Why Boeing Lost

Tuesday, March 4, 2008

Defense consultant Loren B. Thompson of the Lexington Institute said yesterday that the following criteria were key reasons that Northrop Grumman and partner EADS beat Boeing for the contract to build tankers. Thompson said his analysis was based on information from Air Force and company officials; the Air Force did not comment.

Mission capability: The teams tied on most measures, but Air Force reviewers thought Northrop offered superior refueling and airlift capacity at certain ranges.

Proposal risk: The competitors matched in this area but only after Boeing agreed to lengthen its development schedule. The rescheduling added cost to the Boeing proposal.

Past performance: Northrop had higher ratings than Boeing on programs relevant to the tanker competition, and its subcontractors were more highly rated.

Cost: Boeing failed to adequately explain its cost projections.

Integrated assessment: When the planes were compared in a wartime scenario, it was determined that Northrop's proposal could accomplish certain missions with fewer planes than Boeing's.

SOURCE: Lexington Institute

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