Mr. President, you and the Congress have said unemployment is our number one priority. Well, let me tell you about an opportunity to prove that you mean it. The opportunity stems from a political maelstrom – the Air Force’s attempt to replace the KC-135 Eisenhower-era air refueling tanker.
Two great American companies are vying for the contract – Northrop Grumman and Boeing. The Pentagon appears to be stumbling again to construct a competition to decide if it will buy either Northrop Grumman’s KC-45 or Boeing’s KC-767. With the nation’s unemployment rate hovering at nearly 10 percent — and reaching as high as 17% in some states — there is only one smart option, as Governor Strickland of Ohio recommended to you in a letter on February 9, buy both. The fiscally responsible way to do that is with a dual, competitive award.
A dual competitive award operates differently. It awards the lion-share of the order to the company with the better value aircraft, while still giving work to the other company. Rather than the minimum 12-15 aircraft bought per year, the Air Force would field 36 a year as the late Congressman John Murtha suggested, much like we saw recently when United Airlines announced the procurement of both Boeing and Airbus aircraft, a practice not uncommon in the airline industry.
Fundamental to the competitive process is that every 3-5 years, there’s another contract award for the next batch of planes. In the process, both companies vie to keep costs down, capabilities up and honor their promises.
In this process, a dual procurement would put twice as many Americans to work – at least.
Both companies have stated they will employ between 48,000 and 50,000 Americans to build their version of the tanker. Buying both would allow up to 100,000 Americans to be employed in high paying aerospace jobs for 30 to 50 years.
These jobs will be in states that need help: Washington (12,700), California (11,500), Illinois (7,000), Kansas (6,600), Arizona (5,000), Alabama (5,000), Connecticut (4,000), Texas (3,000), Michigan (2,700), Florida (2,600), and Georgia (600) to list a few.
A dual procurement strategy will have a corollary positive effect on the nation’s industrial base – increasing the aerospace output up to 6% producing the tanker aircraft alone. Given that Airbus officials have stated that they will move production of the A330 freighter to the United States if the Air Force buys the KC-45, the actual increase could be closer to a 12-15% increase in aircraft production due to the tanker and freighter product. That translates to potentially 200,000 more jobs.
Creating new jobs is powerful logic alone – but there are other solid reasons.
Foremost among them is the value of competition. A dual, competitive award would ensure the every few years, the Air Force fields aircraft with the newest equipment. Experience has demonstrated that when aerospace companies engage in a continuous competition, they consistently strive to introduce the latest technology at lower cost to win. Warriors and taxpayers both win in this scenario.
In fact, a study by Jacques Gansler, the former DoD acquisition chief under President Clinton, documented that when airline companies buy aircraft through a continuous competition method, the price for the aircraft decreases 16% over time.
The cost savings that comes from competition leads to another compelling reason for dual procurement — saving scarce dollars.
Wouldn’t it be nice to have a Pentagon weapons program actually decrease in cost over time? Based on the lessons learned from the Gansler study, adopting a competitive, dual buy strategy could save the Pentagon $75 billion in then year dollars over the life of the program.
And, there are other savings too. Buying 36 aircraft a year as the late Congressman Murtha suggested allows the Air Force to retire the Eisenhower-era KC-135 faster – in 12 years instead of the current plan that requires 34 years which would provide an added $25 billion savings over the life of the program.
Fielding the more modern KC-45 and KC-767 immediately would allow the Air Force to save $20 billion in maintenance costs alone over the next two decades. This is because these aircraft cost two-thirds to fly per hour what the Air Force pays today for the KC-135. And the KC-135 costs are increasing.
As the KC-135 fleet is retired faster, the warfighter gains a multi-mission capability that is needed. General Duncan McNabb, the Commander of US Transportation Command, said recently that he needs the KC-135 replacement to carry passengers and cargo pallets – and transform tankers to mobility platforms. He needed them now to get the additional troops to Afghanistan and as well as improved air refueling capacity. This added capability is estimated to save $500M yearly in airlift costs!
The final reason we should adopt this plan – and this alone is reason enough – is that we owe it to the men and women in uniform to give them the tools they need sooner, rather than later. Many of us remember the event that energized the Air Force’s urgency to replace the KC-135: A mechanical bolt failed on a KC-135, causing it to crash and killing the aircrew.
Dual, competitive procurement gets our Airmen out of the ancient aircraft faster and deploys our troops into combat faster at less cost. For instance using the KC-45 instead of the current draft Request For Proposal will save 1285 sorties and cut 41 days off the deployment time of 9 combat brigades to Afghanistan from the U.S.. This is a dramatic change in combat capability, Mr. President.
If the dual procurement allows the Air Force to field more modern, safer aircraft faster – and it does – that should be reason enough. Add the safety of our airmen with creating 100,000 jobs, more responsive defense contractors, ensuring earlier operational capability and saving $100 billion in then year dollars over the next thirty years, dual procurement is the way to go, Mr. President.
Lt. Gen. McInerney is the former assistant Vice Chief of Staff, USAF. He is now a Fox News military analyst and defense consultant . One of his clients is Northrup Grumman.
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General McInerney is the founder of Government Reform Through Technology, a consulting firm that works with high-tech companies. GRTT conducts business with federal, state, city and local governments to help them introduce advanced technology into the public sector.