Lifecycle cost would be too thorny because of fluctuations in areas outside the Pentagon's control. For example, the price of oil recently dropped, dramatically reducing the lifecycle cost of both aircraft. However, fuel efficiency of the two bids were different, and given the challenge of projecting such costs in the future, Young says the simplest way of conducting a price competition is to focus solely on the up-front price associated with developing and buying the first aircraft.I wanted to make the case that this procurement, more than any other, should take into account the DOD's own new policy on including the fully burdened cost of fuel (FBCF) in its lifecycle and logistic projections for new systems. But adding that on here mid-course would just be adding to the folly. USAF either needs to award this contract based on the criteria it published when it released the RFP, or it needs to kill this acquisition and start fresh. I'd go with the latter of course.
And this time put fuel efficiency at the top of the requirements list. It's disturbing that leadership is so easily swayed by day-to-day fluctuations in the price of energy, when the overall price trends are clearly pointing up, and at risk of spiking on a moment's notice. Haven't we learned anything from the recent several years of energy-induced budget shock? It's not just the high price, it's the volatility that's beating up DOD budgeting and procurement. See posts here, here, here and here.
KC-135 Photo (from inside F-15) courtsy of USAF & James Gordon