Boeing, Northrop and the power of competitive procurement

Supply Management reports that Northrop Grumman and their European partner EADS have pulled out of a US Department of Defense $35 billion contract for a fleet of 'air tankers'.

This has been a tortuous procurement; in 2004, Boeing was awarded a contract, which was rescinded after an ethics scandal.  The competition was re-tendered and won by Northrop-EADS in 2008, only for Boeing to protest successfully, claimimng errors in the procurement process. This time, Northrop say that, under current rules, their larger A330 tanker could not win.

I don't know enough to comment on the detailed rights and wrongs of this, but you would have thought an output based specification was possible here to create a level playing field .  And there is no doubt that this will have a real cost to the US taxpayer; one of the very few things I have learnt as being undeniably true through my 25 years in business is this;  COMPETITION IS A GOOD THING.

But before we in the UK get too self-congratulatory, here is a Chief Exec of a  UK public sector organisation, commenting a little while ago when the third of four short-listed suppliers dropped out of a very important competition before final bid stage; he said the only bidder left was "an exceptionally strong bidder and we are making excellent progress".

That bidder has now been awarded the contract.  I do hope it is a good one....and it may well be. But would it have been better if they'd had that competitive pressure right up to decision point?  Of course it would.

Share on Procurious

Discuss this:

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.