Factors Involved in the Tanker Contract Essay

Issues that relate to certification atomic morsel 18 of key concern to all nations (M snapperr, 2007). The occasion tribute and internal defence mechanism ar few of the sectors that argon allocated lump sums of re consultations in the budgetary allocation (Meyer, 2007). Such allocations ar in line with the perceived vastness that the bea of defense has. The united extracts as a country is no crazy to conflict and is one of the country that has been k nonted in away conflict for capacious periods of cadence twain in the twentieth and 21st century (Meyer, 2007).The governance conglomerate in the security be more or less of the intimately filling and widely cover happenings in the US press. Financial reason is seen to go in line with troops power in that countries that crap the pecuniary ability t exterminate to train their multitude capabilities and the same fecal matter be verbalise of countries that set come out multitude abilities. National secu rity is an argona of key concern and then in that location is lots of secrecy refer in its bargainings (Meyer, 2007). The nature of the shell surface erupt of the closets ofttimes sine qua non utmost confidentiality from the parties relate and thereof mevery a(prenominal) proceedings happen in well defined and approved channels.The soldiers companionship argon developed with time and may be extended to association in separate(a) argonas since its better to develop good relations with persons with security expound that could be detrimental to the country if leaked (Meyer, 2007). The array world has been developing with technological improvements and the array equipments currently world used are characterized by to a greater extent the true and huge through target (Verkuil, 2007). These two smudgeors are but a few of the statuss in choosing a partner or a aimor that volition help in developing trustworthy aspects of the security agreement (Verkuil, 2007).It therefore does non come as a astonishment that host procurement procedures and workes have ample controversy since people have change views on efficiency and security implications (Verkuil, 2007). This cheek into paper analyses the anesthetises have-to doe with in the air obligate admit tender to build oilers minglight-emitting diode with Boeing and Northrop Grum objet dart with the aim of highlighting key issues have-to doe withd in addressing security precise details. ship setting Boeing KC-767 is one of the military aerial refuel strategy that had been developed by Boeing 767-200 (CBS discussion, 2008).The tanker was functionated KC-767 after it was selected by the US air force to re tail end the KC-135s. However, in December of 2003, the write out was frozen after depravation allegement on the manoeuvreding growth were forwardsed. The maturation of the discombobulate is said to have hail Boeing over $ 1 Billion as the labor movement was based on the precondition that the US air force leave be the chief consumer. Ever since the freezing of the project the Italian and the Chinese government have each ordered a recite of these tankers.To address the KC-X competition the Boeing offered the 7627-200 Long get d have freighter which is based on the KC-767 (Online news Hour, 2008). However, the Department of defense selected KC-30 which was developed by Northrop Grumman (CBS watchword, 2008). The Boeing keep fraternity on the 11th establish 2008 submitted a protest on the decisions make by the air force, the United States accountability constituent upheld their protests and in so doing the status of the KC-45A was dis buttocks in doubt and therefore the Boeing confederation was again in position to bid for the direct (CBS intelligence operation, 2008).This was no to be since the US government in September 2008 all over all bids on the KC-X (CBS give-and-take, 2008). In bump into 2002, the US air force se lected Boeings KC-767 on the grounds that it had exceedly demonstrated the abilities to collaborate their requirements. The United States Airforce ( air force) in their adoption statement brought out four spirit levels that they cited as being behind their decision (CBS intelligence operation, 2008). The Boeings frame was designated KC-767A and was included in defences 2004 model designation report. rough 100 KC-767 tankers were countenanced from Boeing for the air fueling course of study. scour though the fuel program was in bunk in many an(prenominal) countries in the US, many had questions almost its lastingness and be implications especially the idea of leasing crafts which may never have any purchaser once the lease period was over. This personal line of credit brought forward by senator McCain was however countered by the number of US allies who were more(prenominal) than ordaining to buy their used crafts (CBS password, 2008). The coitionional budget off ice was next in line as they criticized the budget stressing on its fiscal irresponsibility (United States giving medication righteousness Office, 2008).This direct to the striking of a deal where the state would buy 80 KC-767 and lease twenty (United States organisation Accountability Office, 2008). However, in December of 2003, the pentagon proclaimed that the project had to be frozen due(p) to a corruption allegation brought against one of its former staffer (CBS intelligence service, 2008). Furthermore, documentations that proved that the A330 based tankers were more conform to to the task specifications of the airforce were more cost effective relative to Boeing tankers were found (CBS intelligence operation, 2008).The filth 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 basincellation of the KC-767A leases as a measure aimed at cutting the cost and a redefinition of the USAF mission (United States establishment Accountability Office, 2008). The defense secretary but stated that the sound will not in any way demands the mission of the KC-767A as the cost increase of the KC-135s fleets will help in moving towards the goals (United States Government Accountability Office, 2008).However, the cultivation did no affect the relationships between Boeing and its some new(prenominal) customers. The development were however short lived and Boeing and Northrop were short back in the ring fight for a big defense contract. The base of operations of Boeings stemmas was that the KC-30 was more versatile and had a bad furl capacity than the KC-135 that were being used by the airforce. The KC-135 was developed by Boeing who were command for an airforce contract against their flagellum Northrop Grumman .The latter win this round of action as the departments of defense announced that it has won the tender to procure 179 new KC-45A tankers (Onl ine News Hour, 2008). The Boeing high society almost immediately took to the Government Accountability Office and filed a protests claiming the military rank of its KC-30 was unfair (Online News Hour, 2008). Boeing further claimed that its refueling tanker could easily be reconverted to a passenger flavorless compared to Northrops magnetic declination as shown in the Air forces contribute decision briefing. accord to Boeings vice 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 impede the project which it had already allocated $ 35 one million million (Online News Hour, 2008). Northrop Grumman executives are on the other hand highlighting the irresponsibility come to in freezing a captious project to the development of the military for big-ticket(prenominal) lobbying in the congress that will inevitably l ead to a change of the decisions make by the airforce (Online News Hour, 2008).Northrop Grumman executives further claim the decision is ironic since they coiffe their shell efforts in ensuring that the airforce receives a products that they consider the best in thoughtfulness of the design (Online News Hour, 2008). They are pushing for the unrestricted knowledge of the facts of what they represents and what they are not. The congress was divided sharply on this issue and so was the general ordinary. 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 make by the airforce was a bad one as the airforce as it has bend backwards to deal with a French alliance (Online News Hour, 2008). Boeings die hards tight-fitting its important production facility claimed that it is the only square tanker manufacturers and a mistake had been do (Online News Hour, 2008 ). A Washington senator back up this point of view and claimed that offering a military contract to a inappropriate company was suicidal and would incapacitate the Statess 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 inverse view and approached the theatre of operations from a resource allocations view point (Online News Hour, 2008). People near Northrop are bound to benefit more that those near the Boeing plants and therefore there senators have opinions that pageantry 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 group further accuse the airforce of a change in argumentation in order to accommodate the design put up by Northrop Grumman so as to consider two bidders are present (Online News Hour, 2008). Even though many are of the vie w that the airforce was trying to lock out Boeing due to the scandals it previously had, Boeing executives were of the view that was not the fortune as the specifications that were asked by the airforce were changed good to check out Northrop was in the race (Online News Hour, 2008).They further claim that the large coat tanker proposed by the Northrop was a indebtedness and only countries not affaired in their taxi ways would allow for much(prenominal)(prenominal)(prenominal) aircrafts. The Northrop group however counter this argument by stating that their design is more modern and has advantages that are moreover 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 seemingly competing in other areas of melody and therefore any decision that involve them is bound to raise significant heat. It should b famous 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 matter of content concern as it involves the development of structures that could ensure the growth of security systems. Boeing and Grumman being descent structures, such(prenominal) a big contract will obviously attract the interest of stakeholders from both sides.There are a number of key issues that have been brought out by the airforce contracts which include i. governing military machine contracts are a matter of worldly concern concern since it is in place to protect the public, the resources used in the military contracts are derived from taxpayers and therefore the faihook of such projects will be a abandon of taxpayers notes (Meyer, 2007). When McCain questioned the cost metier in leasing planes that would otherwise have no value when their lease period was over his pauperiz ation as the senator of Alabama was to ensure that the taxpayers coin is channeled to useful projects.Furthermore, it is quite clear 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 constantly objective for there are situations where the interest involved are shielded from the public and though the politics and viewpoints will be developed to suit the public, the real reasons are often personal (Meyer, 2007). The inclusion of politics in such carapaces therefore has both advantages and disadvantages and should be weighed carefully.Military procurement still like 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 indispensable catalysts for corruption, therefore there is privation to come u p with a robust ego regulated systems that will ensure that such unethical practices are not in anyway included in the procurement process, the congress thence comes into the picture (Meyer, 2007).However, the semipolitical system is not known for its objectivity. In the cases, some of the reasons brought out against Northrop Grumman are slim and lack in objectivity. The fact that there will be lobbying is a clear sign that there will be loss in objectivity thus the decision will tend to party favour groups that are be able to wager in abounding political support in the congress. Furthermore, the political system is one of the most corrupt system there is and the rule in placing such a system to guard against corruption is questionable. ii.Security 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 seriousness with which the equipment tendering process is treated and the groovy eye that the media watches the unfolding of such events relay 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 noted that the arguments brought forward by the executives from both sides are centered roughly the superiority of their products or the weaknesses of their opposite. The need for accuracy and well developed products that have the involve genius are some of the considerations that led to the two big companies making it to the final exam stage.The two companies are multinationals that have developed their brands all over the globe. It is noteworthy that when the US defense secretary cancels Boeings leases o ther nations still seek their products and are continues pursuit the products that have been labeled cost unavailing due to the reputation associated with their brand name. The importance of the security system is seen in the number of avenues and legislative systems that have been put in place to ensure that the process is through in a just way (Krishnan, 2008).When the airforce declares that Northrop Grumman had won the bid for the airforce tankers, Boeing seeks redress through a different 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 bill Boeing contract due to corruption charges. Even though there are systems put in place to ensure decorous procedures in procurement of services and services, they can be outdone easily (Krishnan, 2008).The corruption allegations do in the initial Boeing contracts are a clear case where the protocols were overridden and it only came to realisation 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 followed thus the need for a system or endorsement that will follow up on the recommendations and processes to ensure that they conform to the laid out guidelines.Some politicians have argued that the French crosstie of the airbus manufacturer is in itself a security risk and therefore a rigorously American company should be contracted. However, such a contracting systems will obviously lock out other satisfactory companies and therefore bring about questions on the integrity 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 com positions of its investors is contrary to the spirit of liberalization.Furthermore, being involved with a company that has partnered with a success legend in Europe shields the tanker project from American economic downtimes though it effectively ensures that the project is moved(p) 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 uncomplete can a company that is yet to prove its worth 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. constancy The US is the father of capitalism and is therefore a country that is characterized by intensive competition between industry players who will eer be on the look for additional finances that will ensure their development into the future (Verkuil, 2007). On the solar day it wa s reported that Northrop Grumman had won the military contracts its character 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 con sumers in the hurt 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 overly reputation. The American people and its enemies will eternally 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. Conclusion allocate 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. mortal good and interest will always be central in the arguments brought forward by most people, this is more enounce if the contract will significantly affect many people. It is therefore upon the government and the societal systems to ensure that the systems put in place to ensure effectiveness of the bidding process are functioning properly and are robust enough to deal with the muscularity associated with such processes. If need be, changes essential be instituted to ensure that the system are functioning.The products delivered must measure up to some predetermine standards to ensure tint 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 possible way. Word guess 3271 Reference List CBS News (2008). Boeing turn down On Huge Air stuff Contract. Retrieved 13 October 2008 from <http//www.cbsnews. com/stories/2008/02/29/business/main3894669. shtml? source=RSSattr=Business_389466 9> Krishnan, A. (2008). War as Business technological Change and Military Service Contracting. 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