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.

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Brazil Highlights U.S. Tech Transfer Concerns

November 8, 2009

The Brazilian fighter competition is proving how hard it is for the U.S. to make the case it will support technology transfer demands posed by potential buyers of U.S. equipment.

Brazil has been asking for extensive technology transfer as it considers buying the Dassault Rafale, Saab Gripen or Boeing F/A-18E/F. Early in the competition, the knock on the U.S. campaign was that Washington wouldn’t let enough technology transfer take place to satisfy the Brazilian government. However, U.S. officials say that eventually changed, and that the U.S. put together an extensive tech transfer package.

But in Brazil there are apparently still questions about the U.S. technology release approach, as this article highlights. If Brazilian defense minister Nelson Jobim really doesn’t have confidence in the U.S. committment, then that’s bad news for Boeing, regardless of what promises may have been made when the aircraft maker, along with its rivals, submitted final bids last month.

Washington should get an answer soon, with Brazil promising to announce by year-end the winner of its muddled fighter competition — with President Lula having first announced Rafale had won, only for the military to say the competition was still open.

If Boeing can’t win, the Pentagon may want to undertake the kind of after action France undertook after Rafale failed repeatedly to secure export orders.