Thursday, February 28, 2019
Factors Involved in the Tanker Contract Essay
Issues that relate to auspices be of key concern to entirely commonwealths (Meyer, 2007). The national credentials and internal defense ar somewhat of the sectors that are allocated lump sums of resources in the cypherary allocation (Meyer, 2007). Such allocations are in tenor with the perceived importance that the area of defense has. The united states as a estate is no stranger to conflict and is whizz of the country that has been regardd in external conflict for long finiss of time both(prenominal) in the 20th and 21st century (Meyer, 2007).The politics involved in the security are some of the well-nigh interesting and widely c everywhere contingencys in the US press. Financial power is seen to go in line with war machine power in that countries that throw the financial ability escape to commence their army capabilities and the same net be said of countries that concord armament abilities. National security is an area of key concern and so on that point is lots of secrecy involved in its disperseings (Meyer, 2007). The genius of the deals often require utmost confidentiality from the parties involved and in that locationfore many minutes happen in well defined and approved channels.The military railroad tie are developed with time and whitethorn be extended to standstill in opposite areas since its better to develop good relations with persons with security details that could be detrimental to the country if leaked (Meyer, 2007). The military world has been ontogenesis with technological improvements and the military equipments currently beingness apply are characterized by more than accuracy and considerable throughput (Verkuil, 2007). These two factors are but a few of the considerations in choosing a partner or a asserter that give help in developing certain aspects of the security schema (Verkuil, 2007).It indeed does not come as a surprise that military procurement procedures and growthes have considerable con tr oversy since hoi polloi have alter views on efficiency and security implications (Verkuil, 2007). This research paper analyses the issues involved in the airforce contract tender to build oilers in the midst of Boeing and Northrop Grumman with the aim of superiorlight key issues involved in addressing security critical details. Background Boeing KC-767 is genius of the military aerial refueling strategy that had been developed by Boeing 767-200 (CBS intelligence information, 2008).The tanker was castated KC-767 after it was selected by the US airforce to re tush the KC-135s. However, in declination of 2003, the contract was nipping after corruption allegation on the bid process were aheaded. The learning of the protrusion is said to have cost Boeing over $ 1 Billion as the project was based on the premiss that the US airforce bequeath be the chief consumer. Ever since the freeze of the project the Italian and the Chinese government have each order a procedure o f these tankers.To address the KC-X competition the Boeing offered the 7627-200 Long range fanny which is based on the KC-767 (Online word of honor minute, 2008). However, the Department of defense selected KC-30 which was developed by Northrop Grumman (CBS intelligence, 2008). The Boeing come with on the 11th March 2008 submitted a protest on the purposes make by the airforce, the United States accountability office upheld their protests and in so doing the status of the KC-45A was placed in doubt and therefore the Boeing attach to was once a improver in position to bid for the contract (CBS News, 2008).This was no to be since the US government in September 2008 terminated all bids on the KC-X (CBS News, 2008). In March 2002, the US airforce selected Boeings KC-767 on the grounds that it had all the way demonstrated the abilities to meet their requirements. The United States jobforce (air force) in their acceptance disceptation brought out(a) four signalises that they c ited as being behind their decision (CBS News, 2008). The Boeings design was designated KC-767A and was included in DODs 2004 model surname report. Approximately 100 KC-767 tankers were leased from Boeing for the air refueling program.Even though the refueling program was in place in many countries in the US, many had questions about its effectiveness and cost implications especially the motif of leasing crafts which may never have any buyer once the lease period was over. This melodic phrase brought forward by senator McCain was however countered by the number of US allies who were more than willing to buy their used crafts (CBS News, 2008). The copulationional budget office was next in line as they criticized the budget stressing on its fiscal irresponsibility (United States judicature answerability Office, 2008).This led to the striking of a deal where the state would buy 80 KC-767 and lease twenty (United States Government Accountability Office, 2008). However, in December of 2003, the pentagon pro outcryed that the project had to be frozen collect to a corruption allegation brought against one of its former staff member (CBS News, 2008). Furthermore, documentations that proved that the A330 based tankers were more suited to the task specifications of the airforce were more cost effective relative to Boeing tankers were order (CBS News, 2008).The scandal led to the sentencing of the culprit who pleaded guilty to corruptions and led to the resignation of Boeings CEO. Donald Rumsfeld in 2006 announced the cancellation of the KC-767A leases as a appraise aimed at cutting the costs and a redefinition of the USAF deputation (United States Government Accountability Office, 2008). The defense secretary further say that the move will not in any way affects the mission of the KC-767A as the upgrade of the KC-135s fleets will help in paltry towards the goals (United States Government Accountability Office, 2008).However, the development did no affect t he relationships between Boeing and its other customers. The development were however short lived and Boeing and Northrop were soon back in the isthmus fighting for a magnanimous defense contract. The buns of Boeings arguments was that the KC-30 was more versatile and had a prodigious furl capacitor than the KC-135 that were being used by the airforce. The KC-135 was developed by Boeing who were bidding for an airforce contract against their jinx Northrop Grumman .The latter win this round of battle as the departments of defense announced that it has won the tender to procure 179 new KC-45A tankers (Online News Hour, 2008). The Boeing company about immediately took to the Government Accountability Office and filed a protests claiming the evaluation of its KC-30 was raw (Online News Hour, 2008). Boeing further claimed that its refueling tanker could easily be reconverted to a passenger plane compared to Northrops version as shown in the Air forces post decision briefing.Acco rding to Boeings depravity president they had more strengths than their competitors was all he heard from the post decision briefing. Boeings protests led to a review of the selection process by the accountability office which forced Northrop to freeze the project which it had already allocated $ 35 one million million million (Online News Hour, 2008). Northrop Grumman executives are on the other hand spotlight the irresponsibility involved in freezing a critical project to the development of the military for expensive lobbying in the congress that will contains lead to a change of the decisions made by the airforce (Online News Hour, 2008).Northrop Grumman executives further claim the decision is ironic since they put their outdo efforts in ensuring that the airforce receives a products that they consider the best in consideration of the design (Online News Hour, 2008). They are pushing for the familiar knowledge of the facts of what they represents and what they are not. Th e congress was divided sharply on this issue and so was the general universal. Boeing supporters claim that the Northrop Grumman design was a basic passenger airbus plane (Online News Hour, 2008).A Kansas congress man was cited claiming that the decisions made by the airforce was a rugged one as the airforce as it has bend backwards to deal with a cut company (Online News Hour, 2008). Boeings die hards burn down its main production facility claimed that it is the wholly true tanker manufacturers and a mistake had been made (Online News Hour, 2008). A Washington senator supported this point of view and claimed that offering a military contract to a conflicting company was suicidal and would incapacitate Americas ability to develop their own fleet if they should ever pull out of the deal (Online News Hour, 2008).An Alabama state senators is of a different view and approached the subject from a resource allocations view point (Online News Hour, 2008). People near Northrop are bou nd to benefit more that those near the Boeing plants and therefore there senators have opinions that display their satisfaction or dissatisfaction with the resource allocations (Online News Hour, 2008). She further states that there have to be losers and winner either way (Online News Hour, 2008).The Boeing congregation further accuse the airforce of a change in debate in order to accommodate the design put up by Northrop Grumman so as to batten down two bidders are present (Online News Hour, 2008). Even though many are of the view that the airforce was hard to lock out Boeing overdue to the scandals it previously had, Boeing executives were of the view that was not the berth as the specifications that were asked by the airforce were changed considerably to ensure Northrop was in the look sharp (Online News Hour, 2008).They further claim that the large sized tanker proposed by the Northrop was a liability and only countries not interested in their literary hack ways would all ow for such(prenominal) aircrafts. The Northrop group however counter this argument by stating that their design is more sophisticated and has advantages that are yet to be seen (Online News Hour, 2008). Issues Boeing is one of the worlds best known manufactures of aircrafts and so is Northrop Grumman who are the manufacturers of the airbus (Online News Hour, 2008).These are two top brands who are evidently competing in other areas of business and therefore any decision that involve them is bound to raise considerable heat. It should b renowned that both are American companies though Northrop Grumman is partly owned by a French company. The nature of the contract which involves the security of America as a nation is a division of national concern as it involves the development of structures that could ensure the growth of security constitutions. Boeing and Grumman being business structures, such a gargantuan contract will obviously attract the interest of stakeholders from bot h sides. at that place are a number of key issues that have been brought out by the airforce contracts which include i. Politics Military contracts are a matter of public concern since it is in place to protect the public, the resources used in the military contracts are derived from taxpayers and therefore the failure of such projects will be a waste of taxpayers money (Meyer, 2007). When McCain questioned the cost effectiveness in leasing planes that would otherwise have no values when their lease period was over his spring as the senator of Alabama was to ensure that the taxpayers money is channeled to useful projects.Furthermore, it is quite wrap up that the politicians have the ability to shoot down potentially useful deals due to what Northrop Grumman executives refer to as expensive lobbying. Politics is not always quarry for there are situations where the stakes involved are shielded from the public and though the politics and viewpoints will be developed to suit the pub lic, the factual reasons are often personal (Meyer, 2007). The inclusion of politics in such baptistrys therefore has both advantages and disadvantages and should be weighed carefully.Military procurement just kindred any other public procurement scheme is prone to corruption, this was the case in the original contract that was brought to an end by Rumsfeld in 2006. Moreover, the big money involved in military procurement processes act as a natural catalysts for corruption, therefore there is need to come up with a robust self regulated systems that will ensure that such unethical practices are not in anyway included in the procurement process, the congress thus comes into the picture (Meyer, 2007).However, the governmental system is not known for its objectivity. In the cases, some of the reasons brought out against Northrop Grumman are flimsy and deficiency in objectivity. The fact that there will be lobbying is a micturate sign that there will be loss in objectivity thus t he decision will tend to favor groups that are be able to garner plenty political support in the congress. Furthermore, the political system is one of the most corrupt system there is and the precept in placing such a system to guard against corruption is questionable. ii. gage Military procurement is a security critical matter (Meyer, 2007). The military is in place to ensure that the US is protected against its external enemies (Meyer, 2007). The earnestness with which the equipment tendering process is treated and the keen eye that the media watches the unfolding of such events communicate the importance placed on the military by the American people. The US is traditionally a fighting nation and the effectiveness of its military and equipments is one of the factors that has cemented its place as a world power.Military activities require high levels of secrecy (Meyer, 2007). There is need to come up with effective equipments that can be used in varied situations. It should be n oted that the arguments brought forward by the executives from both sides are centered around the superiority of their products or the weaknesses of their opposite. The need for accuracy and well developed products that have the required theme are some of the considerations that led to the two big companies making it to the net stage.The two companies are multinationals that have developed their brands all over the globe. It is singular that when the US defense secretary cancels Boeings leases other nations still try their products and are continues seeking the products that have been labeled cost ineffective due to the reputation associated with their brand name. The importance of the security system is seen in the number of boulevards and legislative systems that have been put in place to ensure that the process is done in a just manner (Krishnan, 2008).When the airforce declares that Northrop Grumman had won the bid for the airforce tankers, Boeing seeks redress through a diff erent avenue Public accountability office. The office looks at their complaints and decides to freeze the process. It should be noted that it was the same office that had early in the decades frozen a billion dollar Boeing contract due to corruption charges. Even though there are systems put in place to ensure proper procedures in procurement of service and services, they can be outdone easily (Krishnan, 2008).The corruption allegations made in the initial Boeing contracts are a clear case where the protocols were overridden and it only came to realization a couple of months after the contracts had been signed. Furthermore, the fact that is was later found out that a different design could meet the specifications made by the airforce with reduced costs clearly show that even though the guidelines are put in place they are rarely take placeed thus the need for a system or authority that will follow up on the recommendations and processes to ensure that they conform to the laid out g uidelines. most politicians have argued that the French affiliation of the airbus manufacturer is in itself a security risk and therefore a purely American company should be contracted. However, such a contracting systems will obviously lock out other capable companies and therefore bring about questions on the lawfulness of the bidding process. America has prided itself as being a liberalized nation, putting up measures that will lock out other qualified members on the basis of the compositions of its investors is contrary to the spirit of liberalization.Furthermore, being involved with a company that has partnered with a success story in Europe shields the tanker project from American economic downtimes though it effectively ensures that the project is alter by the happening in Europe. It is unrealistic to lobby for Boeing on the basis of confidentiality a company that has already shown traces of corruption cannot be trusted and neither can a company that is yet to prove its wor th in the military sector.Therefore, system should be put in place to ensure that the projects are monitored and compared to some given standards if either is to be awarded the contract. iii. Stability The US is the father of capitalist economy and is therefore a country that is characterized by intense competition between industry players who will always be on the look for redundant finances that will ensure their development into the future (Verkuil, 2007). On the twenty-four hours it was reported that Northrop Grumman had won the military contracts its share prices rose by over 20 cents and Boeings shares fell by a couple of cents (CBS News, 2008).Note, the development in the contract procurement were being watched by investors who will then make their decisions on which company to invest in. Even though the large money involved in the transactions may be enough to lure investors into channeling their resources to a particular company, the reputation involved in being a company contracted with one of the worlds best airforce to develop its aircraft tankers is enough to cause significant changes in the companys share index. Being a capitalistic economy where entities gain at the expense of others, Boeing is bound to feel the pinch.The situation is made worse by the consideration that Boeing has a well developed reputation and therefore failure to win a contract from a partner that it has associated with for a long time may be taken by the investors and its consumers in the wrong light. It may imply that the partner does not trust its capacity to develop superiors products or has doubts on its potential to remain productive. To bring the idea of reputation into perspective, many are of the notion that the corruptions charges brought against Boeing may have affected its chances of successfully bidding for the contract (Verkuil, 2007).This holds considerable weight in that the military is not all about facilities but also reputation. The American people and its enemies will always keep a keen eye on the military and any transactions conducted with a partner who is proved to be corrupt will dent on its integrity thus its reputation. outcome Awarding a contract to a company to deliver services that are of public interest is a complex process and will always involve the media and many other systems that have been put in place to ensure the safety of the public.Individual good and interest will always be central in the arguments brought forward by most people, this is more pronounced if the contract will significantly affect many people. It is therefore upon the government and the social systems to ensure that the systems put in place to ensure effectiveness of the bidding process are functioning mightily and are robust enough to deal with the dynamism associated with such processes. If need be, changes must be instituted to ensure that the system are functioning.The products delivered must measure up to some predetermined standards to e nsure eccentric and accountability. These measures and other quality management measures if well integrated into the bidding and implementation of contracts that are of public interest will ensure that the public benefits in the best realistic way. Word Count 3271 Reference List CBS News (2008). Boeing Spurned On Huge Air Force Contract. Retrieved 13 October 2008 from Krishnan, A. (2008). War as blood line Technological Change and Military Service Contracting. Aldershot Ashgate Publishing, Ltd. Meyer, J. (2007). Working in a War Zone Military Contractors. New York The Rosen Publishing Group. Online News Hour (2008). Boeing, Northrop Grumman Clash Over Tanker Contract. Retrieved 13 October 2008 from United States Government Accountability Office (2008). Statement Regarding the Bid Protest Decision Resolving the aired Refueling Tanker Protest by The Boeing Company. Retrieved 13 October 2008 from Verkuil, R. (2007). Outsourcing Sovereignty why Privatization of Government Functio ns Threatens Democracy and what We Can Do about it. New York Cambridge University Press.