Oct 26 2009

SHELBY BLASTS TANKER DRAFT RFP IN LETTER TO GATES

U.S. Sen. Richard Shelby (R-Ala.), a senior member of the Senate Appropriations Subcommittee on Defense, today led members of the Alabama Congressional delegation in sending a letter to Secretary of Defense, Robert Gates, expressing serious concerns regarding the structure of the Air Force’s draft Request for Proposal (RFP) for the KC-X air refueling tanker acquisition.  Shelby will be joined by members of the Alabama delegation at a press conference tomorrow afternoon to discuss their concerns. 

“Despite assurances from the Department of Defense and the Air Force that this competition would be structured ‘down the middle,’ it clearly favors one competitor,” said Shelby.  “The draft RFP creates a cost shootout where the lowest priced bid wins, regardless of capabilities offered – capabilities that could save the lives of our warfighters.  Such a race to the bottom is unworthy of our men and women in uniform.  The draft RFP needs a serious rewrite to ensure that the taxpayer and the warfighter are equally protected.  We cannot have our military flying in paper airplanes simply because it’s cheaper.”

Information on the press conference, as well as the full text of the letter, are below. Information regarding a satellite feed and web posting of the press conference will follow in an advisory tomorrow.

WHO: Members of the Alabama Congressional delegation

WHAT: Press Conference on the Air Force’s air refueling tanker draft RFP

WHEN: Tuesday, October 27, 2009, at 2:00 p.m. EST

WHERE: Senate Radio and TV Gallery, 3rd floor, U.S. Capitol


TEXT OF LETTER

October 26, 2009

 

The Honorable Robert Gates
Secretary of Defense
1000 Defense Pentagon
Washington DC  20301-1000

Dear Secretary Gates:

In late September, Deputy Secretary of Defense Bill Lynn briefed us regarding the draft Request for Proposal (RFP) for the KC-X, the next-generation aerial refueling tanker that will replace the Air Force’s aging fleet of KC-135 Stratotankers.  At that time, we were invited to provide feedback regarding the draft RFP and offer the following comments and recommendations accordingly.   

Repeated delay of this program over the past decade has only increased the urgency of proceeding as quickly as possible with acquiring a new air-refueling fleet for the Air Force.  Since your decision to cancel the previous contract award post-GAO protest, testimony from numerous Combatant Commanders has validated the need to rapidly modernize the fleet with enhanced capabilities.  We are very troubled that the draft RFP fails to address this requirement. 

We note with alarm that the draft RFP also omits an assessment of risk associated with either schedule, past performance, or price, especially given that the quantity of mandatory threshold requirements has increased by a factor of ten over the previous competition.  It is unconscionable that the government would abandon its duty to assess risk on behalf of the taxpayers, particularly when cost and schedule realism proved to be significant discriminators during the last competition.  Consequently, it is imperative that the source selection process be modified to protect the government interests by assessing risk and ensuring that bidders cannot buy-in or promise a production schedule that is unrealistic. 

With regard to military capability, we are very concerned that the draft RFP explicitly marginalizes or eliminates 21st century performance that was highly valued during the previous competition, including capacity for airlift, passengers, and medical evacuation.  As a result, most of the RFP’s requirements could be met by the KC-135 designed over 50 years ago.  The draft RFP’s minimalist approach to military capability is inconsistent with statements of senior Air Force leaders, including Generals Schwartz, McNabb, and Lichte who have repeatedly stressed the importance of the KC-X as a ‘game changer’ for air mobility with its multi-role capabilities.  Since the draft RFP essentially asks for another KC-135, we can only conclude that the specified tanker configuration will not meet the future needs of operational tanker commands.  Future Congresses will be required to pay a premium to incorporate valued capability as upgrades once these new tankers are fielded.

In an era of acquisition streamlining and reform, we are very troubled that the draft RFP increases the number of mandatory threshold requirements from 37 to 373, and also fails to pursue a best value solution that allows for requirement tradeoffs based on importance.  This approach makes a mockery of the capability that our warfighters truly value by equating water flow in the toilet with fuel flow in the refueling boom.
  
From an acquisition policy perspective, the fact that the draft RFP locks-in schedule, price, and requirements for an 18-year period, a full 8 to 13 years longer than is current practice for major defense acquisition programs, creates an unworkable scenario.  This excessive contract duration is counter to the intent of the Acquisition Reform Act since it will either facilitate technology obsolescence or encourage requirements creep and contract changes.   An 18-year contract greatly exceeds the Department’s 5-year budgeting and planning process, unduly limiting Congressional oversight.  From a pricing standpoint, an 18-year fixed-price contract will force industry to fully price performance risk that may never materialize, increasing the overall price of these tankers for the taxpayer.  Indeed, the draft RFP’s fixed-price development approach will guarantee that the public pays more for this tanker selection than it would have for the winner in the last competition.

While we support the Department’s effort to quickly move forward with the tanker competition, this draft RFP is fundamentally flawed and does not achieve your stated objective of conducting a best value competition that is fair, open, and transparent.  It fails the test of rationality.

While this letter represents our formal comments on the RFP, we fully expect you to meet with us in person to further discuss our concerns at the earliest possible date.

Sincerely,


Cc: 

The Honorable Bill Lynn
The Honorable Ashton Carter
The Honorable Michael Donley
General Norton Schwartz
Mr. Shay Assad
Mr. Scott Correll