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

Jeremiah Gertler
Specialist in Military Aviation

On September 24, 2009, the Department of Defense (DOD) announced its proposed strategy for conducting a new competition between Boeing and a team consisting of Northrop Grumman and the European Aeronautic Defense and Space Company (EADS, the parent company of Airbus) for a program to build 179 new KC-X aerial refueling tankers for the Air Force. The estimated total value of the 179-aircraft KC-X program is roughly $35 billion. Boeing is expected to offer a KCX design based on either its 767 or 777 airliner (or it may offer two designs, one based on each airliner), while Northrop/EADS is expected to offer a KC-X design based on the Airbus A330 airliner. Boeing would build its KC-X in Seattle, WA, and Wichita, KS, while Northrop/EADS would build its KC-X in a plant that would be established in Mobile, AL. 

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 the Boeing and Northrop/EADS bids against those required capabilities? Should a September 4 World Trade Organization (WTO) preliminary 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 Northrop/EADS in a manner equivalent to how Northrop/EADS' pricing data for the 2007-2008 competition was shared with Boeing? Is DOD proposing to use appropriate contact types for the KC-X acquisition? Should the Air Force should be in charge of the new KC-X competition? Should DOD split the KC-X program between Boeing and Northrop/EADS? 

New issues emerged on December 1, 2009, when Northrop Grumman's Chief Executive Officer stated in a letter to DOD that were the draft Request for Proposals (RFP) not revised, Northrop Grumman would not enter a bid: Should DOD structure its RFP to ensure that at least two competitors will bid? If competition is deemed necessary, to what extent should requirements or budget be changed to enhance 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.


Date of Report: December 22, 2009
Number of Pages: 96
Order Number: RL34398
Price: $29.95

Document available electronically as a pdf file or in paper form.
To order, e-mail congress@pennyhill.com or call us at 301-253-0881.