.

To wit, at a news conference announcing the award on 29 February 2008, then Secretary of the Air Force Michael Wynne said, â''Today's announcement is the culmination of years of tireless work and attention to detail by our acquisition professionals and our source selection team, who have been committed to maintaining integrity, providing transparency and promoting a fair competition for this critical aircraft program. They took the time to gain a thorough understanding of each proposal. They provided continuous feedback on the strengths and weaknesses of each proposal, and they gave the offerors insight into the Air Force's evaluation.â''

Mrs. Sue Payton, the Assistant Secretary of the Air Force for Acquisition, added at the same news conference that, â''â'¿ I can't stress enough what an incredibly open and transparent and rigorous first selection we have gone through. For months and months, we have been telling each offeror where their weaknesses were, where their strengths were, and so they've had a lot of opportunity to communicate with us and to make sure we were not talking past each other.â''

Mrs. Payton also added that, â''There was absolutely no bias in this award.â''

The GAO report seems to directly contradict many of these statements. I cannot fathom how the Air Force so badly messed up this acquisition. The Air Force knew that it was going to be scrutinized with a fine tooth comb, so everything they did had to be as Caesar's wife, above suspicion.

The questions being raised - fairly or unfairly - fall into "there was overt bias involved," which would be devastating for the Air Force's credibility and its senior leadership, or as the Brits say, it was a major cock-up. Neither explanation reflects well on the Air Force.

The Air Force has 60 days to respond to the GAO recommendations, which are that the â''Air Force reopen discussions with the offerors, obtain revised proposals, re-evaluate the revised proposals, and make a new source selection decision, consistent with this decision. If the Air Force believes that the RFP, as reasonably interpreted, does not adequately state its needs, the agency should amend the solicitation prior to conducting further discussions with the offerors. If Boeingâ''s proposal is selected for award, the Air Force should terminate the contract awarded to Northrop Grumman."

Congress really needs to dig into what happened here, and determine whether Air Force acquisition, which has been teetering on the edge of disaster for over fifteen years, is now totally broken.

Worst of all, of course, is that Air Force pilots are increasingly be placed at risk because the Air Forceâ''s aging tanker fleet â'' the average age of the KC-135 tankers is over 46 years â'' is going to take even longer to replace. The replacement process started in 2001, and here it is mid-2008. The lack of tankers is hindering Air Force operations, even though the Air Force likes to pretend the impacts are minor. My friends in the service are telling me otherwise.

I have been working a story for over a year on the problems in defense acquisition that is scheduled to appear later this autumn. It is not an altogether happy one either.


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