Panel II of a Hearing of the Air and Land Forces Subcommittee of the House Armed Services Committee - The Source Selection and Path Forward Regarding the Air Force KC-(X) Program

Statement

REP. ADAM SMITH (D-WA): Thank you, Mr. Chairman.

Thank you, Secretary Young, for being here. And I'm sure you're aware of this, but just for the record, there is a lack of confidence at this point in the process because of a lot of the mistakes that were made. And I take you at your word that there was not a bias on your part (or within ?) the Air Force. It just seems coincidental that all the mistakes were made in the favor of one company and against another, that many of the subjective judgments were made that way as well. And it has given to a lack of confidence.

I mean, at the most fundamental level, you got the math wrong, okay? The low bidder that was identified was not the low bidder if you added it up correctly. And you can comment on that in a minute. I'll give you that opportunity. But it does lead to a lack of confidence.

So this is going to be very well scrutinized when you say that you're going to go back and change the RFPs.

And my first question on changing the RFPs, as I look at what the GAO found, I don't see why it's necessary off the top to change the RFPs to meet them. I mean, just three of the findings -- the Air Force did not reasonably evaluate the capability of Northrop Grumman's proposed aircraft to refuel all current Air Force planes; there's other stuff there. That was one of them. The Air Force unreasonably evaluated Boeing's estimated non-recurring engineering costs, blah, blah, blah. The Air Force did not reasonably evaluate the military construction costs associated with the aircraft.

Why couldn't you just go back and get it right? Why do you need to change the RFP? Couldn't you go back and reasonably assess those things? So that's the first question is the necessity of changing the RFP. And like I said, we are skeptical about the need to change that RFP and what will happen in those changes. That's a question. Why are you changing the RFP when you could simply go back and do correctly what the GAO identified as the Air Force's doing incorrectly?

MR. YOUNG: We are going to change the RFP in order to address the GAO findings.

REP. SMITH: I thought I asked a fairly clear question. Maybe I didn't. Mr. Young --

MR. YOUNG: The (gist ?) of the question is an editorial comment based on --

REP. SMITH: The first part was an editorial comment. I had to get that out. I apologize. I will give you perfect time to respond to that. The second part of the question is a very specific question. You're saying you're going to go back in and change the RFPs in response to the GAO.

That makes us a little nervous where the RFPs have been shifting and the whole issue about -- I know you don't want to talk about the size of the tanker. But at the end of the day, that is the issue. The Air Force, back in 2002, laid out a very clear set of specifics as to why a larger tanker wouldn't work. And now they've said they've gone back and changed that on the fly, which has created a large number of problems.

But the question is specifically you've said you have to change the RFPs in response to the GAO. I just read three of their findings which simply said that the Air Force did not reasonably evaluate what happened. I don't see why there's a need to change the RFP for that. They could go back in and reasonably evaluate those things. That's my question. Does that make sense?

MR. YOUNG: Yes.

REP. SMITH: Okay.

MR. YOUNG: And I think, when I say change, in some areas we may not have to change the RFP. We just may have to issue the RFP and let the bidders propose modified proposals and make crystal clear that, in the proposals and through discussions with industry, they must provide certain pieces of information required by the RFP. And I think some of the GAO findings demand that information. We will make clear that information as required.

REP. SMITH: In what areas do you think the GAO does require the changing of the RFP?

MR. YOUNG: I believe the first two findings of GAO -- one -- again, I hesitate, but I have studied this.

REP. SMITH: Do you want to take a moment and refer to --

MR. YOUNG: No, no.

REP. SMITH: -- (inaudible)?

MR. YOUNG: It's really an issue -- some of this can be better discussed in the closed session. I will seek to address it in the open session. The first finding says that we had 808 requirements, and we graded them down at the detailed level. And we have not, I think, if I can paraphrase -- the GAO is here, and they can come out in the closed session -- but we needed to be clear with industry on the relative value of those 800 requirements. And we agree with that, because everything in those 800 requirements is not equal. In the source selection process, we did not make that adequately clear. So we need to clarify that in the new RFP so industry can bid accordingly.

I think the other issue is fuel offload. That's the second finding. In that area, as I noted, we accept the GAO finding. I will tell you we don't agree, because the capability development document clearly (with a record ?) says that the objective was to provide more fuel offload capability in a KC-135R. And I have documents I can provide to you that say it was discussed and that there is operational value for the war-fighter to carry additional fuel. And so we need to clarify that in the RFP and let industry teams bid accordingly.

REP. SMITH: Okay. I'm out of time, Mr. Chairman. Thank you.

Source