Time for some Sequestration

The Air Force has been muddling thru the business of buying tanker places for some years now.  The current tanker fleet is largely the KC135 tankers purchased back in the Eisenhower administration.  Worthy planes, but after 50 years of service it's time for replacements.  After quite a bit of bungling, Airbus bids, court fights and hassle, USAF gave a contract to Boeing to make tankers based on the Boeing 767 jetliner.  This should have been straight forward,  make some more of a well proven civilian jet airliner, leave out the seats and put in tanks to hold jet fuel.  So simple.
  USAF has managed to do significant cost enhancement to this job.  First off, they are having Boeing replace the existing 767 cockpit with the newer and jazzier cockpit from the brand new 787.  This means changing all the instruments over to work off the 767 airframe.  It also means reprogramming the 787 stuff.  $oftware is spelled  Money and Program Delays.  The existing 767 cockpit  worked just fine and is still flying hundreds of 767 from here to everywhere, but that wasn't good enough for USAF.  They had an urge to spend tax money, just for the hell of it.
   This procurement program has been running for nearly two years.  They don't expect to deliver any aircraft for another FIVE well paid years.  Boeing plans to spend a whole year working on the refueling boom.  This is just a piece of pipe sticking out the back of the tanker, to which  client aircraft plug in to fill up.  A year to do a piece of pipe is craziness. 

How Boeing lost the USAF tanker contract (AvWeek)

Monday morning quarterbacking from Boeing. "There was a difference between what the Air Force talked about publicly and the way we read the Request for Proposal ," said Boeing's President Jim Albaugh. Sounds like the Boeing guys didn't get out of the office and schmooze with the customer. Airbus offered the A330 which is a bigger airplane than the 767 that Boeing offered. The Air Force has said they selected the A300 for the bigger payload and longer range. Boeing could have offered the 777 which is a big as the A330, maybe bigger but didn't. They also could have offered both airplanes but didn't want to fund two bid teams, and feared that two teams would compete with each other. That last doesn't make sense, competition is how you get a superior product.
Then Boeing didn't bid the well proven in production version of the 767. Instead they proposed an "improved" aircraft composed of a 767-200 fuselage, overwing exits from the 767-300, structural beefup from the 767-300F freighter model, and cockpit, tail section and flaps from the 767-400 ER extended range model. Speaking as an old USAF flightline maintenance officer, I'd rather have the straight commercial version so I can get parts from regular civilian sources and maybe even get depot level maintenance done at civilian facilities, and use civilian owned flight simulators for crew training.
Boeing's Albaugh claimed their pricing was as good as Airbus ($35 billion) for the first 179 aircraft. Industry sources say Boeing "was unresponsive" to Air Force requests for parts prices for fear that their airline customers could drive harder bargains once they knew what Boeing paid for things like engines.
Boeing lost the enormous F35 Joint Strike Fighter job to Lockheed, and now the tanker contract to Airbus. They had better get the 787 into production real soon now