In a surprising move this morning, Secretary Robert Gates announced to Congress that the US Air Force acquisition of the KC-X Refueling Tanker has been cancelled. Secretary Gates, with the aid of Defense and Air Force officials, determined the re-competition of the refueling tankers would not be completed by January 2009. As a result, Secretary Gates is asking for a "cooling off" period to allow for an administration change, and the Department of Defense (DoD) will continue to maintain the current KC-135 fleet with additional funding in FY09. At this time, the DoD is planning to continue funding the KC-X program in the FY10 to FY15 budgets.

The sordid story of this procurement underscores the problems the government faces in managing large scale acquisitions. To come this far only to end in a canceled procurement costs the U.S. taxpayer millions of wasted dollars and subjects companies to millions of dollars in lost profits. In a procurement this size, it also has a material impact on the ecconomy. The GAO indicated earlier that requirements were not clearly defined and cited flaws along the source selection process. The Air Force is now reaping what it sowed.

But, is the Government fully to blame?

The acquisition process may have been badly managed, but the level of scrutiny and interference by Congress and the political issues surrounding this program have surely contributed to this particular outcome.