March 31, 2010
MR. MORRELL: Sorry to keep you waiting. Good evening. Thanks for coming at this late hour.
I have a short announcement on the KC-X competition.
As you know, late last month the department announced the final KC-X request for proposal, unveiled the Air Force requirements for the replacement tanker and set May 10th as the deadline for bids to be submitted. Deputy Secretary Bill Lynn made it clear then that we are committed to a fair, open and transparent competition in order to get the best airplane to our warfighters at the best value to the taxpayers.
Recently the European Aeronautic Defence and Space Company indicated a possible interest in competing and asked for some time -- some more time, that is -- to prepare a bid. This afternoon the Defense Department informed both EADS and Boeing that if we receive formal notification from EADS of their intention to make an offer, we will extend the deadline for bids from May the 10th to July 9th. That would provide both EADS and Boeing with another 60 days to submit their proposals. It is not uncommon to grant reasonable extensions in competitions of this sort, and we consider 60 days to be reasonable in this case.
Given that this plane is long overdue and we want -- and we do not want its delivery date to slip any later than it already has, we are prepared to compress our bid evaluation period to stay as close to the original award schedule as possible, so as to still award the contract early this fall.
No one should confuse our willingness to extend the bid deadline with willingness to change any of the plane's military requirements or the way bids will be evaluated.
Finally, there are those who have suggested that politics, both local and international, have somehow influenced this process. Nothing could be further from the truth. We have been and continue to make decisions on this critical program based solely on the law of the land and the needs of our warfighters. To that end, as the deputy secretary said last month, we will continue to play this straight down the middle.
Thanks for your time this evening. Appreciate it.
Q Question?
MR. MORRELL: I'll take one or two. What's up, Tony?
Q Sean O'Keefe met with you today -- the Pentagon. What are some of the reasons they needed the 60-day extension for? Was it to get a partner to review the briefing materials Northrop had access to? Just, can you give some clarity to that?
MR. MORRELL: I don't think it's appropriate for me to speak to the needs they expressed to us. You're certainly capable of calling up the company yourself and asking them if they wish to disclose that information. One of the reasons I'm not comfortable doing so is that many of the issues that were discussed involve proprietary information, so it would be inappropriate for me to discuss it from the podium, or anywhere else, for that matter.
Q Do you get a -- did you get an -- did you get an indication, though, that they are seriously interested in bidding this program or would bid if the extension was granted?
MR. MORRELL: I don't think we would be having the conversations that we have been having unless they were seriously considering a bid.
Yeah, Amy.
Q You said if you received formal notification. Do you know what the last -- the long pole in the tent is to get the formal notification?
MR. MORRELL: No, you'd have to ask them. I mean, they've made it clear, I think, in reading some of your press accounts of the current situation, that they intend to make this decision in the next couple of weeks. That seems like a reasonable period of time to us. And if we were to receive that formal notification, we would then go ahead and extend the deadline for bids by 60 days, as we discussed.
Yeah, Roxanna.
Q Did you get a sense from EADS, from your discussions, that 60 days would be enough for them to bid? I know they asked for 90 days, essentially, and you said 60 days is reasonable. Do you get the sense that it's somewhere in the middle and they would be able to compete?
MR. MORRELL: I think they are the best people to speak to that. I mean, obviously, they have asked for 90 days. We think that 60 days is a reasonable amount of time, given the needs that were expressed to us; balanced, also, against our desire to move on with this as quickly as possible and try to maintain as closely as we can the original award schedule. And as I mentioned, we are willing to compress our evaluation time so as to still award this contract in the early fall.
Yeah.
Q With the significance of this competition, you're – by compressing the time. How do you plan to do that? Do you plan to bring extra people in to read it?
And yesterday, General Schwartz said 60 days really -- or an extension of 60 up to 90 days -- really won't matter for IOC [initial operating capability]. Why compress it at all?
MR. MORRELL: We want to maintain the schedule as best we can. This program is long overdue. The replacement tanker is a critical need for our warfighters. And we believe that we can compress the evaluation period somewhat in order to maintain pretty closely to the original award schedule. And if we can do it, we want to do it, and so that's our intention.
Okay, last one. Jen.
Q To what extent is the -- you know, getting the award in by September, and before the November elections, important?
MR. MORRELL: Politics are not a part of this process -- never have been, never will be. As I mentioned in my opening statement, we are basing this strictly on the needs of the warfighter, the law of the land, and our desire to make sure the taxpayer gets their money's worth.
Thanks.
Q Geoff, this is --
MR. MORRELL: Thank you.
Q You said 90 earlier. Is there a reason why you went down to 60?
(No audible response.)
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