Factors Involved in the Tanker Contract Essay

Issues that relate to security are of cardinal concern to all states ( Meyer. 2007 ) . The national security and internal defence are some of the sectors that are allocated lump amounts of resources in the budgetary allotment ( Meyer. 2007 ) . Such allotments are in line with the sensed importance that the country of defence has. The united provinces as a state is no alien to struggle and is one of the state that has been involved in external struggle for long periods of clip both in the twentieth and twenty-first century ( Meyer. 2007 ) .

The political relations involved in the security are some of the most interesting and widely covered occurrences in the US imperativeness. Fiscal power is seen to travel in line with military power in that states that have the fiscal ability tend to develop their military capablenesss and the same can be said of states that have military abilities. National security is an country of cardinal concern and hence there is tonss of secretiveness involved in its traffics ( Meyer. 2007 ) . The nature of the trades frequently require extreme confidentiality from the parties involved and hence many minutess happen in good defined and approved channels.

The military association are developed with clip and may be extended to association in other countries since its better to develop good dealingss with individuals with security inside informations that could be damaging to the state if leaked ( Meyer. 2007 ) . The military universe has been developing with technological betterments and the military equipments presently being used are characterized by more truth and considerable throughput ( Verkuil. 2007 ) . These two factors are but a few of the considerations in taking a spouse or a contractor that will assist in developing certain facets of the security system ( Verkuil. 2007 ) .

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It hence does non come as a surprise that military procurance processs and procedures have considerable contention since people have varied positions on efficiency and security deductions ( Verkuil. 2007 ) . This research paper analyses the issues involved in the air force contract stamp to construct oilers between Boeing and Northrop Grumman with the purpose of foregrounding cardinal issues involved in turn toing security critical inside informations. Background Boeing KC-767 is one of the military aerial refueling scheme that had been developed by Boeing 767-200 ( CBS News. 2008 ) .

The oiler was designated KC-767 after it was selected by the US air force to replace the KC-135’s. However. in December of 2003. the contract was frozen after corruptness allegation on the command procedure were forwarded. The development of the undertaking is said to hold cost Boeing over $ 1 Billion as the undertaking was based on the premise that the US air force will be the main consumer. Ever since the freeze of the undertaking the Italian and the Chinese authorities have each ordered a figure of these oilers.

To turn to the KC-X competition the Boeing offered the 7627-200 Long scope bottom which is based on the KC-767 ( Online News Hour. 2008 ) . However. the Department of defence selected KC-30 which was developed by Northrop Grumman ( CBS News. 2008 ) . The Boeing company on the 11th March 2008 submitted a protest on the determinations made by the air force. the United States answerability office upheld their protests and in so making the position of the KC-45A was placed in uncertainty and hence the Boeing company was once more in place to offer for the contract ( CBS News. 2008 ) .

This was no to be since the US authorities in September 2008 terminated all commands on the KC-X ( CBS News. 2008 ) . In March 2002. the US air force selected Boeing’s KC-767 on the evidences that it had clearly demonstrated the abilities to run into their demands. The United States Airforce ( USAF ) in their credence statement brought out four points that they cited as being behind their determination ( CBS News. 2008 ) . The Boeing’s design was designated KC-767A and was included in DOD’s 2004 theoretical account appellation study. Approximately 100 KC-767 oilers were leased from Boeing for the air refueling plan.

Even though the refueling plan was in topographic point in many states in the US. many had inquiries about its effectivity and cost deductions particularly the thought of renting trades which may ne’er hold any purchaser once the rental period was over. This statement brought frontward by senator McCain was nevertheless countered by the figure of US Alliess who were more than willing to purchase their used trades ( CBS News. 2008 ) . The congressional budget office was following in line as they criticized the budget stressing on its financial irresponsibleness ( United States Government Accountability Office. 2008 ) .

This led to the contact of a trade where the province would purchase 80 KC-767 and rent 20 ( United States Government Accountability Office. 2008 ) . However. in December of 2003. the Pentagon announced that the undertaking had to be frozen due to a corruptness allegation brought against one of its former staff member ( CBS News. 2008 ) . Furthermore. certifications that proved that the A330 based oilers were more suited to the undertaking specifications of the air force were more cost effectual relation to Boeing oilers were found ( CBS News. 2008 ) .

The dirt led to the sentencing of the perpetrator who pleaded guilty to corruptnesss and led to the surrender of Boeing’s CEO. Donald Rumsfeld in 2006 announced the cancellation of the KC-767A rentals as a step aimed at cutting the costs and a redefinition of the USAF mission ( United States Government Accountability Office. 2008 ) . The defence secretary farther stated that the move will non in any manner affects the mission of the KC-767A as the ascent of the KC-135’s fleets will assist in traveling towards the ends ( United States Government Accountability Office. 2008 ) .

However. the development did no impact the relationships between Boeing and its other clients. The development were nevertheless short lived and Boeing and Northrop were shortly back in the ring contending for a large defence contract. The footing of Boeing’s statements was that the KC-30 was more various and had a big furl capacity than the KC-135 that were being used by the air force. The KC-135 was developed by Boeing who were offering for an air force contract against their Nemesis Northrop Grumman.

The latter won this unit of ammunition of conflict as the sections of defence announced that it has won the stamp to secure 179 new KC-45A oilers ( Online News Hour. 2008 ) . The Boeing company about instantly took to the Government Accountability Office and filed a protests claiming the rating of its KC-30 was unjust ( Online News Hour. 2008 ) . Boeing farther claimed that its refueling oiler could easy be reconverted to a rider plane compared to Northrop’s version as shown in the Air force’s station determination briefing.

Harmonizing to Boeing’s frailty president they had more strengths than their rivals was all he heard from the station determination briefing. Boeing’s protests led to a reappraisal of the choice procedure by the answerability office which forced Northrop to stop dead the undertaking which it had already allocated $ 35 billion ( Online News Hour. 2008 ) . Northrop Grumman executives are on the other manus foregrounding the irresponsibleness involved in stop deading a critical undertaking to the development of the armed forces for expensive lobbying in the Congress that will necessarily take to a alteration of the determinations made by the air force ( Online News Hour. 2008 ) .

Northrop Grumman executives further claim the determination is dry since they put their best attempts in guaranting that the air force receives a merchandises that they consider the best in consideration of the design ( Online News Hour. 2008 ) . They are forcing for the public cognition of the facts of what they represents and what they are non. The Congress was divided aggressively on this issue and so was the general populace. Boeing protagonists claim that the Northrop Grumman design was a basic rider airbus plane ( Online News Hour. 2008 ) .

A Kansas Congress adult male was cited claiming that the determinations made by the air force was a bad one as the air force as it has bend backwards to cover with a Gallic company ( Online News Hour. 2008 ) . Boeing’s dice hards near its chief production installation claimed that it is the lone true oiler makers and a error had been made ( Online News Hour. 2008 ) . A Washington senator supported this point of position and claimed that offering a military contract to a foreign company was self-destructive and would disable America’s ability to develop their ain fleet if they should of all time draw out of the trade ( Online News Hour. 2008 ) .

An Alabama province senators is of a different position and approached the topic from a resource allotments view point ( Online News Hour. 2008 ) . Peoples near Northrop are bound to profit more that those near the Boeing workss and hence there senators have sentiments that display their satisfaction or dissatisfaction with the resource allotments ( Online News Hour. 2008 ) . She farther provinces that there have to be also-rans and victor either manner ( Online News Hour. 2008 ) .

The Boeing group further accuse the air force of a alteration in parametric quantity in order to suit the design put up by Northrop Grumman so as to guarantee two bidders are present ( Online News Hour. 2008 ) . Even though many are of the position that the air force was seeking to lock out Boeing due to the dirts it antecedently had. Boeing executives were of the position that was non the instance as the specifications that were asked by the air force were changed well to guarantee Northrop was in the race ( Online News Hour. 2008 ) .

They further claim that the big sized oiler proposed by the Northrop was a liability and merely states non interested in their cab ways would let for such aircrafts. The Northrop group nevertheless counter this statement by saying 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 world’s best known industries of aircrafts and so is Northrop Grumman who are the makers of the airbus ( Online News Hour. 2008 ) .

These are two top trade names who are evidently viing in other countries of concern and hence any determination that involve them is bound to raise considerable heat. It should b noted that both are American companies though Northrop Grumman is partially owned by a Gallic company. The nature of the contract which involves the security of America as a state is a affair of national concern as it involves the development of constructions that could guarantee the growing of security systems. Boeing and Grumman being concern constructions. such a large contract will evidently pull the involvement of stakeholders from both sides.

There are a figure of cardinal issues that have been brought out by the air force contracts which include: I. Politicss Military contracts are a affair of public concern since it is in topographic point to protect the populace. the resources used in the military contracts are derived from taxpayers and therefore the failure of such undertakings will be a waste of taxpayers money ( Meyer. 2007 ) . When McCain questioned the cost effectivity in renting planes that would otherwise hold no values when their rental period was over his motivation as the senator of Alabama was to guarantee that the taxpayers money is channeled to utile undertakings.

Furthermore. it is rather clear that the politicians have the ability to hit down potentially utile trades due to what Northrop Grumman executives refer to as expensive lobbying. Politicss is non ever objective for there are state of affairss where the bets involved are shielded from the populace and though the political relations and point of views will be developed to accommodate the populace. the existent grounds are frequently personal ( Meyer. 2007 ) . The inclusion of political relations in such instances hence has both advantages and disadvantages and should be weighed carefully.

Military procurance merely like any other public procurance strategy is prone to corruptness. this was the instance in the original contract that was brought to an terminal by Rumsfeld in 2006. Furthermore. the large money involved in military procurance processes act as a natural accelerators for corruptness. therefore there is need to come up with a robust ego regulated systems that will guarantee that such unethical patterns are non in anyhow included in the procurance procedure. the Congress therefore comes into the image ( Meyer. 2007 ) .

However. the political system is non known for its objectiveness. In the instances. some of the grounds brought out against Northrop Grumman are flimsy and deficiency in objectiveness. The fact that there will be buttonholing is a clear mark that there will be loss in objectiveness therefore the determination will be given to prefer groups that are be able to earn adequate political support in the Congress. Furthermore. the political system is one of the most corrupt system there is and the principle in puting such a system to guard against corruptness is questionable. two.

Security Military procurance is a security critical affair ( Meyer. 2007 ) . The armed forces is in topographic point to guarantee that the US is protected against its external enemies ( Meyer. 2007 ) . The earnestness with which the equipment tendering procedure is treated and the acute oculus that the media watches the flowering of such events relay the importance placed on the military by the American people. The US is traditionally a ‘fighting nation’ and the effectivity of its military and equipments is one of the factors that has cemented its topographic point as a universe power.

Military activities require high degrees of secretiveness ( Meyer. 2007 ) . There is need to come up with effectual equipments that can be used in varied state of affairss. It should be noted that the statements brought frontward by the executives from both sides are centered around the high quality of their merchandises or the failings of their antonym. The demand for truth and good developed merchandises that have the needed repute are some of the considerations that led to the two large companies doing it to the concluding phase.

The two companies are multinationals that have developed their trade names all over the Earth. It is notable that when the US defence secretary naturals Boeing’s leases other states still seek their merchandises and are continues seeking the merchandises that have been labeled cost ineffective due to the repute associated with their trade name name. The importance of the security system is seen in the figure of avenues and legislative systems that have been put in topographic point to guarantee that the procedure is done in a merely mode ( Krishnan. 2008 ) .

When the air force declares that Northrop Grumman had won the command for the air force oilers. Boeing seeks damages through a different avenue: Public answerability office. The office looks at their ailments and decides to stop dead the procedure. It should be noted that it was the same office that had early in the decennaries frozen a billion dollar Boeing contract due to corruptness charges. Even though there are systems put in topographic point to guarantee proper processs in procurance of services and services. they can be outdone easy ( Krishnan. 2008 ) .

The corruptness allegations made in the initial Boeing contracts are a clear instance where the protocols were overridden and it merely came to realization a twosome of months after the contracts had been signed. Furthermore. the fact that is was subsequently found out that a different design could run into the specifications made by the air force with decreased costs clearly show that even though the guidelines are put in topographic point they are seldom followed therefore the demand for a system or authorization that will follow up on the recommendations and procedures to guarantee that they conform to the laid out guidelines.

Some politicians have argued that the Gallic association of the airbus maker is in itself a security hazard and therefore a purely American company should be contracted. However. such a undertaking systems will evidently lock out other capable companies and hence convey about inquiries on the unity of the command procedure. America has prided itself as being a liberalized state. seting up steps that will lock out other qualified members on the footing of the composings of its investors is contrary to the spirit of liberalisation.

Furthermore. being involved with a company that has partnered with a success narrative in Europe shields the oiler undertaking from American economic downtimes though it efficaciously ensures that the undertaking is affected by the occurrence in Europe. It is unrealistic to buttonhole for Boeing on the footing of confidentiality ; a company that has already shown hints of corruptness can non be trusted and neither can a company that is yet to turn out its worth in the military sector.

Therefore. system should be put in topographic point to guarantee that the undertakings are monitored and compared to some given criterions if either is to be awarded the contract. three. Stability The US is the male parent of capitalist economy and is hence a state that is characterized by intense competition between industry participants who will ever be on the expression for extra fundss that will guarantee their development into the hereafter ( Verkuil. 2007 ) . On the twenty-four hours it was reported that Northrop Grumman had won the military contracts its portion monetary values rose by over 20 cents and Boeing’s portions fell by a twosome of cents ( CBS News. 2008 ) .

Note. the development in the contract procurance were being watched by investors who will so do their determinations on which company to put in. Even though the big money involved in the minutess may be adequate to entice investors into imparting their resources to a peculiar company. the repute involved in being a company contracted with one of the world’s best air force to develop its aircraft oilers is adequate to do important alterations in the company’s portion index. Bing a capitalistic economic system where entities gain at the disbursal of others. Boeing is bound to experience the pinch.

The state of affairs is made worse by the consideration that Boeing has a good developed repute and hence failure to win a contract from a spouse that it has associated with for a long clip may be taken by the investors and its consumers in the incorrect visible radiation. It may connote that the spouse does non swear its capacity to develop higher-ups merchandises or has doubts on its possible to stay productive. To convey the thought of repute into position. many are of the impression that the corruptnesss charges brought against Boeing may hold affected its opportunities of successfully offering for the contract ( Verkuil. 2007 ) .

This holds considerable weight in that the armed forces is non all about installations but besides repute. The American people and its enemies will ever maintain a acute oculus on the military and any minutess conducted with a spouse who is proved to be corrupt will dent on its unity therefore its repute. Conclusion Awarding a contract to a company to present services that are of public involvement is a complex procedure and will ever affect the media and many other systems that have been put in topographic point to guarantee the safety of the populace.

Individual good and involvement will ever be cardinal in the statements brought frontward by most people. this is more marked if the contract will significantly impact many people. It is hence upon the authorities and the societal systems to guarantee that the systems put in topographic point to guarantee effectivity of the command procedure are working decently and are robust plenty to cover with the dynamism associated with such procedures. If need be. alterations must be instituted to guarantee that the system are working.

The merchandises delivered must mensurate up to some predetermined criterions to guarantee quality and answerability. These steps and other quality direction steps if good integrated into the command and execution of contracts that are of public involvement will guarantee that the public benefits in the best possible manner. Word Count: 3271 Reference List CBS News ( 2008 ) . Boeing Spurned On Huge Air Force Contract. Retrieved 13 October 2008 from & lt ; hypertext transfer protocol: //www.

cbsnews. com/stories/2008/02/29/business/main3894669. shtml? source=RSSattr=Business_3894669 & gt ; Krishnan. A. ( 2008 ) . War as Business: 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 & lt ; hypertext transfer protocol: //www. phosphate buffer solution.

org/newshour/bb/military/jan-june08/tanker_05-06. hypertext markup language. & gt ; United States Government Accountability Office ( 2008 ) . Statement Sing the Bid Protest Decision Deciding the Aerial Refueling Tanker Protest by The Boeing Company. Retrieved 13 October 2008 from & lt ; hypertext transfer protocol: //www. governmentexecutive. com/pdfs/061808cd1. pdf & gt ; Verkuil. R. ( 2007 ) . Outsourcing Sovereignty: Why Privatization of Government Functions Threatens Democracy and what We Can Make about it. New York: Cambridge University Press.


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