KC-X: Split Buy Is Back, Or Is It?

January 17, 2011

There has been a persistent drum beat in Europe about a split buy in the U.S. Air Force’s KC-X tanker program.

Now, with the Pentagon about to solicit “best and final” offers from Boeing and EADS, there are again rumblings in Europe of a split buy. EADS officials note they will talk to the Pentagon about any deal that involves buying their A330-based tankers, whether it is a dual-buy or an outright win.

It is not quite clear what is driving Europe’s insistence a split buy is looming.

One possibility is that the Pentagon’s decision, last month,  to split the U.S. Navy Littoral Combat Ship, is seen as a sign of what is to come. There are big differences, though, between the LCS and KC-X situation; whereas the two LCS designs differ significantly, which could explain why the Pentagon may have decided to take a closer look at the operational benefits of each, that is not the case on the tanker program. Buying a 767-based and A330-based tanker hardly comapares with the operational differences offered by buying both a monohull and catamaran. Replicating the LCS situation on tanker would require one bidder to offer, perhaps, a blended wing body.

So why does the split buy idea keep being resurrected, especially given that, time and time again the Pentagon has said an acquisition of both is not a road it wants to pursue? Among European program watchers, the customer’s preference does not seem to mean much. One likely reason is that in Europe, customer interests are usually subservient to industrial interests and political expedience, so a split would be a natural choice.

Perhaps the best chance for a split buy is competition and program fatigue. The original tanker acquisition plan — at the time conceived as a lease — is now almost a decade old. Will the Pentagon and Congress tire of another competition, GAO protest, and lack of progress to actually fielding hardware to replace the aging KC-135s? If so, perhaps the Europeans may end up being right, even if at the cost of extra taxpayer money being spent on tankers throughout the program’s life.