November 20, 2010 in Business

Air Force mixes up data on air tanker bids

Dominic Gates Seattle Times
 

SEATTLE – The Air Force has again stumbled in the lucrative but long-drawn-out competition for aerial refueling tankers, a contract for which Airbus and Boeing are contending.

The Air Force informed members of Congress on Friday that about two weeks ago it accidentally provided Boeing with detailed data on the Airbus bid and, vice versa, provided the corresponding Boeing data to Airbus.

The data includes crucial pricing information on each bid. Price is considered likely to be the key differentiator in the competition, and knowing the other side’s bid could allow either contender to adjust its own price accordingly.

But it’s unclear how damaging the glitch is at this stage of the competition and how the data disclosure might affect the outcome.

The bid information was provided to the two manufacturers on computer disks, and the Air Force doesn’t know for sure “whether either party has viewed the other party’s detailed data,” said John Diamond, a spokesman for Sen. Maria Cantwell, D-Wash., who was briefed Friday.

Diamond said that “both Airbus and Boeing claim that once they realized the error, they did not look at the detailed proprietary info they had been inadvertently given.”

The data switch happened after the Air Force took the detailed specifications of the contending jets and ran them through a software program that models how the aircraft will perform in a variety of real-world tanker missions.

The so-called Integrated Fleet Air Refueling Assessment model is used to evaluate how the jets perform and whether the pricing in the bid is realistic. Typically, following that modeling, the Air Force may tell the bidder that the price they have submitted needs to be adjusted up or down, Diamond said.

The tanker competition was originally expected to have been decided this month, but recent indications are that the award of the $40 billion contract will slip into next year.

It’s possible this inadvertent swap of proprietary information may further delay the result. It could also provide the losing bidder with grounds for an appeal.

The initial Air Force assessment is that this should not scotch the competition, since both bids are already in, Diamond said.

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