Will the U.S. Air Force ever get its new refueling tankers?
It seems like we've been waiting forever to learn the winner of the epic KC-X Tanker Contest between Boeing (NYSE:BA) and Northrop Grumman (NYSE:NOC). (In fact, it's been "only" seven years.) Earlier this month, the Pentagon promised to publish its revised Request for Proposals in just a "few weeks." Investors began to hope that we -- along with Team Boeing bidders Honeywell (NYSE:HON), United Tech (NYSE:UTX), and Spirit AeroSystems (NYSE:SPR) -- would soon get a glimpse at the requirements.
No such luck. Yet another deadline has fallen by the wayside.
Another lost decade
Yesterday, Air Force Chief of Staff General Norton Schwartz advised that the Pentagon is still tweaking the "financial arrangements" required for participation in the competition. We'll need to see the details to be certain what got tweaked. For now, all we know is that the news we expected this month could be as long as the end of February in coming.
And even then, it will be months before we know the winner -- and years before the first plane arrives on the tarmac. Pentagon sources suggest no contract will be awarded before this summer (call it six months), with procurement to begin in perhaps 2013 (three more years).
And there you have it, folks. A decade after the Pentagon first announced its plan to upgrade the Air Force refueling fleet, we might finally see our first plane. A whole decade lost to dithering. Woo-hoo!
One if by air ... how many if by sea?
Let's hope the Pentagon procurers can do a better job with its other major procurement project. While Boeing and Northrop duke it out up in the air, down here at sea level, Lockheed Martin (NYSE:LMT) and General Dynamics (NYSE:GD) are contesting for the right to build 10 Littoral Combat Ships (LCS) for the Navy.
The LCS isn't as big a deal as the KC-X, but only just barely. Congress has slapped a $460 million per-unit cap on the LCS project, but when multiplied by the 55-ship LCS fleet that the Navy hopes to purchase, this still suggests a total value of $25 billion -- the lion's share of which should go to whomever wins this first big, multi-ship tranche.
Who will win the contract? Should you ring up your broker immediately to place your bets? Perhaps not. According to the Navy, it, too, is just -- surprise! -- "weeks away" from making a decision.
Sigh.
