“Aggressive but Responsible”

Boeing purposely proposed a ceiling price for developing the Air Force’s KC-X tanker that was less than the company’s actual projected cost. The company revealed this to the Air Force on April 25, USAF spokesman Lt. Col. Jack Miller told the Daily Report Monday. That was two months after Boeing beat out EADS North America for the rights to supply the new tanker; it offered a lower price. “There is no legal barrier that prohibits an offeror from pursuing a below-cost proposal strategy,” said Miller, noting that Boeing “adhered to” federal acquisition laws and “met all rules” laid out in the tanker solicitation. Boeing is now under a $4.9 billion fixed-price incentive firm contract to develop its KC-46A tanker and supply the first batch of them by 2017. The company is liable for all costs above the $4.9 billion ceiling, said Miller. Bloomberg reported that Boeing might exceed the ceiling price by $300 million, a figure Boeing did not publicly confirm, although it did acknowledge that it expects to surpass the ceiling at some point and absorb those costs. Boeing spokesman Bill Barksdale told the Daily Report that KC-46 development “is proceeding on cost and on schedule.” He characterized the company’s winning tanker bid as “aggressive but responsible.” Back in March, Ralph Crosby, EADS North America chairman, asserted that Boeing made “an extremely lowball offer” to win the KC-X contest.