Saturday, January 31, 2009

Worst Idea of the Week, Redux

Call it Spook's First Law of Defense Procurement: Bad ideas don't improve over time, particularly when they involve (1) Members of Congress; (2) Billions of your tax dollars and (3) A critical military acquisition program.

Case in point: The Air Force's next-generation tanker program. As readers of this blog--and other defense forums--are painfully aware, the service's efforts to field new air refueling planes has been mired in scandal and partisan bickering for most of this decade. The first attempt, a lease deal with Boeing, was scuttled after it was revealed that the USAF's senior acquisition official had secured employment guarantees for herself (and members of her family) with the defense contractor.

More recently, a contract with Northrop-Grumman and its European partner, EADS, was cancelled after the Government Accountability Officer upheld a protest from Boeing. Both teams are now in the process of submitting new bids, but regardless of who wins, there will almost certainly be a new round of protests and delays.

That means that Air Force tanker units won't be getting new aircraft until 2013--at the earliest. Meanwhile, the service has grounded a number of its older KC-135s, which rolled off the Boeing assembly line during the Eisenhower Administration. As more tankers reach retirement age, the USAF will find it more difficult to sustain air refueling mission, a critical component of combat and mobility operations worldwide.

How to resolve the tanker impasse? A growing number of defense officials and analysts believe the only solution is a "split buy," purchasing equal numbers of new refueling aircraft from Boeing and Northrop-Grumman/EADS.

As Amy Butler of Aviation Week reports, the split buy option will be a topic of conversation when Pennsylvania Congressman Jack Murtha visits the Alabama plant where the Northrop-Grumman tanker would be built. Murtha's endorsement is considered essential in mustering Congressional support for the split buy option.

So far, the King of Defense Pork has not revealed his position on the issue. But convincing Congressman Murtha and his colleagues may not be difficult. In the early stages of a recession, no politician wants any part of a decision that would elminiate thousands of high-paying aerospace jobs, many of them filled by union members.

That's why officials close to the tanker program say dual sourcing by is the "only politically palatable way" to move forward. Under the split buy approach, Boeing and Northrop-Grumman would build 90 tankers each, creating (or saving) more than 80,000 defense jobs across the country.

What exactly will the Air Force--and taxpayers--be getting for their money? While buying tankers from two different contractors will win support on Capitol Hill (and in places like Mobile, Alabama and Seattle), dual sourcing is a terrible idea, for a number of reasons.

First, there's the issue of unit cost. Buying fewer aircraft from a particular supplier drives up the price tag. The B-2 became a billion dollar bomber because the projected purchase dropped from 132 aircraft, to only 21. Both the Boeing and Northrop-Grumman tankers are based on commercial airliners, but the same production rules apply. Buying 90 aircraft from one contractor and the same number from another will raise the project's cost well beyond the current $40 billion dollars.

Still, the duplication doesn't end there. To support two different tankers, the USAF will be required to create two aircrew training programs, and separate schools for technicians who will maintain the Boeing aircraft and those assigned to the Northrop-Grumman jet.

Keeping the new tankers will require different maintenance and logistics systems, and a major re-working of operational plans. The twin-engine KC-767 (based on the Boeing airliner) and the Northrop-Grumman tanker (built on the Airbus A330) have different offload capabilities, cargo capacities and operational "footprints." In some situations, the KC-767 can operate from forward airfields that can't handle the larger Airbus. On the other hand, the Northrop-Grumman entry is better suited for some longer-range missions.

At least one key official has expressed opposition to the split buy option. In a recent interview with Aviation Week, Defense Secretary Robert Gates noted that buying both tankers would "greatly complicate" the Air Force's life, leaving the service with four different refueling aircraft in the inventory (the USAF plans to retain some KC-135s along with the KC-10s it purchased in the 1980s). As Dr. Gates observed, the multiple training, logistics and maintenance systems would quickly become an expensive "nightmare."

Unfortunately, that reality doesn't exactly square with Washington politics--and the reality of today's hyper-partisan defense procurement process. Fact is, the "split buy" idea has been around for some time. It surfaced several years ago, when the Pentagon suggested successive rounds of tanker purchases, under programs dubbed KC-X and KC-Y. That idea was quickly shelved, in favor of a single "buy" for 179 tankers, provided by a single vendor.

But the dual purchase proposal made a comeback last summer, after the Northrop-Grumman contract was cancelled. Former Air Force Secretary Mike Wynne--a veteran of years in the defense industry--suggested that a split buy might be the only option. As the economy declines (and political pressures build), support for the "two tanker" scheme has only grown.

Purchasing different refueling aircraft from both Boeing and Northrop-Grumman is simply unfathomable, but apparently, it's an idea whose time has come. It's a testament to a broken defense procurement system and the politics of defense pork. Forty billion dollars is too much money to ignore; that's why a growing number of folks--in the Pentagon, the defense industry and on Capitol Hill--are willing to saddle the Air Force with an additional tanker it doesn't need, and stick taxpayers with the bill.


M Brueschke said...

How is a split buy with two tankers any different than the USAF having the KC-135 and KC-10?

Unknown said...

Different programs from different eras. The KC-135s were acquired in the late 50s and early 60s; the AF bought more than 700, at a bargain price of roughly $6 million each.

The KC-10 came along almost 25 years later. By that point, the KC-135 fleet was getting a bit long in the tooth, and demands for tanker support had soared. With DoD flush with funding during the Reagan defense build-up, the AF could afford to buy a limited number of KC-10s, the tanker version of the DC-10/MD-11 airframe, originally built by McDonnell-Douglas. The larger KC-10 was supposed to augment the fleet and provide additional air refueling support until the next generation tanker came along, and began replacing the KC-135.

Buying two new tankers at the same time is unheard of, and wasteful. Imagine if the AF had bought both KC-135s (based on the Boeing 707 airframe) and an equal number of McDonnell Douglas tankers (built on the DC-8) at the same time. The AF took a pass on that idea, for the reasons listed in the post. Duplicating training and logistics systems is expensive and ill-advised.

Ran Barton said...

Just as a quick correction to an otherwise spot-on post, the A330 is a twin-engine design. The A340 and the A380 are Airbus’s two four-engine designs. Sorry for the pedantry.

Sam Damon said...

Maybe the USAF should look at a tanker version of the C-17?

There's gotta be some back-of-the-envelope studies floating around.

Ken Prescott said...

This mess also shows just how broken antitrust enforcement was under the Clinton Administration.

The DoJ signed off on Boeing buying their only real domestic competitor in the large commercial airframe market, but waged a jihad against Microsoft.

Building software requires knowledge of computers & programming languages, a quiet place to think, and appropriate hardware & software. You could do it in your living room with a laptop.

Building a large commercial airframe requires a rather larger capital investment.

Ran Barton said...

Regarding the KC-17 idea, this is worth a read:

Ran Barton said...

Take two on that link.