By Steve Kelman

Blog archive

Air Force's retro acquisition strategy comes with a price

Well, the re-emergence of bid protests has now claimed its first big victim – competition on the huge contract to build a new generation of tankers for the Air Force, as Northrop Grumman announced yesterday that it would not submit a bid.

The never-ending saga of the tanker has generally shown the procurement system at its worst. It started with allegations of favoritism to Boeing that sent a senior Air Force procurement official to jail. The saga continued with congressional outbursts of xenophobia – inspired by Northrop's bid, which included an Airbus manufactured in Europe. In addition, members of Congress seemed more intersted in scoring jobs for their district than focusing on the program's mission. Finally, the story also featured the first bid protest, by the initial loser Boeing, of a major weapons platform contract in a long time.

To bring its misery to an end, the Defense Department (which basically took over the procurement from the Air Force) adopted a retrograde acquisition strategy that takes a number of minimum requirements, grades them pass-fail, and awards the contract to the low bidder who has met these minimums. If this were the approach the Air Force genuinely wanted – not to give extra credit for extra features, thus moving away from the idea of best-value procurement – that would be one thing, although one might question such a judgment. However, the acquisition strategy instead seems designed mainly to "protest-proof" the procurement. With no judgment being used, DOD believes it will be harder to overturn its decision.

However, the problem is that the underlying features of the Airbus that Northrop would have bid – as already adopted for some European militaries – give it more capability but a somewhat higher cost than what Boeing bid. Given the way the acquisition strategy was developed, Northrop basically had no chance to win. So they have now withdrawn from the competition.

The result? No competition for this contract, with the certainly of less-aggressive pricing by Boeing. Probably after award, the government will ask Boeing for features not included in the scaled-down minimum requirements package, in a sole-source environment that again doesn't promote great pricing.

Let's hear it for bid protests and a dysfunctional procurement system.

Posted on Mar 09, 2010 at 9:03 AM


Featured

  • Cybersecurity

    DHS floats 'collective defense' model for cybersecurity

    Homeland Security Secretary Kirstjen Nielsen wants her department to have a more direct role in defending the private sector and critical infrastructure entities from cyberthreats.

  • Defense
    Defense Secretary James Mattis testifies at an April 12 hearing of the House Armed Services Committee.

    Mattis: Cloud deal not tailored for Amazon

    On Capitol Hill, Defense Secretary Jim Mattis sought to quell "rumors" that the Pentagon's planned single-award cloud acquisition was designed with Amazon Web Services in mind.

  • Census
    shutterstock image

    2020 Census to include citizenship question

    The Department of Commerce is breaking with recent practice and restoring a question about respondent citizenship last used in 1950, despite being urged not to by former Census directors and outside experts.

Stay Connected

FCW Update

Sign up for our newsletter.

I agree to this site's Privacy Policy.