Newly released court documents reveal that the US Air Force acquisition community employed a bizarre defence strategy in a dispute about a contract for KC-135 tanker depot maintenance.
Challenged to explain why its evaluation of two competing bids failed to consider the effects of ageing aircraft issues on costs, the air force replied that its request for proposals "actually assumes a non-ageing fleet", according to a Court of Federal Claims decision released on 7 October.
Rejecting the air force's reasoning as "fatally flawed", Judge Charles Lettow ordered the air force to cancel the KC-135 contract awarded to Boeing and reopen the programme to competition.
Lettow's decision was made public in late September by Alabama Aircraft Industries, which had successfully appealed against the contract award. The decision document, however, remained sealed for one week until proprietary data could be redacted.
Details in the decision do nothing to soften the image of the air force acquisition community, which already faces severe criticism for its inability to defend contract awards for tankers and combat search and rescue helicopters.
The decision also forces the air force to reopen a heavily disputed contract for the KC-135 programmed depot maintenance work. Boeing won the contract in September 2007 partly by submitting a slightly lower-priced bid than Alabama Aircraft, formerly Pemco Aeroplex.
Alabama protested against that decision on several grounds, including that the USAF failed to assess the reasonableness of Boeing's last-minute price adjustment.
Most of Boeing's proposed savings came from reducing cost estimates in the late years of the programme. However, known effects of ageing aircraft, including metal corrosion, mean that labour and costs are likely to increase as more time passes.
The air force argued that ageing aircraft issues were not factored into the RFP and both bidders understood that "out-year work packages changes would be negotiated".
Lettow found both of the air force's arguments to be outrageous. "Rather than awarding a firm fixed price contract as envisioned, the air force's subsequent statements indicate that this 'fixed price' contract was subject to continued contractual renegotiations because of ageing aircraft and was at best a firm fixed price contract only for the first year," he wrote.
"Failing in the first instance to deal explicitly with the ageing fleet issue in the RFP, as amended, and then seeking to sidestep the ageing fleet issue in the price-realism analysis of Boeing's prevailing offer in this very close competition, renders the air force's award to Boeing unsustainable," he added.
Air force officials have 60 days to decide whether to request an appeal by the solicitor general. "The air force continues to assess the merits of the entire decision, to include the findings about price realism," the service says.
Source: Flight International
