Split Tanker Buy Idea Continues to Percolate

In 2008 the U.S. Air Force awarded the KC-X replacement tanker contract to Northrop Grumman and EADS. This award was overturned by the GAO on a protest by Boeing. Secretary of Defense Gates delayed the recompete until the new Obama administration came into office. Congressman Murtha and others have proposed splitting the next award between Boeing and Northrop Grumman. This is not the best idea for a variety of reasons related to sustainment and training costs. Now Government Executive is reporting that Northrop Grumman has said that there might be some advantages to the idea of having both companies supply the aircraft. The major benefit would be the more rapid replacement of the KC-135 aircraft currently in use. This would save money up front as the procurement cost would be less as the longer a production profile the more money it costs for a given number of aircraft. Of course one issue that might cancel this out is that it would take EADS and Boeing longer to get up to the most economic quantity of aircraft, and they might not be able to with the reduced buy for each supplier. The logistical cost for maintaining two separate training, maintenance and part chains also would be more expensive then just using one aircraft. There might be some economic benefits if the aircraft selected were similar to others already in the U.S. military’s inventory. There are rumors that as part of the Obama budget the whole program will be delayed anyway and this might be a way for Northrop Grumman to get some of the business sooner. More to come on this continuing story that has been going on for almost ten years now.