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KC-X - Boeing Protest Factor 2 - RISK

In assessing Risk, Boeing and its competitor received equal scores. Both proposal's risk was rated "Low." And yet Boeing is an integrated company with one management team and 75 years of tanker-building experience. Furthermore, the KC-767 will be built on an existing production line that has made 767s for years. Boeingn points to the high risk associated with its evolving multi-country, multi-facility, multi-build approach as contrasted with Boeing's integrated approach to design, build, and certification in existing facilities with experienced personnel. The KC-30 will be built by a combination of a U.S. company and a European one, with two management teams on two continents, with no experience building tankers together-utilizing numerous production facilities across Europe and in an American plant that doesn't yet exist.

Northrop Grumman contends that Boeing's proposed KC-767AT tanker and refueling boom were never built, flown or tested. The first Northrop Grumman KC-45A tanker aircraft was built in July 2007 and flown in September 2007. The Northrop Grumman KC-45A Aerial Refueling Boom System has completed 73 test flights totaling more than 200 flight hours. The boom completed the first in-flight fuel transfer on Feb. 29, 2008 passing 2,000 pounds of fuel to a Portuguese Air Force F-16 combat aircraft. The Northrop Grumman KC-45A is based upon the Royal Australian Air Force KC-30B Multirole Tanker -- which has been built, flown, and is undergoing flight tests. It will be delivered on schedule to the Royal Australian Air Force in early 2009.

The Air Force's evaluation suffered from a fundamental misunderstanding regarding NG/EADS' manufacturing plan. By failing to appreciate both the nature and significance of NG/EADS' plan to switch to an "in-line" manufacturing approach during low-rate initial production (LRIP), the Air Force has reached the unreasonable conclusion that NG/EADS' plan was less risky than Boeing's. LRIP is intended to result in completion of manufacturing development, not initiation of a new manufacturing process and attendant risks.