Air Force KC-X Tanker Aircraft Program:
Background and Issues for Congress

Jeremiah Gertler
Specialist in Military Aviation
July 15, 2010
Congressional Research Service
7-5700
www.crs.gov
RL34398
CRS Report for Congress
P
repared for Members and Committees of Congress

Air Force KC-X Tanker Aircraft Program: Background and Issues for Congress

Summary
On February 24, 2010, the Department of Defense (DOD) released its Request for Proposals for a
program to build 179 new KC-X aerial refueling tankers for the Air Force, a contract valued at
roughly $35 billion.
Bidding closed on July 9, 2010, with three offerors submitting bids. The European Aeronautic
Defense and Space Company (EADS) offered a KC-X design based on the Airbus A330 airliner,
to be built in Mobile, AL. Boeing offered a KC-X design based on its 767 airliner, to be built in
Seattle, WA, and Wichita, KS. A team of the Ukranian airframe maker Antonov and U.S.
Aerospace offered a variant of the An-124 freighter, with production location uncertain.
The KC-X acquisition program is a subject of intense interest because of the dollar value of the
contract, the number of jobs it would create, the importance of tanker aircraft to U.S. military
operations, and because DOD’s attempts to acquire a new tanker over the past several years have
ultimately failed. DOD’s proposed new KC-X acquisition competition strategy poses several
potential oversight issues for Congress, including the following: Has DOD adequately defined the
required capabilities for the KC-X and established a fair and adequate framework for scoring and
evaluating bids against those required capabilities? Should a June 30, 2010, World Trade
Organization (WTO) ruling on commercial aircraft subsidies be taken into account in evaluating
the KC-X bids? Should Boeing’s pricing data for the 2007-2008 KC-X competition be shared
with EADS in a manner equivalent to how Northrop/EADS’s pricing data for the 2007-2008
competition was shared with Boeing? Should the Air Force be in charge of the new KC-X
competition?
FY2010 defense authorization bill: The conference report (H.Rept. 111-288 of October 7, 2009)
on the FY2010 defense authorization act (H.R. 2647/P.L. 111-84 of October 28, 2009) authorizes
the Administration’s request for $439.6 million in Air Force research and development funding
for the KC-X program. Section 1081 of the act amends Section 1081(a) of the FY2008 defense
authorization act (H.R. 4986/P.L. 110-181 of January 28, 2008) to require the Secretary of the Air
Force to conduct a pilot program to assess the feasibility and advisability of using commercial
fee-for-service air refueling tanker aircraft for Air Force operations, unless the Secretary of
Defense submits a notification that pursuing such a program is not in the national interest. Section
1082 provides the Secretary of the Air Force authority to use multiyear contracts to conduct the
pilot program described in Section 1081 of the FY2008 defense authorization act.
FY2010 DOD appropriations bill: In lieu of a conference report, the House Appropriations
Committee on December 15, 2009, released an explanatory statement on a final version of H.R.
3326. This version was passed by the House on December 16, 2009, and by the Senate on
December 19, 2009, and signed into law on December 19, 2009, as P.L. 111-118.
The bill establishes a Tanker Replacement Transfer Fund in the amount of $291.7 million. In lieu
of a conference report on H.R. 3326, the House Appropriations Committee on December 15,
2009, released an explanatory statement on an intended final version of H.R. 3326. The
explanatory statement provides $15 million for management of the tanker program.

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Air Force KC-X Tanker Aircraft Program: Background and Issues for Congress

Contents
Introduction ................................................................................................................................ 1
Background ................................................................................................................................ 2
Air Force Refueling Tankers ................................................................................................. 2
Roles and Missions ......................................................................................................... 2
Current Tanker Fleet ....................................................................................................... 2
KC-X Program Basics........................................................................................................... 4
Numbers of Aircraft ........................................................................................................ 4
Acquisition Cost ............................................................................................................. 4
DOD’s New KC-X Competition Strategy and Draft RFP ....................................................... 4
Response to the Draft RFP .............................................................................................. 5
Final RFP........................................................................................................................ 6
DOD Statements on KC-X Priority........................................................................................ 7
Industrial Base ...................................................................................................................... 8
Employment Effects as Asserted for 2007-2008 Competition .......................................... 8
Domestic Content as Discussed in 2007-2008 Competition ............................................. 8
Issues for Congress ..................................................................................................................... 9
Required Capabilities and Evaluation Process ....................................................................... 9
Air Force or OSD Management of Acquisition .................................................................... 11
World Trade Organization (WTO) Ruling............................................................................ 12
Was Extending the Period for Bids Appropriate? ................................................................. 12
Legislative Activity for FY2011 ................................................................................................ 13
FY2011 Funding Request .................................................................................................... 13
FY2011 Defense Authorization Bill (H.R. 5136/S. 3454)..................................................... 13
House ........................................................................................................................... 13
Senate ........................................................................................................................... 14

Tables
Table 1. Major Differences Between KC-X Draft RFP and Final Document................................. 6
Table C-1. Boeing 767 Suppliers ............................................................................................... 28
Table C-2. Airbus 330/350 Suppliers ......................................................................................... 29

Appendixes
Appendix A. Legislative Activity for FY2010............................................................................ 15
Appendix B. KC-X Competition of 2007-2008.......................................................................... 24
Appendix C. Boeing 767 and Airbus 330 Suppliers ................................................................... 28
Appendix D. Potential Longevity of KC-135 Fleet .................................................................... 31

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Air Force KC-X Tanker Aircraft Program: Background and Issues for Congress

Contacts
Author Contact Information ...................................................................................................... 32
Acknowledgments .................................................................................................................... 32

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Air Force KC-X Tanker Aircraft Program: Background and Issues for Congress

Introduction
On February 24, 2010, the Department of Defense (DOD) released its Request for Proposals for a
program to build 179 new KC-X1 aerial refueling tankers for the Air Force. The 179 KC-Xs,
which would be procured at a maximum rate of 15 aircraft per year, would replace roughly one-
third of the Air Force’s aging fleet of KC-135 aerial refueling tankers. The Air Force and the U.S.
Transportation Command state that replacing the KC-135s is their highest recapitalization
priority. The contract award is expected in mid-November.2
The Administration’s proposed FY2011 defense budget requested $863.9 million in Air Force
research and development funding to begin the KC-X acquisition.3
The estimated total value of the 179-aircraft KC-X program is roughly $35 billion. DOD
anticipated announcing the winner of the competition in the summer of 2010. However, the team
of Northrop Grumman and the European Aeronautic Defence and Space Company (EADS), the
parent company of Airbus, withdrew from the competition on March 8, 2010, leaving Boeing as
the sole expected bidder.
DOD then extended the bid deadline by 60 days, to July 9, 2010.4 Subsequently, on April 20,
2010, EADS announced that its North American division would enter the competition on its
own.5
Bidding closed on July 9, 2010, with three offerors submitting bids. EADS offered a KC-X
design based on the Airbus A330 airliner, to be built in Mobile, AL. Boeing offered a KC-X
design based on its 767 airliner, to be built in Seattle, WA, and Wichita, KS. A team of the
Ukranian airframe maker Antonov and U.S. Aerospace offered a twin-engine variant of the An-
124 freighter, with production location uncertain.
The KC-X acquisition program is a subject of intense interest because of the dollar value of the
contract, the number of jobs it would create, the importance of tanker aircraft to U.S. military
operations, and because previous attempts by DOD to move ahead with a KC-X acquisition
program over the last several years have led to controversy and ultimately failed. The history of
those earlier attempts forms an important part of the context for DOD’s proposed new KC-X
competition, particularly in terms of defining the required capabilities for the KC-X and
designing and conducting a fair and transparent competition.
The most recent failed attempt to acquire KC-X was a competition between Boeing and a team of
Northrop Grumman and EADS that resulted in a DOD award to Northrop/EADS in February
2008. Boeing protested that award, and in June 2008, the Government Accountability Office
(GAO) sustained Boeing’s protest, agreeing with Boeing that the competition was conducted in a

1 In the designation KC-X, C means a cargo-type aircraft, K means that the aircraft is specifically an aerial refueling
tanker, and X means the design of the aircraft has not been determined.
2 “Be Ready Nov. 12, Tanker Builders Told,” Boston Globe, May 5, 2010.
3 The requested funding is found in the Air Force’s research development, test and evaluation (RDT&E) account in
program element (PE) 0605221F, KC-X, Next Generation Aerial Refueling Aircraft.
4 Michael Bruno, “USAF KC-X Bid Deadline Extended 60 Days,” AviationWeek/Ares blog, March 31, 2010.
5 John Reed, “EADS Confident Its KC-45 Can Compete for USAF Tanker Bid,” DefenseNews.com, April 20, 2010.
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Air Force KC-X Tanker Aircraft Program: Background and Issues for Congress

flawed manner.6 GAO’s ruling prompted DOD to cancel the 2008 KC-X competition and
temporarily take control of the KC-X acquisition away from the Air Force. The Bush
Administration decided to defer the next attempt at a KC-X acquisition program to the Obama
Administration.
DOD’s new KC-X acquisition competition strategy poses several potential oversight issues for
Congress, including the following: Has DOD adequately defined the required capabilities for the
KC-X and established a fair and adequate framework for scoring and evaluating the bids against
these required capabilities? Should the Air Force be in charge of the new KC-X competition? If
there is only one bidder, how will DOD determine an appropriate price for the tankers and control
costs throughout the program?
The issues for Congress in FY2011 are whether to approve, reject, or modify DOD’s new KC-X
competition strategy, and whether to approve, reject, or modify the Air Force’s request for
FY2011 research and development funding for the new KC-X program. Congress’s decision on
these issues could affect DOD capabilities and funding requirements, and the aircraft
manufacturing industrial base.
Background
Air Force Refueling Tankers
Roles and Missions
Aerial refueling aircraft—commonly called tankers—provide in-flight refueling services to
bombers, fighters, airlifters, surveillance aircraft, and other types of aircraft flown by the U.S.
military. Tankers enable other aircraft to deploy quickly to distant theaters of operation, and to
remain in the air longer while operating in those theaters. Aerial refueling capability is a critical
component of the U.S. military’s ability to project power overseas and to operate military aircraft
in theater with maximum effectiveness.
The Air Force operates the U.S. long-range tanker fleet, the subject of this report. The Navy and
Marine Corps also operate shorter-range tankers in support of tactical missions.
Current Tanker Fleet
KC-135 Stratotanker
The Air Force’s current fleet of large tankers consists mostly of 415 re-engined KC-135R
Stratotankers. The first KC-135 entered the Air Force inventory in 1956, and the final one was
delivered in 1964. DOD and Air Force documents for FY2010 state variously that average age of

6 For more on GAO bid protests generally, see CRS Report R40227, GAO Bid Protests: Trends, Analysis, and Options
for Congress
, by Moshe Schwartz and Kate M. Manuel, and CRS Report R40228, GAO Bid Protests: An Overview of
Timeframes and Procedures
, by Kate M. Manuel and Moshe Schwartz.
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the KC-135 fleet in 2009 is 45 years,7 47 years,8 48 years,9 or more than 48 years.10 The aircraft
have received various upgrades and modifications over the years, including new engines.11 DOD
states that if new tankers are procured at a rate of 15 per year, the last KC-135R would be more
than 80 years old at retirement. (For a discussion of the potential longevity of the KC-135 fleet,
see Appendix D.) On September 15, 2009, it was reported that:
It will cost the Air Force up to $6 billion per year late in the next decade to maintain its aging
fleet of KC-135 tankers, according to a senior service official…
The cost of maintaining the Stratotankers will continue to rise as the next-generation KC-X
tanker program continues to slip, Air Mobility Command chief Gen. Arthur Lichte said
during a briefing today.12
KC-10 Extender
The Air Force’s fleet of large tankers also includes about 59 KC-10 Extender aerial refueling
aircraft, the first of which entered service in 1981.13 The KC-10 is a much larger aircraft than the
KC-135 or the Boeing KC-X candidate.

7 See, for example, Department of Defense, Fiscal Year 2010 Budget Request, Summary Justification, May 2009, p. 1-
50, or United States Air Force, FY 2010 Budget Overview, SAF/FMB, May 2009, p. 48.
8 See, for example, Department of Defense, Fiscal Year 2010 Budget Request, Summary Justification, May 2009, p. 1-
16.
9 See, for example, Department of the Air Force, Fiscal Year (FY) 2010 Budget Estimates, Research , Development,
Test and Evaluation (RDY&E) Descriptive Summaries, Volume II, Budget Activities 4 – 6
, May 2009, Exhibit R-2,
RDT&E Budget Item Justification, [PE]0605221F, KC-X, Next Generation Aerial Refueling Aircraft, page 1 of 8
(page 559 of the overall document).
10 See, for example, Department of the Air Force, Presentation to the House Armed Services Committee Subcommittee
on Air and Land Forces, United States House of Representatives, Combined Statement of: Lieutenant General Daniel J.
Darnell, Air Force Deputy Chief Of Staff For Air, Space and Information Operations, Plans And Requirements
(AF/A3/5) Lieutenant General Mark D. Shackelford, Military Deputy, Office of the Assistant Secretary of the Air
Force for Acquisition (SAF/AQ) Lieutenant General Raymond E. Johns, Jr., Air Force Deputy Chief of Staff for
Strategic Plans And Programs (AF/A8), May 20, 2009, p. 17.
11 Air Force Fact sheet on the KC-135, available online at http://www.af.mil/information/factsheets/factsheet.asp?fsID=
110. The fact sheet was accessed by CRS on December 7, 2009, at which time it carried a date of October 2009. The
fact sheet states that:
Of the original KC-135A's, more than 415 have been modified with new CFM-56 engines produced
by CFM-International. The re-engined tanker, designated either the KC-135R or KC-135T, can
offload 50 percent more fuel, is 25 percent more fuel efficient, costs 25 percent less to operate and
is 96 percent quieter than the KC-135A.
Under another modification program, a re-engined tanker with the TF-33-PW-102 engine was
designated the KC-135E. In 2009, the last KC-135E retired from the inventory.
Through the years, the KC-135 has been altered to do other jobs ranging from flying command post
missions to reconnaissance. RC-135s are used for special reconnaissance and Air Force Materiel
Command’s NKC-135A’s are flown in test programs. Air Combat Command operates the OC-135
as an observation platform in compliance with the Open Skies Treaty.
The KC-135R/T model aircraft continue to undergo life-cycle upgrades to expand its capabilities
and improve its reliability. Among these are improved communications, navigation, auto-pilot and
surveillance equipment to meet future civil air traffic control needs.
12 Marcus Weisgerber, “KC-135 Maintenance Costs to Reach $6 Billion Per Year,” InsideDefense.com (DefenseAlert –
Daily News)
, September 15, 2009.
13 Air Force fact sheet on the KC-135, available online at http://www.af.mil/information/factsheets/factsheet.asp?id=
(continued...)
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KC-X Program Basics
Numbers of Aircraft
DOD envisages replacing the KC-135 fleet in three stages. The 179 new KC-Xs would replace
roughly one-third of the KC-135 fleet. Tankers to be procured in the second and third stages
would be designated KC-Ys (envisioned as a KC-X continuation or follow-on) and KC-Zs (a
probable replacement for the KC-10 fleet).
Acquisition Cost
A March 2009 GAO report states that the procurement cost of 179 KC-Xs could be about $35
billion,14 or an average of about $195 million per aircraft. A September 25, 2009, news report
quotes an unnamed U.S. military official as saying the program could cost between $25 billion
and $50 billion.15 The Air Force testified in May 2009 that it had budgeted about $3.5 billion per
year for a projected procurement rate of 12 to 18 aircraft per year,16 which would equate to an
average cost of about $195 million to $290 million per aircraft. The Northrop/EADS bid in the
2008 competition was reported as “$184 million per plane for the first 68 tankers.”17
DOD’s New KC-X Competition Strategy and Draft RFP
According to DOD, key features of the new KC-X competition strategy—which are taken from
the briefing slides and of the September 24, 2009, DOD news briefing at which the proposed
strategy was announced—include the following:
• The proposed KC-X competition strategy, known more formally as the Source
Selection Strategy, was devised jointly by the Office of the Secretary of Defense
(OSD) and the Air Force and was approved by the Secretary of Defense.

(...continued)
109. ]. The fact sheet was accessed by CRS on December 7, 2009, at which time it carried a date of September 2008.
The fact sheet states that the KC-10 can transport up to 75 people and nearly 170,000 pounds (76,560 kilograms) of
cargo a distance of about 4,400 miles (7,040 kilometers) unrefueled.
In addition to KC-135s and KC-10s, the Air Force, Marine Corps, and Navy operate additional smaller refueling
aircraft. The Air Force uses modified C-130s to refuel Air Force special operations and combat search and rescue
helicopters. The Marine Corps uses modified C-130s to refuel Marine helicopters and fighters. Some Navy aircraft
have been configured to give them a secondary capability to refuel other Navy or Marine Corps aircraft in flight. The
Navy also provides some aerial refueling through a private fee-for-service vendor.
14 Government Accountability Office, Defense Acquisitions[:] Assessments of Selected Weapon Programs, GAO-09-
326SP, March 2009, p. 156.
15 Jason Simpson, “Officials: KC-X Program Could Cost Up To $50 Billion,” InsideDefense.com (DefenseAlert –
Daily News)
, September 25, 2009.
16 Department of the Air Force, Presentation to the House Armed Services Committee Subcommittee on Air and Land
Forces, United States House of Representatives, Combined Statement of: Lieutenant General Daniel J. Darnell, Air
Force Deputy Chief Of Staff For Air, Space and Information Operations, Plans And Requirements (AF/A3/5)
Lieutenant General Mark D. Shackelford, Military Deputy, Office of the Assistant Secretary of the Air Force for
Acquisition (SAF/AQ) Lieutenant General Raymond E. Johns, Jr., Air Force Deputy Chief of Staff for Strategic Plans
And Programs (AF/A8), May 20, 2009, p. 17
17 Colin Clark, “Northrop Drops Tanker Bid,” DoD Buzz, March 8, 2010.
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• The Air Force will be the Source Selection Authority (SSA) for the competition,
as announced by the Secretary of Defense on September 16, 2009.
• DOD intends to select a sole winner for the KC-X competition; DOD does not
intend to split the KC-X program between the two bidders.
• The competition will be evaluated on a best-value (rather than lowest-cost) basis
that will take both price and non-price factors into account. The evaluation will
include mandatory and non-mandatory/trade space capabilities, acquisition price,
warfighting effectiveness, and day-to-day efficiency.
• The competition will differ in many details from the 2007-2008 competition and
does not constitute a re-run of the 2007-2008 competition. DOD states that,
among other things, the selection criteria to be used in the new competition are
more precise and less subjective than those used in the 2007-2008 competition.
• The contracts to be awarded are to be fixed-price type contracts. The winning
bidder will receive a fixed-price incentive fee contract with a ceiling for the
Engineering and Manufacturing Development (EMD) phase of the program,
which includes the first four aircraft. A firm fixed-price (FFP) contract will be
used for the next 64 aircraft (production lots 1 through 5). A not-to-exceed
contract will be used for the final 111 aircraft (lots 6 through 13). An FFP
contract will be used for five years of initial contractor support.
• Following the release of the final RFP, bidders will have about 75 days to prepare
and submit their bid. The government will evaluate the bids for about 120 days,
and prepare a contract award over a subsequent period of about 30 days. DOD
anticipates awarding the contract in the summer of 2010.
• The first KC-X is projected to be delivered in 2015, and Initial Operating
Capability (IOC) for the KC-X is scheduled for 2017. Delivery of all 179 KC-Xs
will occur over a period of more than 15 years. As KC-Xs are integrated into the
fleet, the Air Force intends to begin evaluating its future tanker needs and begin
work on the KC-Y program.
Response to the Draft RFP
On December 1, 2009, Wes Bush, the president and chief executive officer of Northrop
Grumman, sent a letter to Under Secretary Carter stating that unless the draft RFP were
substantially revised, Northrop Grumman would decline to bid in the KC-X competition. A press
report that day stated:
Northrop Grumman Corp., the third- largest U.S. defense company, said it won’t bid for the
$35 billion Air Force refueling tanker program unless the draft request for proposals is
changed, citing “financial burdens.”
The Pentagon has declined to amend the request and didn’t plan to “substantially” address
Northrop’s concerns, Chief Executive Officer Wes Bush wrote in a Dec. 1 letter to Pentagon
acquisition chief Ashton Carter. “As a result, I must regrettably inform you that, absent a
responsive set of changes in the final RFP, Northrop Grumman has determined that it cannot
submit a bid,” he wrote.
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Northrop and partner European Aeronautic Defence & Space Co. were vying against Boeing
Co. to build the refueling tankers. The competition was restarted in September after Boeing
successfully protested the award to Northrop and EADS last year.
The Pentagon’s request shows a “clear preference” for a smaller tanker than the modified
Airbus A330 that Northrop plans to offer, and continuing to compete for the tankers would
impose “contractual and financial burdens on the company that we simply cannot accept,”
Bush wrote in the letter.
“The Department regrets that Northrop Grumman and Airbus have taken themselves out of
the tanker competition and hope they will return when the final request for proposals is
issued,” Pentagon spokesman Bryan Whitman said in an e-mail. “The Department wants
competition but cannot compel the two airplane makers to compete.”…
Both competitors “have suggested changes to the request for proposals that would favor their
offering,” Whitman wrote in the e-mail. “But the Department cannot and will not change the
warfighter requirements for the tanker to give advantage to either competitor.”18
Final RFP
The final KC-X RFP was issued on February 24, 2010. Overall, the final requirements for the
KC-X aircraft appeared to have changed little from those in the draft RFP. One requirement was
eliminated (bringing the total to 372), and none added. The financial structure of the proposed
contract, however, changed substantially.
Table 1. Major Differences Between KC-X Draft RFP and Final Document
Issue
Draft RFP
Final RFP
Microwave Landing System
Required
Not required
Large Aircraft Infrared
Contractor to procure and include in
Government will furnish
Countermeasures
price
Contract type
Development phase: Fixed-price with
Development phase unchanged.
incentive fee.
Production lots 1-2: Firm fixed price.
Production lots 1-2 unchanged.
Production lots 3-5: Firm fixed price,
Production lots 3-5: Not to Exceed,
with 5% inflation trigger for price
with 2.5% inflation trigger.
adjustment.
Production lots 6-13: Not to Exceed,
Production lots 6-13: Not to Exceed,
with 5% trigger.
with 1% trigger.
Contractor support: Firm fixed price.
Contractor support unchanged.
Mission modeling
IFARA (Integrated Fleet Air Refueling
IFARA ground rules updated “to
Assessment) model used to determine ensure they reflected current
operational suitability.
operational practices.”a

18 Gopal Ratnam and Alison Fitzgerald, “Northrop Declines Tanker Bid on ‘Financial Burdens’ (Update2),”
Bloomberg.com, December 1, 2009.
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Issue
Draft RFP
Final RFP
Alert quick-start
Did not specify temperatures at which Established a range of temperatures
power carts were allowed for
for which power carts could be
environmental control.
allowed for both heating and cooling
the aircraft.
Fuel burn
Penalty if actual fuel use exceeds
Incentive if fuel use is less than
contractor’s proposal.
contractor’s proposal.
Proposal due date
60 days
75 days
Source: CRS analysis.
a. Briefing script of Dr. Ashton Carter, Undersecretary of Defense for Acquisition, Technology, & Logistics,
obtained by CRS.
After evaluating the final RFP, on March 8, 2010, the Northrop/EADS team withdrew from the
competition.19
DOD Statements on KC-X Priority
DOD states that “with the average age of the [KC-135] inventory over 45 years old, a new Tanker
has become an operational necessity as well as a financially prudent decision to meet refueling
requirements.”20 The U.S. Transportation Command testified in February 2009 that:
My number one recapitalization priority is replacing the fleet of 415 Eisenhower-era KC-
135s with a new platform to preserve a unique asymmetric advantage for our nation. The
KC-X with multipoint refueling allowing same sortie service to Air Force, Navy, Marine and
coalition aircraft will address the significant risk we are currently carrying in air capacity and
address further capability risks associated with an airframe that is almost 50 years old - and
will be over 80 years old by the time we recapitalize all of them. The ability to carry cargo
and operate forward with defensive systems will be a game changer when the aircraft is not
needed as a tanker. Further delays in replacing this aircraft will add significant risk to our
ability to rapidly project combat power to support the nation and our allies. It is imperative to
expedite a smart, steady reinvestment program.21
The Air Force testified in May 2009 that:
The KC-X remains the Air Force’s highest procurement and recapitalization priority. Air
refueling is critical to the entire Joint and Coalition team’s ability to project combat power
around the world. The current fleet of Eisenhower-era KC-135s averages over 48 years old.
KC-X tankers will provide increased aircraft availability, more adaptable technology, more
flexible employment options, and greater overall capability than the current fleet of KC-
135R/T tankers. The KC-X will be able to refuel receptacle and probe-equipped aircraft on
every mission and to receive fuel in-flight plus carry cargo, passengers, & conduct

19 See, inter alia, Colin Clark, “Northrop Drops Tanker Bid,” DoD Buzz, March 8, 2010 and John Reed, “Northrop
Won't Bid on USAF Tanker,” DefenseNews.com, March 8, 2010.
20 Department of Defense, Fiscal Year 2010 Budget Request, Summary Justification, May 2009, p. 1-50.
21 Statement of General Duncan J. McNabb, USAF, Commander, United States Transportation Command, Before the
House Armed Services Air & Land Forces and Seapower & Expeditionary Forces Subcommittees [Hearing] On the
State of the Command, February 25, 2009, pp 6-7.
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aeromedical evacuation. The KC-X will also be equipped with defensive systems to enhance
its utility to the warfighter.
The KC-X program is based on a planned purchase of 179 aircraft and is the first of up to
three recapitalization programs to replace the entire legacy fleet. The Air Force has budgeted
approximately $3.5 billion per year for a projected annual production rate of 12-18 aircraft.
But even with this level of investment, it will take several decades to replace the 400+ KC-
135s. Given the age of the fleet and the time required to recapitalize, it is absolutely critical
for the Air Force to move forward now on this program.22
Industrial Base
Employment Effects as Asserted for 2007-2008 Competition
Boeing’s plan for the 2007-2008 KC-X competition called for 767s to be assembled at the Boeing
plant in Everett, WA, and be converted into tankers (KC-767s) at Boeing’s plant in Wichita, KS.
Boeing claimed that 44,000 U.S. workers from 300 U.S. suppliers would be involved in building
the KC-767.23
The Northrop/EADS plan for the 2007-2008 KC-X competition called for assembling its KC-X
(originally called the KC-30, and later the KC-45) at a new plant planned for Mobile, AL.
Northrop/EADS stated that assembling KC-Xs there would create 2,000 new jobs. Northrop
originally stated that its proposal would result in 25,000 direct and indirect U.S. jobs—a
calculation that Northrop/EADS stated was based a Department of Commerce employment
model. Subsequently, Northrop raised its job estimate to approximately 48,000 direct and indirect
jobs and 230 suppliers from 49 states. Northrop based the revised estimate on feedback received
from suppliers and a Department of Labor employment model.24 In January 2008, EADS
announced that it would conduct final assembly of all commercial freighter versions of the Airbus
330-200 at the Mobile, AL, facility, increasing the potential number of new jobs that would be
created at Mobile if the Northrop/EADS KC-X were selected.25
Domestic Content as Discussed in 2007-2008 Competition
In the 2007-2008 KC-X competition, some observers questioned whether the Northrop/EADS
proposal satisfied requirements in the Buy American Act, which requires the federal government
to purchase domestically manufactured goods. The statute defines goods to have been
domestically manufactured if their components have “substantially all” been mined, produced, or

22 Department of the Air Force, Presentation to the House Armed Services Committee Subcommittee on Air and Land
Forces, United States House of Representatives, Combined Statement of: Lieutenant General Daniel J. Darnell, Air
Force Deputy Chief Of Staff For Air, Space and Information Operations, Plans And Requirements (AF/A3/5)
Lieutenant General Mark D. Shackelford, Military Deputy, Office of the Assistant Secretary of the Air Force for
Acquisition (SAF/AQ) Lieutenant General Raymond E. Johns, Jr., Air Force Deputy Chief of Staff for Strategic Plans
And Programs (AF/A8), May 20, 2009, p. 17.
23 Boeing press release, “Boeing KC-767 Tanker Win Would Benefit Arizona Economy,” November 26, 2007.
24 Press release, “Northrop Grumman Updates Job Projections for Air Force KC-45A Program,” March 11, 2008,
available online at http://www.irconnect.com/noc/press/pages/news_releases.html?d=138001.
25 Jen DiMascio, “Airbus Vows to Boost Business in Alabama If it Can Make Tankers There,” Defense Daily, January
15, 2008.
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manufactured within the United States. 26 The definition of “substantially all” has been left to the
Federal Acquisition Regulations (FAR). In the FAR, a good is considered “domestic” if the cost
of domestically produced components exceeds 50% of the value of the whole article.27
One way a KC-X contractor could potentially satisfy requirements of the Buy American Act is by
having 50% or more of total cost of their proposed aircraft produced in the United States.
Reportedly, approximately 85% of Boeing’s KC-X in the 2007-2008 competition would have
been manufactured in the United States.28 Northrop/EADS stated that “at least 58 percent” of its
proposal in the 2007-2008 KC-X competition would be comprised of products manufactured by
U.S.29 For a listing of Boeing 767 suppliers, see Appendix C.
Issues for Congress
DOD’s proposed new KC-X acquisition competition strategy poses several potential oversight
issues for Congress, including the following:
• Has DOD adequately defined the required capabilities for the KC-X and
established a fair and adequate framework for scoring and evaluating bids against
these required capabilities?
• Should the Air Force be in charge of the new KC-X acquisition?
• Should DOD take into account the World Trade Organization (WTO) ruling that
EADS/Airbus received improper subsidies for several airplanes, including the
A330?
• Was extending the period for bids appropriate?
Information on each of these issues is presented below.
Required Capabilities and Evaluation Process
Has DOD adequately defined the required capabilities for the KC-X and established a fair and
adequate framework for scoring and evaluating the Boeing and Northrop/EADS bids against
these required capabilities?

This question is of particular interest to many observers because of concerns about whether
requirements were adequately defined and fairly evaluated in previous attempts to implement a
KC-X acquisition program, and because the latest RFP de-emphasizes the value of capabilities
beyond the minimum required.

26 For more information on the Buy American Act, see CRS Report 97-765, The Buy American Act: Requiring
Government Procurements to Come from Domestic Sources
, by John R. Luckey.
27 FAR § 25.101.
28 Eric Rosenburg, “Boeing Duels for Tanker Deal,” Seattle Post-Intelligencer, September 30, 2007, available online at
http://seattlepi.nwsource.com/business/333751_tanker01.html.
29 “Northrop Grumman’s KC-45 Tanker: Making the Right Choice,” January 25, 2007, available online at
http://www.northropgrumman.com/kc45/benefits/choice.html.
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A November 23, 2009, news report stated:
The Pentagon will consider making changes to the next-generation tanker draft request for
proposals even though the Air Force knows what it wants and needs in new aerial refueling
aircraft, the Defense Department‘s top weapons buyer said today…
“Some [requirements] are in the trade space that will be taken into account in the event that
the adjusted prices are very close,” [Ashton Carter] said. “The others are the ones that the
warfighter says, ‘This is what I want on Day 1. I want a tanker that can go to war.’ He’s
entitled to say that because he’s been flying tankers for a long time.”30
At the September 24, 2009, DOD news briefing on DOD’s proposed new KC-X competition
strategy, Secretary of the Air Force Michael B. Donley stated:
Let’s focus on requirements for a minute. Just to give you a broad overview, the Capabilities
Development Document [CDD] is the very high-level overview of the requirements for the
KC-X going forward.
The CDD as it’s referred to is the same CDD that was reviewed and approved in December
of 2006. The Air Force revisited this early this year in January. The Joint Requirements
Oversight Council also reviewed it in February. And no changes have been made. Again this
is the very high-level, what are our requirements going forward for a KC-X aircraft?
The key work that has been done is at the Systems Requirement Document, the SRD, level.
And here we undertook significant changes, without changing the requirements but to make
a better linkage between the requirements written by the warfighter and the RFP that’s going
out tomorrow…
You may recall that in the last solicitation, there were about 808 requirements listed, for the
KC-X, of which about 37 were mandatory requirements.
And this provided an extensive amount of trade space in those requirements to determine
how a selection and—how an evaluation and then selection might be made.
However, by doing so, the offers indicated last time some confusion, because they did not
clearly understand what the warfighter valued most. Another factor was that the way the
requirements were written and their distribution throughout the RFP also left some
uncertainty and confusion.
We've taken those 808 and we have boiled them down to the 373 mandatory, system-level
requirements, which reflect what the warfighter needs on the first day of the war. When this
aircraft is delivered, the warfighter will be able to take those capabilities and go to war.
That’s the fundamental baseline requirements that Air Mobility Command has put value on
and which they need to make this a successful program.
Above that, we have identified 93 trade-space requirements. They are non-mandatory,
above-threshold requirements that would provide additional capability to the warfighter,
additional value, but not to such an extent that the warfighter would be willing to pay that
much more for these capabilities. And Secretary Carter will explain a little bit later how this

30 Marcus Weisgerber, “Carter: Air Force Knows What It Wants In New Tanker,” InsideDefense.com (DefenseAlert –
Daily News)
, November 23, 2009.
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relationship between the mandatory and the non-mandatory, above-threshold requirements
relate to each other.
Our task here was to not only take out the duplication, to combine the requirements where
we thought they could be combined, but to write them clearly and precisely. And these
requirements will be evaluated in an acceptable/non-acceptable basis. 31
Air Force or OSD Management of Acquisition
Should the Air Force be in charge of the new KC-X acquisition?
In the wake of earlier unsuccessful attempts by the Air Force to implement a KC-X acquisition
program, some observers questioned whether the new KC-X acquisition should be managed by
the Office of the Secretary of Defense (OSD) rather than the Air Force.
OSD’s response is that the acquisition is a hybrid, in that the process was designed by OSD, then
given to the Air Force to execute. This structure was deliberately chosen to address some of the
issues emerging from the protest of the 2008 KC-X award.32 For additional discussion of the RFP,
Boeing’s protest, and GAO’s ruling on Boeing’s protest, see Appendix B.
On September 16, 2009, Secretary of Defense Robert Gates announced that the Air Force would
be the source-selection authority for the KC-X acquisition. Gates stated:
And finally, I am pleased to announce that source selection authority is returning to the Air
Force for the KC-X refueling tanker, with a draft Request for Proposals to follow. I don’t
need to belabor the importance of getting this done soon and done right, and my office will
continue to have a robust oversight role. We are committed to the integrity of the selection
process, and cannot afford the kind of letdowns, parochial squabbles, and corporate food-
fights that have bedeviled this effort over the last number of years.
I have confidence that the KC-X selection authority is in good hands with the service’s
leadership team of Secretary Donley and General Schwartz. Indeed, the Air Force is
fortunate to have a deep bench of senior flag officers, including four Combatant
Commanders—as many as any other service, including the first Air Force officer to lead
Southern Command. I depend greatly on their expert advice and strategic vision.33
At the September 24, 2009, DOD news briefing on DOD’s proposed new KC-X competition
strategy, William J. Lynn II, the Deputy Secretary of Defense, stated that:
This is—will be a collaborative process. It has been to this point. The Office of the Secretary
of Defense, Ash and I and our teams, have been working very closely in designing the
strategy that’s behind this source selection. When we get to the actual execution phase, the
evaluation phase, there will be, as Secretary Donley will describe, some independent review

31 Transcript of DOD News Briefing with Deputy Secretary of Defense William Lynn, Under Secretary of Defense
Ashton Carter, and Secretary of the Air Force Michael Donley, September 24, 2009, available online at
http://www.defenselink.mil/transcripts/transcript.aspx?transcriptid=4484.
32 CRS interview with DOD senior acquisition officials, December 31, 2009.
33 Text of address as delivered by Secretary of Defense Robert M. Gates, at Air Force Association convention, National
Harbor, MD, September 16, 2009, available online at http://www.defenselink.mil/speeches/speech.aspx?speechid=
1379.
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panels: both an internal Air Force panel, an OSD-led panel on process and a(n) engineering
panel that will include talent from not just the Air Force and OSD but other services,
particularly the Navy. 34
World Trade Organization (WTO) Ruling
Should DOD take into account the WTO ruling that EADS/Airbus received improper subsidies for
several airplanes, including the A330?

On June 30, 2010, the World Trade Organization released a ruling “that some launch aid subsidies
Airbus received from European governments for its aircraft programs are ‘actionable,’” including
the A330 on which the EADS tanker is expected to be based.35 Boeing supporters have argued
that DOD should take the WTO ruling on commercial aircraft subsidies into account in the KC-X
competition, in part because they may artificially lower the price of an aircraft based on a
subsidized platform.36 Members of each chamber have indicated that the question may become a
matter of legislative attention.37
DOD has maintained that it does not have the authority to take WTO decisions into account:
“The judgment inside the executive branch—not just the Air Force or [Defense Department],
but working with our interagency partners—is that it would not be appropriate for the
Department of Defense, in a single contract action, to take action representative of a WTO
decision,” [Air Force Secretary Michael Donley] responded.38
Was Extending the Period for Bids Appropriate?
After the Northrop/EADS team withdrew from the KC-X competition, numerous sources reported
a logical chicken-and-egg issue: EADS might be willing to submit an independent bid were DOD
willing to extend the bidding period to allow EADS to assemble a proposal, on the one hand;
DOD might be willing to extend the bidding period once EADS decided to bid, on the other.39
Finally, DOD announced on March 31, 2010, that it would extend the bidding period 60 days, to
July 9, 2010.40 EADS’s announcement that it would submit a bid followed on April 20, 2010.41
Critics have charged that the extension was both improper and a display of favoritism to EADS.42

34 Transcript of DOD News Briefing with Deputy Secretary of Defense William Lynn, Under Secretary of Defense
Ashton Carter, and Secretary of the Air Force Michael Donley, September 24, 2009, available online at
http://www.defenselink.mil/transcripts/transcript.aspx?transcriptid=4484.
35 “WTO Report Says Some EU Launch Aid Was Illegal,” Aerospace Daily, July 1, 2010.
36 “Murray Asks Gates To Weigh In On WTO Dispute As Tanker Competition Looms,” The Hill, September 16, 2009.
37 See, inter alia, Emelie Rutherford, “Smith Eyes WTO Tanker Language For Defense Bill,” Defense Daily, May 14,
2010; Amy Butler, “Proposal In Senate To Punish WTO Violators In Tanker Deal,” Aerospace Daily, May 13, 2010..
38 Scott Fontaine, “Senators blast Donley, Schwartz on KC-X process,” Air Force Times, May 12, 2010.
39 Andrea Shalal-Esa, “UPDATE 1-Pentagon-Still in talks on longer tanker deadline,” Reuters.com, March 23, 2010.
40 Andrea Shalal-Esa, “Chronology: EADS jumps into U.S. tanker fray,” Reuters.com, April 20, 2010.
41 Ibid.
42 Scott Fontaine, “Senators blast Donley, Schwartz on KC-X process,” Air Force Times, May 12, 2010.
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The Antonov/U.S. Aerospace team requested a similar delay to allow revision of their offering,
which DOD denied.43
Legislative Activity for FY2011
FY2011 Funding Request
The Administration’s proposed FY2011 defense budget requested $863.9 million in Air Force
research and development funding to begin the KC-X acquisition.44
FY2011 Defense Authorization Bill (H.R. 5136/S. 3454)
House
The House Armed Services Committee, in its report on H.R. 2647,45 recommends approving the
Administration’s request for $863.9 million in research and development funding for the KC-X
program.
In markup, the committee approved an amendment “which would require the Defense
Department to take into account subsidies ruled illegal by the World Trade Organization.”46 The
text is included as Section 824 of the bill, and states:
SECTION 824—INTERIM REPORT ON REVIEW OF IMPACT OF COVERED
SUBSIDIES ON ACQUISITION OF KC-45 AIRCRAFT
(a) Interim Report- The Secretary of Defense shall submit to the congressional defense
committees an interim report on any review of a covered subsidy initiated pursuant to
subsection (a) of section 886 of the Duncan Hunter National Defense Authorization Act for
Fiscal Year 2009 (P.L. 110-417; 122 Stat. 4561) not later than 60 days after the date of the
initiation of the review.
(b) Report Contents- The report required by subsection (a) shall contain detailed findings
relating to the impact of the covered subsidy that led to the initiation of the review on the
source selection process for the KC-45 Aerial Refueling Aircraft Program or any successor
to such program and whether the covered subsidy would provide an unfair competitive
advantage to any bidder in the source selection process.
During its subsequent consideration of the bill, the full House voted to accept an amendment
offered by Representative Inslee that

43 John T. Bennett, “ Sources: U.S. Aerospace-Antonov To Bid Only One Tanker; DoD Rejects Plea For More Time,”
DefenseNews.com, July 9, 2010.
44 The requested funding is found in the Air Force’s research development, test and evaluation (RDT&E) account in
program element (PE) 0605221F, KC-X, Next Generation Aerial Refueling Aircraft.
45 U.S. Congress, House Committee on Armed Services, 111th Cong., 2nd sess., May 21, 2010, H.Rept. 111-491.
46 Jen DiMascio, “House Committee Passes Defense Bill,” Politico.com, May 20, 2010.
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would require the Defense Department to consider any “unfair competitive advantage that an
offeror may possess” in evaluating bids on major weapons systems.
The term “unfair competitive advantage” means a situation in which the cost of
development, production, or manufacturing is not fully borne by the offeror for the contract,
the amendment to a defense spending bill said.47
In effect, the Inslee amendment generalized the bill’s reporting language to apply to any bidder.
Senate
Senate action is pending.

47 Jim Wolf, “House Votes Pro-Boeing In Tanker Contest,” Reuters.com, May 28, 2010.
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Appendix A. Legislative Activity for FY2010
FY2010 Funding Request
The Administration’s proposed FY2010 defense budget requested $439.6 million in Air Force
research and development funding to begin a new program for acquiring new 179 KC-X aerial
refueling tankers. The requested funding is found in the Air Force’s research development, test
and evaluation (RDT&E) account in program element 0605221F, KC-X, Next Generation Aerial
Refueling Aircraft.
FY2010 Defense Authorization Bill (H.R. 2647/S. 1390)
Conference
The conference report (H.Rept. 111-288 of October 7, 2009) on H.R. 2647 authorizes the
Administration’s request for $439.6 million in Air Force research and development funding for
the KC-X program. (Page 1017)
Section 1081 of H.R. 2647 amends Section 1081(a) of the FY2008 defense authorization act
(H.R. 4986/P.L. 110-181 of January 28, 2008) to require the Secretary of the Air Force to conduct
a pilot program to assess the feasibility and advisability of using commercial fee-for-service air
refueling tanker aircraft for Air Force operations, unless the Secretary of Defense submits a
notification that pursuing such a program is not in the national interest.
Section 1082 provides authority to the Secretary of the Air Force to use multiyear contracts to
conduct the pilot program described in Section 1081 of the FY2008 defense authorization act.
Section 1052 requires Secretary of Defense to submit to the congressional defense committees a
report on the force structure findings of the 2009 Quadrennial Defense Review (QDR). The
House report on H.R. 2647 (H.Rept. 111-166 of June 18, 2009—see discussion above) includes
report language stating that this report is to include, among other things, “a description of the
factors that informed decisions regarding aerial refueling aircraft force structure.”
Section 1081 states:
SEC. 1081. MODIFICATION OF PILOT PROGRAM ON COMMERCIAL FEEFOR-
SERVICE AIR REFUELING SUPPORT FOR THE AIR FORCE.
Section 1081(a) of the National Defense Authorization Act for Fiscal Year 2008 (Public Law
110–181; 122 Stat. 335; 10 U.S.C. 2461 note) is amended by inserting before the period at
the end of the first sentence the following: “, unless the Secretary of Defense submits
notification to the congressional defense committees that pursuing such a program is not in
the national interest”.48

48 The first sentence of Section 1081(a) of the FY2008 defense authorization act (H.R. 4986/P.L. 110-181 of January
28, 2008) states: “The Secretary of the Air Force shall conduct, as soon as practicable after the date of the enactment of
this Act, a pilot program to assess the feasibility and advisability of utilizing commercial fee-for-service air refueling
(continued...)
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Section 1082 states:
SEC. 1082. MULTIYEAR CONTRACTS UNDER PILOT PROGRAM ON
COMMERCIAL FEE-FOR-SERVICE AIR REFUELING SUPPORT FOR THE AIR
FORCE.
(a) MULTIYEAR CONTRACTS AUTHORIZED.—The Secretary of the Air Force may
enter into one or more multiyear contracts, beginning with the fiscal year 2011 program year,
for purposes of conducting the pilot program on utilizing commercial fee-for-service air
refueling tanker aircraft for Air Force operations required by section 1081 of the National
Defense Authorization Act for Fiscal Year 2008 (Public Law 110–181; 122 Stat. 335).
(b) COMPLIANCE WITH LAW APPLICABLE TO MULTIYEAR CONTRACTS.—
Any contract entered into under subsection (a) shall be entered into in accordance with the
provisions of section 2306c of title 10, United States Code, except that—
(1) the term of the contract may not be more than 8 years; and
(2) notwithstanding section 2306c(b) of such title, the authority under secti+on 2306c(a) of
such title shall apply to the fee-for-service air refueling pilot program.
(c) COMPLIANCE WITH LAW APPLICABLE TO SERVICE CONTRACTS.—A contract
entered into under subsection (a) shall be entered into in accordance with the provisions of
section 2401 of title 10, United States Code, except that—
(1) the Secretary shall not be required to certify to the congressional defense committees that
the contract is the most cost-effective means of obtaining commercial fee-for-service air
refueling tanker aircraft for Air Force operations; and
(2) the Secretary shall not be required to certify to the congressional defense committees that
there is no alternative for meeting urgent operational requirements other than making the
contract.
(d) LIMITATION ON AMOUNT.—The amount of a contract under subsection (a) may not
exceed $999,999,999.
(e) PROVISION OF GOVERNMENT INSURANCE.—A commercial air operator
contracting with the Department of Defense under the pilot program referred to in subsection
(a) shall be eligible to receive Government-provided insurance pursuant to chapter 443 of
title 49, United States Code, if commercial insurance is unavailable on reasonable terms and
conditions.
House
The House Armed Services Committee, in its report (H.Rept. 111-166 of June 18, 2009) on H.R.
2647, recommends approving the Administration’s request for $439.6 million in research and
development funding for the KC-X program. (Page 190, line 88) The committee’s report states:

(...continued)
tanker aircraft for Air Force operations.”
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KC–X
The committee notes that the KC–X program is planned to replace the Department of the Air
Force’s KC–135 aerial refueling tanker fleet, which now has an average aircraft age of 47
years. The committee also notes that the KC–X program has been subject to delays resulting
from contractor protests to the Government Accountability Office, and believes that further
delay in the acquisition of the KC–X aerial refueling tanker could jeopardize Department of
Defense requirements for global mobility. Accordingly, the committee strongly urges the
Department to include the necessary funds in its Future Years Defense Program to rapidly
conduct source selection and to award a KC–X aerial refueling tanker contract as
expeditiously as possible. (Pages 100-101)
The report also states:
KC–X tanker replacement program
The committee believes that the Department of Defense should implement measures to
ensure competition throughout the lifecycle of the KC–X tanker replacement program to
ensure that the program delivers the best capability to the warfighter and the best value to the
U.S. Government. Accordingly, the committee urges the Secretary of Defense to utilize as
many of the competitive measures specified in subsection (b) of section 202 of the Weapon
Systems Acquisition Reform Act of 2009 (Public Law 111–23) as is practicable when
developing the acquisition strategy and source selection plan. The committee notes that the
intent of section 202 is to require the Secretary of Defense to plan for persistent competition
to control program costs and improve the reliability of the KC–X tanker acquired by the
Department throughout the program’s lifecycle, including development, procurement, and
sustainment. (Page 203)
Section 1032 of H.R. 2647 requires Secretary of Defense to submit to the congressional defense
committees a report on the force structure findings of the 2009 Quadrennial Defense Review
(QDR). Regarding Section 1032, the committee’s report states:
The committee expects that the analyses submitted will include details on all elements of the
force structure discussed in the QDR report, and particularly the following:...
(3) A description of the factors that informed decisions regarding aerial refueling aircraft
force structure, including: the modeling, simulations, and analyses used to determine the
number and type of aerial refueling aircraft necessary to meet the national defense strategy;
the force sizing constructs used including peak demand; the number and type of aerial
refueling aircraft necessary to meet the national security objective; the changes made, and
supporting rationale for the changes made, to the aerial refueling aircraft force structure from
that proposed in MCS–05; and the operational risks associated with the planned aerial
refueling aircraft fleet, based on requirements of combatant commanders, and measures
planned to address those risks;... (Page 388)
Section 1044 of H.R. 2647 would repeal Section 1081 of the FY2008 defense authorization act
(H.R. 4986/P.L. 110-181 of January 28, 2008), which directed the Secretary of the Air Force to
conduct a pilot program of at least five years’ duration to assess the feasibility and advisability of
utilizing commercial fee-for-service air refueling tanker aircraft for Air Force operations.
Regarding Section 1044, the committee’s report states:
The committee is aware that the Air Force has conducted initial analysis to develop the
program structure for the pilot program, based on two diverse options, and has received
feedback from potential providers in the aviation industry. However, based on its review of
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data gathered to date, the committee is concerned that the pilot program will be a costly
alternative with little operational benefit and is not in the best interest of the Air Force. (Page
391)
The committee’s report also states:
Fee for Service Refueling
The budget request contained $10.0 million for a fee-for-service refueling pilot program. The
committee recommends eliminating the funds for the pilot program.
A provision is included elsewhere in this title [Section 1044] that would repeal the
requirement to conduct a fee-for-service pilot program. (Page 284; see also page 282 for the
recommended line-item reduction)
Senate
Division D of S. 1390 as reported by the Senate Armed Services Committee (S.Rept. 111-35 of
July 2, 2009) presents the detailed line-item funding tables that in previous years have been
included in the Senate Armed Services Committee’s report on the defense authorization bill.
Division D recommends approving the Administration’s request for $439.6 million in research
and development funding for the KC-X program. (Page 687 of the printed bill, line 88) The
committee’s report states:
KC–X tanker replacement program
The committee regards the need to modernize the current fleet of KC–135 aerial refueling
tanker aircraft as a vital national security priority and supports the KC-X tanker
recapitalization program, as well as efforts by the Air Force both to maintain the existing
fleet and augment capability with aerial fee-for-service, if it proves cost-effective under the
pending pilot program. Given the troubled history of the program, the committee expects that
the Department of Defense will pursue a process of procuring replacement tankers that will
ensure that the joint warfighter receives the best capability at the best price. The committee
believes that this can only be achieved by an acquisition strategy that does not pre-determine
the outcome of the competition and a competition that is fair and open. In addition, the
committee believes that, in accordance with the principles of the Weapon Systems
Acquisition Reform Act of 2009 (Public Law 111–23) and as a means of improving
contractor performance, the Department of Defense must ensure that the acquisition strategy
of the KC–X program includes measures that ensure competition, or the option of
competition, throughout the life cycle of the program, where appropriate and cost-effective.
(Page 99)
Section 1058 of S. 1390 would amend Section 1081 of the FY2008 defense authorization act
(H.R. 4986/P.L. 110-181 of January 28, 2008), which directed the Secretary of the Air Force to
conduct a pilot program of at least five years’ duration to assess the feasibility and advisability of
utilizing commercial fee-for-service air refueling tanker aircraft for Air Force operations. The
committee’s report states:
The committee recommends a provision [Section 1058] that would provide an exemption to
the 5–year limitation on multiyear contracts and make other minor changes to enable the Air
Force to implement a fee-for-service air refueling support pilot program.
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Section 1081 of the National Defense Authorization Act for Fiscal Year 2008 (Public Law
110–181) directed the Secretary of the Air Force to conduct a pilot program to assess the
feasibility and advisability of utilizing commercial fee-for-service air refueling tanker
aircraft for Air Force operations.
The Air Force has been working with the private sector to implement this pilot program. The
Air Force has informed the committee that results from their formal request for information
process indicate that a multiyear contract that exceeds the current 5-year limit would be
necessary to promote adequate competition and reduce program costs. The Air Force needs
to have authority to make commitments for the 8-year pilot program in order to issue a
request for proposal. The Air Force also needs to be able to offer carriers insurance coverage
similar to that provided to civil reserve air fleet (CRAF) program partners. This provision
would provide the Air Force with those authorities. (Page 179)
The text of Section 1058 is as follows:
SEC. 1058. MULTIYEAR CONTRACTS UNDER PILOT PROGRAM ON
COMMERCIAL FEE-FOR-SERVICE AIR REFUELING SUPPORT FOR THE AIR
FORCE.
(a) Multiyear Contracts Authorized- The Secretary of the Air Force may enter into one or
more multiyear contracts, beginning with the fiscal year 2011 program year, for purposes of
conducting the pilot program on utilizing commercial fee-for-service air refueling tanker
aircraft for Air Force operations required by section 1081 of the National Defense
Authorization Act for Fiscal Year 2008 (P.L. 110-181; 122 Stat. 335).
(b) Compliance With Law Applicable to Multiyear Contracts- Any contract entered into
under subsection (a) shall be entered into in accordance with the provisions of section 2306c
of title 10, United States Code, except that—
(1) the term of the contract may not be more than 8 years;
(2) notwithstanding subsection 2306c(b) of title 10, United States Code, the authority under
subsection 2306c(a) of title 10, United States Code, shall apply to the fee-for-service air
refueling pilot program;
(3) the contract may contain a clause setting forth a cancellation ceiling in excess of
$100,000,000; and
(4) the contract may provide for an unfunded contingent liability in excess of $20,000,000.
(c) Compliance With Law Applicable to Service Contracts- A contract entered into under
subsection (a) shall be entered into in accordance with the provisions of section 2401 of title
10, United States Code, except that—
(1) the Secretary shall not be required to certify to the congressional defense committees that
the contract is the most cost-effective means of obtaining commercial fee-for-service air
refueling tanker aircraft for Air Force operations; and
(2) the Secretary shall not be required to certify to the congressional defense committees that
there is no alternative for meeting urgent operational requirements other than making the
contract.
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(d) Limitation on Amount- The amount of a contract under subsection (a) may not exceed
$999,999,999.
(e) Provision of Government Insurance- A commercial air operator contracting with the
Department of Defense under the pilot program referred to in subsection (a) shall be eligible
to receive government provided insurance pursuant to chapter 443 of title 49, United States
Code, if commercial insurance is unavailable on reasonable terms and conditions.
FY2010 DOD Appropriations Bill (H.R. 3326)
Final Version
In lieu of a conference report, the House Appropriations Committee on December 15, 2009,
released an explanatory statement on a final version of H.R. 3326. This version was passed by the
House on December 16, 2009, and by the Senate on December 19, 2009, and signed into law on
December 19, 2009, as P.L. 111-118. The explanatory statement states that it “is an explanation of
the effects of Division A [of H.R. 3326], which makes appropriations for the Department of
Defense for fiscal year 2010. As provided in Section 8124 of the consolidated bill, this
explanatory statement shall have the same effect with respect to the allocation of funds and the
implementation of this as if it were a joint explanatory statement of a committee of the
conference.”
The explanatory statement provided $15.0 million in Air Force research and development “for
program management” of a “next generation air refueling aircraft,” reduced from an
Administration request for 439.6 million; $30.0 million of the reduction was attributed to savings
due to a delay in awarding the tanker contract. Another $394.6 million was transferred to Title
VIII, the General Provisions section of the bill. Of that transferred money, $291.7 million was
made available for a Tanker Replacement Transfer Fund.
Section 8119 of H.R. 3326 explains the Tanker Replacement Transfer Fund thusly:
In addition to funds made available elsewhere in this Act, there is hereby appropriated
$291,715,000, to remain available until transferred: Provided, That these funds are
appropriated to the `Tanker Replacement Transfer Fund’ (referred to as `the Fund’ elsewhere
in this section): Provided further, That the Secretary of the Air Force may transfer amounts
in the Fund to `Operation and Maintenance, Air Force’, `Aircraft Procurement, Air Force’,
and `Research, Development, Test and Evaluation, Air Force’, only for the purposes of
proceeding with a tanker acquisition program: Provided further, That funds transferred shall
be merged with and be available for the same purposes and for the same time period as the
appropriations or fund to which transferred: Provided further, That this transfer authority is
in addition to any other transfer authority available to the Department of Defense: Provided
further
, That the Secretary of the Air Force shall, not fewer than 15 days prior to making
transfers using funds provided in this section, notify the congressional defense committees in
writing of the details of any such transfer: Provided further, That the Secretary shall submit a
report no later than 30 days after the end of each fiscal quarter to the congressional defense
committees summarizing the details of the transfer of funds from this appropriation.
The explanatory statement also includes this provision:
AERIAL REFUELING TANKER PROGRAM
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The recommendation includes $15,000,000 in Research, Development, Test and Evaluation,
Air Force for program management and a general provision providing $291,715,000 in a
Tanker Replacement Transfer Fund.
Not later than 10 days after the release of the final request for proposal soliciting bids for an
aerial tanker replacement aircraft, the Secretary of the Air Force is directed to submit a report
to the congressional defense committees that includes a description of changes from the draft
proposal to the final request for proposal and the rationale for each change.
The Secretary of the Air Force is encouraged to pursue tanker recapitalization at a rate of36
aircraft per year instead of 12 or 15 aircraft in the current plan. This quantity will recapitalize
the fleet in one-third the time and allow for a rapid retirement of the aging KC-135 aircraft.
Furthermore, a more accelerated procurement strategy will avoid the large sustainment and
modernization costs associated with keeping the legacy KC-135 fleet in the inventory longer.
House
The House Appropriations Committee, in its report (H.Rept. 111-230 of July 24, 2009) on H.R.
3326, recommends $439.6 million in research and development funding for the KC-X program,
as requested by the Administration, but transfers this funding from the Air Force’s research and
development account to a “Tanker Replacement Transfer Fund” established by Section 8112 of
the bill as reported. (See also page 273, line 88.) The text of Section 8112 is as follows:
Sec. 8112. (a) In addition to funds made available elsewhere in this Act, there is hereby
appropriated $439,615,000 to remain available until transferred: Provided, That these funds
are appropriated to the `Tanker Replacement Transfer Fund’ (referred to as `the Fund’
elsewhere in this section): Provided further, That the Secretary of the Air Force may transfer
amounts in the Fund to `Operation and Maintenance, Air Force’, `Aircraft Procurement, Air
Force’, and `Research, Development, Test and Evaluation, Air Force’, only for the purposes
of proceeding with a tanker acquisition program: Provided further, That funds transferred
shall be merged with and be available for the same purposes and for the same time period as
the appropriations or fund to which transferred: Provided further, That this transfer authority
is in addition to any other transfer authority available to the Department of Defense:
Provided further, That the Secretary of the Air Force shall, not fewer than 15 days prior to
making transfers using funds provided in this section, notify the congressional defense
committees in writing of the details of any such transfer: Provided further, That the Secretary
shall submit a report no later than 30 days after the end of each fiscal quarter to the
congressional defense committees summarizing the details of the transfer of funds from this
appropriation.
(b) The Secretary of Defense is directed to award one or more contracts for the aerial
refueling tanker replacement program according to either of the following alternatives:
(1) A contract to a single offeror based on a best value or lowest cost source selection
derived from full and open competition, subject to the condition that non-development
aircraft produced under such contract must be finally assembled in the United States. Such
competition and source selection shall include evaluation of the life-cycle costs of each
aircraft over a 40-year period (including costs of fuel consumption, military construction and
other factors normally associated with operation and support of tanker aircraft) and shall
include an independent 40-year life-cycle cost estimate conducted by a federally funded
research and development center.
(2) Contracts awarded to each of the two offerors that responded to Request for Proposal No.
FA8625-07-R-6470 (as released on January 29, 2007) subject to the condition that all non-
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development aircraft produced under any such contracts must be finally assembled in the
United States.
(c) The Secretary of Defense shall certify in writing to the congressional defense committees
by October 1, 2009, which of the procurement alternatives in subsection (b) represents the
most cost-effective and expeditious tanker replacement strategy that best responds to United
States national security requirements. The certification shall be accompanied by a report to
the congressional defense committees detailing the rationale for such certification.
The committee’s report states:
AERIAL REFUELING TANKER REPLACEMENT PROGRAM
The Committee firmly believes that the Department must act promptly to recapitalize the
aging Air Force aerial refueling fleet. The Department’s current program has been beset with
countless setbacks, from allegations of corruption to a protest of the previous source
selection decision. In the meantime, our nation’s aerial refueling tankers continue to age,
with the average age of a KC–135 being almost 50 years old today. The aerial refueling
replacement program (KC–X, KC–Y and KC–Z) plans to procure between 12 and 15 aircraft
per year to eventually replace the current fleet of 513 aircraft. This method of recapitalization
will take decades to complete, with the current fleet of Eisenhower-era tankers being 80
years old by the time the last legacy aircraft is retired. During this period, the Air Force will
invest billions of taxpayer dollars in maintenance of an ever aging and increasingly
unreliable fleet. Based on studies conducted by the Department of Defense, total fleet costs
are anticipated to increase from $2.1 billion per year to $3 billion per year by 2040 due to
increasing depot maintenance and forecasted modernization programs in avionics and
aircraft systems. Additionally, the Department anticipates depot maintenance costs
increasing from $320,000,000 to $1,100,000,000 in 2040 due to aging aircraft related
maintenance. Never in the history of our Nation has the military purposely planned to
maintain aircraft past 50 years, much less 80 years of operation so even these estimates may
understate the actual cost. In addition to the cost of maintaining the aging tanker fleet, the
cost per flying hour of a new tanker is almost half the cost of the existing fleet. The lower
cost per flying hour alone will save the taxpayer $1,795,500,000 per year for a fleet of 513
aircraft (current total aircraft inventory) or $3,500,000 per plane per year replaced.
To address these concerns, the Committee recommendation includes a general provision
providing $439,615,000 and the option for choosing one vendor or dual sourcing for the
aerial refueling Tanker replacement program. Along with this authority, the Committee
believes that it is in the best interest of the taxpayer to pursue recapitalization at a rate of 36
aircraft per year vice 12 or 15 aircraft. This quantity will allow for recapitalization in one-
third the time and thus allow for a rapid retirement of the current KC–135 aircraft. This plan
will result in avoiding a large sustainment and modernization cost of the legacy KC–135
fleet by allowing them to retire earlier than is currently programmed. Additionally, having
more than one aircraft provider will allow for competition to help control the procurement
cost, promote cost reduction measures, and allow for a faster aircraft replacement rate.
Further, the Committee directs the Secretary of Defense to, prior to the release of a draft or
final request for proposal soliciting bids for an aerial tanker replacement aircraft, submit a
report to the congressional defense committees that includes a description of key mission
requirement and performance parameters that will be used as the basis for determining the
key selection criteria in the source selection process; a full and complete characterization and
definition of ‘‘best value’’; a description of the process that the Department of Defense
intends to use to ensure open, balanced and trans parent communications with potential
offerors; and a full description of the corrections made to the source selection process that
addresses the issues raised by the Government Accountability Office in its ‘‘Statement
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Regarding the Bid Protest Decision Resolving the Aerial Refueling Tanker Protest by the
Boeing Company, B311344 et. al, June 18, 2008’’. (Pages 276-277)
The report also states:
A major imperative of the Committee’s funding recommendations is to improve the
efficiency with which Department of Defense resources are expended. The Committee
believes that one of the best ways to support United States forces is to improve the stability
of acquisition programs and increase quantities to field new equipment more rapidly. In
many cases, the procurement rates for new equipment are well below what could reasonably
be described as economic order quantities. The practice of stretching out procurement
schedules not only delays fielding modernized weapons but is costly as well. For example, in
the case of the aerial refueling tanker, annual maintenance costs are expected to climb by
$900,000,000, and Depot maintenance costs are expected to increase by $780,000,000. In
contrast, the lower cost per flying hour for a new fleet of tankers will save taxpayers
$3,500,000 per aircraft per year. The Committee also notes that the aerial refueling tankers
are a crucial piece of our nation’s ability to deploy and operate anywhere in the world. (Page
4)
The report also states:
FEE-FOR-SERVICE REFUELING
The Committee provides no funding for the fee-for-service refueling pilot program due to
concerns with the lack of a validated requirement for the program. The Air Force should
instead focus on the KC–135 tanker replacement program which is a Joint Requirements
Oversight Council validated requirement. The Committee recommends $439,615,000 in title
VIII of this Act only for the recapitalization of the aging KC–135 fleet with a competitive
procurement of a commercial derivative tanker aircraft. (Page 91)
Senate
The Senate Appropriations Committee, in its report (S.Rept. 111-74 of September 10, 2009) on
H.R. 3326, recommends $409.6 million in research and development funding for the KC-X
program—a $30 million reduction from the Administration’s request, with the reduction being for
“Contract award delay.” The recommended funding is located in the Air Force’s research and
development account, as requested. (Page 197, line 88)
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Appendix B. KC-X Competition of 2007-2008
This appendix provides additional information and discussion on the KC-X competition of 2007-
2008.
Request for Proposal
In January 2007, the Air Force released its formal RFP for the KC-X acquisition program.
Assistant Secretary of the Air Force Sue Payton reportedly emphasized that the Air Force had
completed a rigorous review process for KC-X to ensure the RFP mirrors joint war-fighting
requirements.49 The RFP outlined nine primary key performance parameters:
• Air refueling capability
• Fuel offload and range at least as great as the KC-135
• Compliant Communication, Navigation, Surveillance/Air Traffic Management
(CNS/ATM) equipment
• Airlift capability
• Ability to take on fuel while airborne
• Sufficient force protection measures
• Ability to network into the information available in the battle space
• Survivability measures (defensive systems, Electro-Magnetic Pulse (EMP)
hardening, chemical/biological protection, etc.)
• Provisioning for a multi-point refueling system to support Navy and Allied
aircraft50
In November 2007, Ms. Payton explained the evaluation criteria that the Air Force used in
determining the KC-X competition. The KC-X evaluation factors are:
• Factor 1—Mission Capability. Mission capability includes five subfactors listed
in descending order of importance:
• Subfactor 1.1—Key System Requirements
• Subfactor 1.2—Subsystem Integration and Software
• Subfactor 1.3—Product Support
• Subfactor 1.4—Program Management
• Subfactor 1.5—Technology Maturity and Demonstration
• Factor 2—Proposal Risk

49 “Air Force Posts KC-X Request for Proposals,” Air Force Print News Today, Press Release 070107, January 30,
2007, online at http://www.af.mil/pressreleases/story_print.asp?id=123039273.
50 Ibid.
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• Factor 3—Past Performance
• Factor 4—Cost/Price
• Factor 5—Integrated Fleet Air Refueling Assessment51
The Air Force considered the first three KC-X evaluation factors of equal importance. The final
two factors were considered of equal importance, but less important relative to the first three
criterion. Lastly, the Air Force regarded “Factors 1, 2, 3, and 5, when combined, [to be]
significantly more important than factor 4.”52
Boeing Protest
Air Force officials debriefed both Boeing and Northrop officials on how their respective bids
were scored in March 2008. On March 11, 2008, Boeing protested the Air Force’s decision to the
GAO.53 On March 26, 2008, both the Air Force and Northrop separately filed motions for the
GAO to dismiss portions of Boeing’s protest.54 GAO rejected these motions.55 Work on the KC-
45A stopped while the GAO considered the protest.56
Boeing’s protest was based on a perception that the Air Force used a flawed process in the KC-X
selection process. For example, in a press release detailing Boeing’s rationale for protesting,
Boeing stated:
It is clear that frequent and often unstated changes during the course of the competition—
including manipulation of evaluation criteria and application of unstated and unsupported
priorities among the key system requirements—resulted in selection of an aircraft that was
radically different from that sought by the Air Force.57
Boeing stated that both teams received identical ratings across the five evaluation areas in the
KC-X competition. Boeing claimed that the Air Force’s treatment of both Boeing’s cost estimates
and Boeing’s past experience of building Air Force tankers, if scored differently, could have
affected the outcome of the source selection.58 In response to Boeing’s protest, an Air Force press
release stated:
Proposals from both offerors were evaluated thoroughly in accordance with the criteria set
forth in the Request for Proposals. The proposal from the winning offeror is the one Air
Force officials believe will provide the best value to the American taxpayer and to the

51 USAF slide obtained from “Performance Comes First,” Air Force Association Daily Report, November 21, 2007,
online at http://dailyreport.afa.org/AFA/Reports/2007/Month11/Day21/1028factors.htm.
52 Ibid.
53 Boeing News Release, “Boeing Protests U.S. Air Force Tanker Contract Award,” March 11, 2008, online at
http://www.boeing.com/ids/globaltanker/news/2008/q1/080311b_nr.html.
54 Andrea Shalal-Esa, “Air Force, Northrop Ask GAO to Dismiss Boeing Protest,” Reuters, March 26, 2008.
55 Susanna Ray and Edmond Lococo, “Northrop Loses Effort to Dismiss Boeing Protest,” Bloomberg News, April 2,
2008, online at http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a2hruo2xpyFQ.
56 Sean Reily, “Air Force Keeps Tanker Freeze,” Mobile Press-Register, March 18, 2008, online at http://www.al.com/
press-register/stories/index.ssf?/base/news/120583171412090. xml&coll=3.
57 Boeing Company News Release, “Boeing Protests U.S. Air Force Tanker Contract Award,” March 11, 2008, online
at http://www.boeing.com/news/releases/2008/q1/ 080311b_nr.html.
58 Ibid.
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warfighter. Air Force members followed a carefully structured process, designed to provide
transparency, maintain integrity and promote fair competition. Air Force members and the
offerors had hundreds of formal exchanges regarding the proposals throughout the evaluation
process. Air Force officials provided all offerors with continuous feedback through
discussions on the strengths and weaknesses of their proposals. Several independent reviews
assessed the process as sound and thorough.59
GAO Ruling on Protest
On June 18, 2008, the GAO announced that it had completed its examination of DOD’s decision
to award Northrop the KC-X contract (for 80 aircraft) and found that Boeing’s complaint had
merit.60 GAO’s managing associate general counsel for procurement law, Michael R. Golden,
stated:
Our review of the record led us to conclude that the Air Force made a number of significant
errors that could have affected the outcome of what was a close competition between Boeing
and Northrop Grumman. We therefore sustain Boeing’s protest. We also denied a number of
Boeing’s challenges to the award to Northrop Grumman, because we found that the record
did not provide us with the basis to conclude that the agency had violated the legal
requirements with respect to those challenges.
GAO recommended that discussions between the government and the bidders be resumed, that
bidders be given the opportunity to submit revised proposals, and that the Air Force make a new
decision based on this additional input. The Air Force is not statutorily obliged to heed GAO’s
recommendations but must respond to them within 60 days (i.e., by August 17, 2008).61
GAO made clear that it was not passing judgment on the relative merits of the proposed aircraft.
Instead, GAO stated that it assessed whether the Air Force complied with statutory and regulatory
requirements in evaluating the competing bids. GAO cited seven specific reasons for sustaining
portions of the Boeing protest, which are summarized below:
1. The Air Force evaluation did not follow the prioritization of technical
requirements specified in its own solicitation. Nor did it give credit to the Boeing
proposal for satisfying the greater number of non-mandatory technical criteria,
though the solicitation expressly requested this.
2. The Air Force used the degree to which the Northrop Grumman bid exceeded a
specific key performance objective as an important discriminator between
proposals, despite the solicitation’s provision stating that this would not be the
case.
3. Solicitation required that proposed tankers be able to refuel all fixed-wing,
tanker-compatible Air Force aircraft using existing Air Force procedures. The

59 “Air Force Officials Respond to Boeing Protest,” Air Force Print News Today, March 12, 2008, online at
http://www.af.mil/news/story_print.asp?id=123089878.
60 GAO, “Statement Regarding the Bid Protest Decision Resolving the Aerial Refueling Tanker Protest By The Boeing
Company B-311344 et al.,” Government Accountability Office (Washington, D.C.), June 18, 2008. Available on the
World Wide Web at http://www.gao.gov/press/boeingstmt.pdf.
61 GAO also recommended that the Air Force consider amending its proposal solicitation before engaging the
companies in the discussions, that it reimburse Boeing for the cost of filing and pursuing the protest, and that it
terminate the existing contract with Northrop Grumman if Boeing’s proposal is ultimately selected.
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protest record did not support the Air Force’s determination that the Northrop
Grumman proposal did so.
4. Air Force discussions with each of the bidding companies were unequal and
misleading. Boeing was told that it had fully satisfied a key operational utility
parameter, yet the Air Force later determined that the Boeing proposal only
partially met the requirement. The Air Force continued its discussion with
Northrop Grumman on the same key parameter without informing Boeing that its
assessment had changed.
5. Northrop Grumman refused to agree to a specific solicitation requirement
regarding the development of Air Force maintenance capability within a specified
period. The Air Force unreasonably assessed this to be an “administrative
oversight” and awarded the contract improperly in light of this exception to a
material solicitation requirement.
6. The Air Force unreasonably evaluated the military construction (hangers,
runways, parking aprons, etc.) required to sustain each of the proposed aircraft.
During the protest proceedings, the Air Force conceded that calculations properly
performed would have resulted in a most probable life cycle cost for the Boeing
offer lower than that for the Northrop Grumman proposal.62
7. The Air Force improperly adjusted upward Boeing’s estimate of the non-
recurring (i.e., one-time) engineering portion of its most probable life cycle cost
value. The Air Force would have been able to do so had it found the cost to be
unreasonably low, but it did not. Additionally, the cost model used by the Air
Force to adjust this cost estimate was unreasonable.
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Appendix C. Boeing 767 and Airbus 330 Suppliers
Table C-1. Boeing 767 Suppliers
Supplier
Parent
Country
Component(s)
Aero Vodochody
Czech Republic
airframe parts (for BAE Systems)
Alenia Italy
wing control surfaces, flaps and leading-edge slats, wingtips,
elevators, fin rudder, nose radome
Avcorp Canada
front and rear spar stiffeners, floor grid details and assemblies,
aft strut fairings
Boeing Canada
Canada
fixed trailing edge panels, composite wing-to-body fairings,
engine strut fairings
Bombardier (Learjet)
Canada
wing trailing edge support structures
Bombardier (Canadair)
Canada
rear fuselage, pressure bulkhead
Daido Steel
Japan
steel sheets
Embraer Brazil
flap
supports
Fuji
Japan
wing fairings, main landing gear doors
Fujukawa Aluminum
Japan
forgings and extensions
GKN Aerospace
(Westland Aerospace,
formerly BP Chemicals;
United Kingdom
flap track fairings
with Lucas Aertspace
Cargo Systems)
Goodrich (Cleveland
United States
main landing gear
Pneumatic)
Hitco Carbon
United States
flap track fairings
Composites
IPTN
Indonesia
flaps, keel beams (for Mitsubishi)
Kaman Aerospace
United States
wing trailing edges
Kawasaki Heavy
Industries
Japan
center-fuselage body panels, exit hatches, wing in-spar ribs
Korean Aerospace
Republic of Korea
wing trailing edges
(Samsung)
LMI Aerospace
United States
skins, wing panels, floor beams, curtain tracks
Lunn Industries (Alcore)
United States
leading edge slat core assemblies (for ASTA)
Menasco Aerospace
United States
nose landing gear unit
Mitsubishi Heavy
Japan
rear fuselage body panels, stringers, passenger and cargo doors,
Industries
dorsal fin
Nihon Kokuki (Nippi)
Japan
wing in-spar ribs, various structural components for Mitsubishi
PPG Industries
United States
landing light lens assemblies, cockpit windows
Shin Meiwa
Japan
tailplane trailing edges (for Northrop Gumman/Vought)
Source: Teal Group.
Note: Commercial 767 variants are powered by engines manufactured by either General Electric, Pratt &
Whitney, or Rolls Royce.
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Table C-2. Airbus 330/350 Suppliers
Parent
Supplier
Domicile
Component(s)
Advanced Technology
and Research (ATR)
United States
graphite epoxy underwing fairings (for Aerostructures
Corp.
Corp.)
inner spoilers/airbrakes, center spar, upper wing skin panels,
Aerostructures Corp.
inner and outer wingbox leading edge assemblies (for BAE),
(Now Vought)
United States
outer flaps, flap track shrouds, spoiler parts (for DASA-
EADS)
AHF-Ducommun
United States
leading edge wing skins
Boeing (Aerospace
main gear doors, floor support structure, pressurization
Technologies of
United States
bulkhead between passenger cabin, main landing gear
Australia)
compartment (for Aérospatiale-EADS)
leading edge wing assemblies, nose gear bay and doors, nose
Bombardier (Canadair)
Canada
bottom fuselage, rear sealed frame, ventral beam,
pressurized lateral floor, aft pressure bulkhead (for
Aérospatiale-EADS), inboard front spar assembly (for BAE)
BTR Aerospace
Canada
main landing gear fairings
CC Industries
United States
outer rear spar, main landing gear support, ribs (for BAE)
Ciba-Geigy Corp.
Federal Republic of
Germany
HTA/6376 prepreg on wings
Dowty Aerospace
Canada
Canada
center landing gear
Dowty Rotol (with
Cleveland Pneumatic)
United Kingdom
design and manufacture of main landing gear
Fairchild Dornier
Federal Republic of
Germany
fuselage and wing components, interior panels
Fischer Advanced
Federal Republic of
Composite Components
Germany
interior components (for DASA-EADS)
GKN Aerospace
(formerly BP Advanced
United Kingdom
composite panels (for BAE)
Materials)
General Engineering
Unknown
side stay fairing
Hawker de Havilland,
Australia
Australia
wingtips, winglets, wing root fillet, ribs (for BAE)
Heath Techna
Aerospace
United States
composite components (for BAE)
IPTN
Indonesia
flap track carriages, sheet metal parts (for BAE)
Korean Aerospace
Industries (Daewoo)
Republic of Korea
wing components
Korean Air (with Silat)
Republic of Korea
upper fuselage panels of Section 15 (for Aérospatiale-EADS)
Marion Composites
United States
flap track fairings (for Aerostructures Corp.)
Marvin Group
United States
large ribs (for BAE)
Messier-Hispano-Bugatti
France
nose landing gear, wheels and brakes (option)
Mitsubishi Heavy
Japan cargo
doors
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Parent
Supplier
Domicile
Component(s)
Industries
PPG Industries
United States
cockpit windows
RTI International Metals
United States
titanium on A350
SABCA Belgium
tailcones
(for
DASA)
Shin Meiwa
Japan
wing fairings
Socea
France
rear upper panels of center fuselage section
SOCATA France
composite
belly
fairing
SONACA
Belgium
full-span leading edge slats, slat tracks
Xian Aircraft Co. (AVIC-
Peoples Republic of
1)
China
avionics access doors
Source: Teal Group.
Notes: The Airbus 350 is a planned model that will be similar in size to the Airbus 330. It was originally
expected to be a derivative of the Airbus 330, but is now expected to be a new design aircraft. Commercial
variants of both aircraft types are powered by engines manufactured by either General Electric, Pratt & Whitney,
or Rolls Royce.

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Appendix D. Potential Longevity of KC-135 Fleet
2004 DSB Report and 2006 RAND Analysis
A 2004 Defense Science Board (DSB) task force report examined, among other things, the
potential longevity of the KC-135 fleet.62 The 2006 RAND Analysis of Alternatives (AOA) on
aerial refueling also examined the technical condition of the KC-135 fleet.
The DSB report stated that airframe service life, corrosion, and maintenance costs factors would
potentially determine the KC-135s operational life expectancy. Each of these factors is discussed
briefly below.
Airframe Service Life
KC-135s, along with their associated B-52 bombers, were originally purchased to give the United
States a strategic nuclear strike capability. As a result, both fleets of airplanes spent a significant
amount of time during the Cold War on ground alert. Consequently, in 2004, the average KC-135
airframe had flown only about 17,000 hours of an estimated service life of 36,000 hours (KC-
135E) or 39,000 hours (KC-135R). On this basis, the DSB report concluded that KC-135
airframes were viable until 2040 at “current usage rates.”63 The 2006 RAND AOA similarly
concluded that the KC-135 fleet “can operate into the 2040s,” but not without risks.64
Corrosion
The 2004 DSB report concluded that corrosion did not pose an “imminent catastrophic threat to
the KC-135 fleet” and that the Air Force’s maintenance practices were postured “to deal with
corrosion and other aging problems,”65 but also stated:
However, because the KC-135s are true first generation turbojet aircraft designed only 50
years from the time man first began to fly, concerns regarding the ability to continue
operating these aircraft indefinitely are intuitively well founded.66
Maintenance Costs
A 2004 GAO report stated that KC-135 flying hour costs increased in real (i.e., inflation-adjusted)
terms by 29% between 1996 and 2002.67 The DSB report agreed that KC-135 maintenance costs
had increased significantly, but found that they had leveled off due to Air Force changes in KC-

62 Defense Science Board Task Force Report on Aerial Refueling Requirements, May 2004, p. iv.
63 Ibid.
64 Michael Kennedy et al., Analysis of Alternatives (AoA) for KC-135 Recapitalization, Executive Summary, RAND
Corporation, 2006, pp. 15-16.
65 Defense Science Board Task Force Report on Aerial Refueling Requirements, May 2004, p. iv.
66 Ibid., p. 17.
67 General Accounting Office, Military Aircraft[:] DOD needs to Determine Its Aerial Refueling Requirements, GAO-
04-439, June 2004, p. 13.
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135 depot processes. The DSB report forecasted modest growth in maintenance costs in the
future.68
Risks Of Flying Older Aircraft
Some observers express about potential problems that may arise in flying 50- to 80-year-old
tankers that could possibly ground the entire KC-135 fleet. The DSB report examined the issue
and concluded that “although grounding is possible, the task force assesses the probability as no
more likely than that of any other aircraft in the inventory of the Services.”69 The 2006 RAND
analysis expressed a belief that it is possible that KC-135s will be able to operate into the 2040s,
but the report expressed a lack of confidence that KC-135s could continue to be operated that
long without risks of major maintenance cost increases, poor fleet availability, or possible fleet-
wide grounding. The RAND analysis concluded that “the nation does not currently have
sufficient knowledge about the state of the KC-135 fleet to project its technical condition over the
next several decades with high confidence.”70 The analysis recommended more thorough
scientific and technical study of the KC-135 to provide a more reliable basis for future
assessments of the condition of the KC-135 fleet.71

Author Contact Information

Jeremiah Gertler

Specialist in Military Aviation
jgertler@crs.loc.gov, 7-5107

Acknowledgments
The current version of this report incorporates passages from the January 9, 2009, version, which was the
final version written by Christopher Bolkcom, CRS Specialist in National Security, who died on May 1,
2009. Substantial sections were updated by Ronald O’Rourke, CRS Specialist in Naval Affairs, prior to the
current author’s tenure.


68 Defense Science Board Task Force Report on Aerial Refueling Requirements, May 2004, pp. iv-v.
69 Ibid, p. 18.
70 Michael Kennedy et al., “Analysis of Alternatives (AoA) for KC-135 Recapitalization, Executive Summary,” RAND
Corporation, 2006, p. 16.
71 Ibid.
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