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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


Location: Washington, DC

REP. JIM MARSHALL (D-GA): Thank you, Mr. Chairman.

I apologize for not being here earlier. We've been in a commodities market hearing all day long trying to get our handle on these prices that people are suffering with.

I guess I have two questions. First, I assume in the source selection process, as it goes forward, you will not be taking into account impact on the U.S. economy jobs-wise. You won't be taking into account whether or not the competition is appropriately balanced in light of foreign subsidies -- neither of those things will be taken into account. Is that correct?

MR. YOUNG: I don't -- we don't expect to do that.

REP. MARSHALL: So you don't expect to, you don't plan to, you're legally prohibited from doing that. Have you discussed this?

MR. YOUNG: I think that we could probably talk further in the closed session, but in the open session, as I -- competition, innovation and open markets are the principles that guide this country and they are embedded in our lives and rules governing Pentagon acquisition. And so we will executive the new procurement within those laws and regulations. And those laws and regulations do not direct and don't require -- and I think don't necessarily yield best value for the warfighter -- if we factor certain economic aspects of the competition.

REP. MARSHALL: I think the only way that I can ask the second question is by generally referring to an experience that I had in a closed session on this matter, and then use that to inquire concerning process.

Shortly after the decision was announced -- the acquisition decision was announced -- we had a closed briefing at which those making the decision explained why the decision was made that way. And one of the things that struck me is that there was a particular characteristic of the platform that was selected that the decision makers found very attractive. That particular characteristic was included in the RFP.

And if you could sort of look at me -- this would help me -- let's say both parties were required by the RFP to reach a standard of 50 percent, let's say, and the RFP generally says that going beyond that is desirable, you know, that would be great. And in the discussion that we had in closed session, a classified session, the decision makers were saying that the platform that was chosen went well beyond in this particular characteristic and we really like that and here are the reasons we really like that.

In a subsequent closed session with GAO I was left with the impression that going beyond in a particular category was not something that was supposed to be given weight unless both parties understood that it was going to be given weight.

And I asked GAO whether or not a protest had been made about this particular thing and the answer was no, no protests had been made. And then it occurred to me, well, of course no protests would've been made because the other party, the party that lost -- Boeing, in this instance -- would not have known that the decisionmakers were particularly attracted to this particular characteristic.

So it concerns me that both parties, as we move forward, have to know very clearly what kind of weight is going to be put on all these different characteristics, because it really would be very unfortunate if we get to a point where we're finding out that, you know, some characteristic became particularly attractive to the decisionmakers and both parties did not know that, and that characteristic was not necessarily decisive, but an important one in making the actual decision.

MR. YOUNG: Let me try to address that. My guess is you're talking about fuel offload. That's been discussed here. The Air Force intended to assign credit for carrying more fuel than the KC- 135R, consistent with the war-fighting requirements, the requirements --

REP. MARSHALL: That's not what I was talking about, but go ahead.

MR. YOUNG: Okay. Well, I won't read that statement if you're not talking about it.

REP. MARSHALL: It's a general inquiry about the process. As this has evolved, I've kind of been left with the impression that a factor was taken into account that -- to a degree that one party didn't even appreciate and wouldn't have known to protest about because nobody would have even told the party. Certainly I wasn't going to go tell the party.

MR. YOUNG: Yeah, it's hard. Maybe we could do this in a closed session. I -- but I think we're in agreement that in the amended RFP we need to be very clear with industry about any parameters or grouping of parameters that we assign as a priority to get the capability the war fighter wants, so the industry can bid accordingly. And so that's -- we will make that robust effort to be very clear in the RFP about the things we will value and how we will grade them so that industry can respond.

REP. MARSHALL: Thank you, Mr. Chairman.

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