Competition works to create better results in almost every realm of life. Why shouldn’t it work when it comes to military air-refueling tankers?
This fall, the Air Force is expected to announce its award of a contract that could eventually approach $100 billion to replace its current fleet, which is seriously long in the tooth. Two major companies are bidding for the contract, and the wisest decision would be to give them both a bite.
The two bidders are Boeing, with its main plant in the Seattle suburbs, and a partnership between Northrop Grumman and EADS North America, with its plant in Mobile County, Alabama. By most accounts, the Northrop Grumman/EADS plane (henceforth the NGE) is “superior” to the Boeing one — so says, for instance, industry expert Scott Hamilton, writing in the Armed Forces Journal in February.
But Hamilton is among the many who give the inside edge to Boeing, nevertheless. For one thing, Boeing has been the main builder of refueling tankers for the Air Force since World War II, and so presumably enjoys an institutional bias within the Pentagon. Moreover, Boeing and its supporters have been making much of the fact that the EADS parent corporation is based in Europe.
In this case, frankly, their “Buy American” scare tactics are nothing but tommyrot — after all, the NGE plane would be assembled entirely in coastal Alabama, probably providing jobs for people in Mississippi and the Florida Panhandle as well. And Northrop Grumman is, of course, an American company through and through. Yet none of that may matter: Demagoguery, combined with the clout of senior Washington State Democrats Norm Dicks in the House and Patty Murray in the Senate, can go a long way in Washington, D.C.
NGE has fought back with a very impressive “spider chart” showing the superior attributes of its plane, the KC-30. The NGE plane’s basic design is about 15 years newer than that of Boeing, and respected outside analyst Thomas P. White — contracted by NGE in this case, but with an independent reputation as a former Air Force lieutenant colonel and former top Pentagon procurement analyst — reports that its capabilities exceed that of the Boeing KC-767 in a veritable host of measurements. Those indices range from maximum fuel load to maximum number of passengers (making it a dual-use plane) to payload tonnage to fuel efficiency and “mission effectiveness.”
The last four times the two planes have been in competition, including for tankers for Great Britain and for the West-friendly United Arab Emirates, the KC-30 (NGE’s) has won.
Not only that, but Boeing’s actual performance (on-time delivery, etc.) in recent years has been anything but stellar. And the whole reason the tanker is out to bid right now at all is that the Air Force’s earlier award to Boeing of the first $20 billion contract for the planes was so rife with corruption that a Boeing official and an Air Force officer went to jail and Air Force Secretary James Roche and Boeing CEO Phil Condit both resigned. Because of those shenanigans, U.S. Sen. John McCain was able to force cancellation of that deal and force it to be re-bid.
Truth in advertising: What I know about airplane technology could fit in a thimble, with room left over; and I used to live in Mobile. But facts are facts, and the spider chart seems to tell a clear tale of the NGE superiority. And McCain, undeniably a patriot, has no home-state pork interest in the outcome, nor any evident advantage to his presidential campaign in favoring one bid over the other — so his continued preference for taking the NGE bid seriously should speak volumes.
ALL THAT SAID, THE BEST IDEA might not be to give the whole award to NGE or to Boeing, but to split it up. Two good reasons suggest themselves. First, there will ultimately be a need for about 600 of these planes, spread out over several contract awards. (The first contract will be for 179 planes.) There is plenty of work to go around, and if two companies are building tankers for the Air Force, both will have a major incentive to do the work well, on time, and on budget. If they fail to perform well, each will know that the contract for the next batch of planes could easily go entirely to its competitor — which, after all, would have no new start-up costs or lag time to deal with.
Second, the politics of the situation actually should work in favor of a decision to split the contract. Even though the Air Force desperately needs a new generation of refueling tankers, what is needed and what is funded can often be entirely different things. Powerful Members of Congress have been known to kill entire programs, no matter how necessary, out of sheer spite. To risk having some angry senator kill funding for the tankers would endanger our national security. Far better would it be to secure backing for the tanker from all the Republican senators on the Gulf Coast and from the Democrats in the Senate from Washington State and from Illinois (site of Boeing’s corporate headquarters).
Competition works, and smart politics works as well. Both considerations argue, quite strongly, in favor of using Northrop Grumman/EADS as a major manufacturer and supplier of Air Force tankers.