Thursday, November 12, 2015

Long Range Strike Bomber (LRS-B) program halted.

The losers (Lockheed Martin and Boeing) filed a protest of the contract award to Northrup Grumman.  GAO ordered a stop work for 100 days while they sort thru the paperwork.  Take a 3 month schedule hit right there.  GAO might, after the 100 day hangup, approve the contract award or order the contract rebid, which will take a year. 
   The losers objections are unclear, and mostly unpublished.  What has come out is the Air Force looked at the bidder's re recurring engineering bids and using a lot of bad past experience doubled  all the bids.  Not a bad idea,  contractors typically bid low to get a foot in the door, thinking that they will be able to get their profit margins back up when the Government orders changes, which it always does.  But, what ought to happen when the contractor's underbid, is the government holds them to the original contract.  Fifty years ago, Lockheed under bid on the C-5 job.  USAF made them eat the difference between what Lockheed spent and what Lockheed bid. 
   Fifty years later, USAF lacks that kind of stones.  And, the last big program USAF put out for bid, the KC-46 tanker job, was a disaster.  Boeing protested the award to Airbus, got the contract rebid, and walked away with it.  And Boeing is doing cost overruns and schedule slippages right now. 
   It's hard to tell from where I live want the real story is.  Could be, GAO is allowing a frivolous protest to slow the program down.  Could be USAF did another KC-46 style bungle.  Could be Pentagon procurement regulations are so screwed up that nothing works.  Any way, the program is delayed by the bureaucrats, and delays always raise the cost to the taxpayer. 

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