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DoD News Briefing with Secretary of Defense Robert Gates, John Young, and Michael Donley from the Pentagon, Arlington, Va.

Presenters: Secretary of Defense Robert M. Gates, Undersecretary of Defense for Acquisition, Technology and Logistics John Young, and Acting Secretary of the Air Force Michael Donley
July 09, 2008
            SEC. GATES: Good afternoon. We're here this afternoon to announce the department's path forward on the KC-X tanker contract. I'll have a short statement. Then Acting Secretary Donley will have a short statement.   
 
            We'll take one or two questions on the tankers. Then if there are questions on other issues, I'll take three or four of those. And then we'll bring the undersecretary for Acquisition, Technology and Logistics to the podium, to answer your more detailed questions about the tanker matter.   
 
            Following the review of the GAO decision on the initial award of this contract, I've concluded that the contract cannot be awarded at present because of significant issues pointed out by the Government Accountability Office.   
 
            I have with me today the acting secretary of the Air Force, Mike Donley, and the undersecretary of Defense for Acquisition, Technology and Logistics, John Young. Mr. Young will brief you more fully on the details, but I want to say a few words first.   
 
            In summary, the GAO sustained eight of slightly more than a hundred issues protested with this contract. We will address all of these in the new solicitation. And we will request revised proposals from industry.   
 
            I have also, with the full support of the Air Force, directed Undersecretary Young to serve as the new source selection authority as well as appoint a new source selection advisory committee.   
 
            It is important to remember that this decision does not represent a return to the first step of a process that has already gone on far too long. On the contrary, given the amount of work that has been done, we believe that we can complete all of this and award a contract by December.   
 
            In short, all GAO findings will be addressed. The source selection authority will be changed. New personnel will be assigned to the advisory committee. And we expect to complete the revised process by year's end.   
 
            We realize there's a tremendous amount of interest and concern by the Congress, industrial partners and foreign governments in how we proceed on this matter. We have been in touch with the leadership of the congressional defense committees this morning to explain this decision.   
 
            While we want to be forthcoming in answering questions, we are also mindful that with this decision, the KC-X tanker program will remain in open competition status, a status that imposes restrictions on what we can openly discuss without jeopardizing the integrity of the decision process.   
 
            Industry, the Congress and the American people all must have confidence in the integrity of this acquisitions process. I believe the revised process will result in the best tanker for the Air Force at the best price for the American taxpayer.   
 
            Secretary Donley.   
 
            MR. DONLEY: Thank you, sir.   
 
            Having been in office for less than three weeks, I had no role in the tanker source selection. I have however been briefed on the Air Force's and OSD's analysis of the GAO decisions and engaged with the secretary and with Undersecretary Young in discussions on the way forward.   
 
            I'd like to take a few moments to address how and why I support the actions just announced by the secretary.   
 
            First, we need immediately to help rebuild confidence in DOD's ability to successfully manage this competition to completion. The Joint Forces supported by the Air Force need a modern tanker as soon as we can field it.   
 
            During the recent protest, the Air Force successfully defended itself against over a hundred protest allegations, some of which were overlapping. And based on this overall performance and my understanding of the transparent and collaborative way in which this process was conducted, I would not conclude that the underlying Air Force acquisition system is somehow fatally flawed. However, the GAO did sustain the protest in eight areas, and this has been sufficient to cast doubt on the Air Force's management of the overall process.   
 
            In my view, having a senior DOD official lead the next phase of this source selection is an appropriate and necessary step to ensure congressional and public confidence that DOD can and will successfully manage to completion a large, complex procurement such as KC-X.   
 
            This is no small matter, and it's not just an Air Force issue. In an environment of fewer contractors and fewer but larger contracts, we can expect protests like these. It is essential for the department, working with Congress, to maintain both internal and public confidence in our acquisition process. Air Force and DOD officials are ready to brief appropriate congressional committees on additional details of the KC-X competition, which still includes protected source selection-sensitive information, and we will protect the integrity of this process going forward.   
 
            Second, the secretary's decisions directly address the concerns raised by GAO. Among the options available, amending and clarifying their requests for proposal and reopening the competition in these areas, while adding several months to process, offers the most direct route to complete the competition, achieve a final decision and field the tanker that represents the best value for the warfighter and the taxpayer.   
 
            Finally, the Air Force needs to rapidly apply the lessons learned from this experience and move forward. Other Air Force acquisition decisions are on the horizon. GAO's conclusions show that even in a large, complex procurement with considerable staff resources and oversight, work accomplished by our contracting personnel, our warfighters and our engineers is not always adequately prepared to withstand the detailed audits and the legal challenges that we can now expect. I've asked Sue Payton, the Air Force's assistant secretary for Acquisition, and her team to ensure that GAO's findings are fully understood and accounted for in preparation for other pending program decisions. 
 
            In sum, restoring confidence in our acquisition process, addressing the GAO's concerns in the source selection directly to get the best value for the warfighter and the taxpayer and rebuilding the Air Force's internal capabilities and credibility going forward look like the right priorities to me. 
 
            SEC. GATES: One or two -- 
 
            Q     (Off mike) -- criteria taken into consideration in this process, for instance, defense industrial base considerations or WTO dispute considerations? 
 
            SEC. GATES: I will defer to Undersecretary Young on that, but to the best of my knowledge such criteria will not be involved. 
 
            Q     Sir, I want to you ask you, what steps to you think you can take to mitigate another protest by the losing competitor come December? There could be a problem with this becoming the A-12 of tankers and just being -- round and round in protests for years and years. Is there anything you think you can do to mitigate that? 
 
            SEC. GATES: Well, I hope that by running a process that is transparent to the competing companies, by complete communication with those companies so that there are no surprises, no considerations that have not been discussed, no criteria that have not been discussed, nothing done that was unfair. My hope would be that when we reach the end of this process we will have a solution, will be able to reward a contract and get moving with the contract. There are few programs, particularly long-term procurement programs in the Department of Defense that are more time-critical than this tanker. 
 
            Q     (Inaudible) -- of restoring confidence in the Air Force acquisitions, why is Sue Payton staying on with her job? 
 
            SEC. GATES: Well, I think that the key here, as Secretary Donley said, GAO sustained significant elements of this contract process.  
 
            And I -- it just seemed to me that it was important -- it will be important for the Congress to have confidence in this process. This is the third time we've gone at this. And under those circumstances, it seemed to me that we were most likely most quickly to gain the confidence of Congress in the way forward by having the undersecretary oversee this particular contract. 
 
            One more on this tanker -- 
 
            Q     (Off mike) -- confidence in her? 
 
            SEC. GATES: Yes, I have confidence in the acquisitions team. I think that Secretary Donley has indicated that there are some areas where there needs to be improvement. But I think we will go forward with that. 
 
            Last question. 
 
            Q     Different subject. I wanted to ask you about the test today -- missile tests in Iran, which were accompanied with some rather bellicose rhetoric from the head of the Iranian air force, talking about our hands on the trigger. He said we can launch our missiles at any time. 
 
            What is your sense of the significance of that test and also the heightened rhetoric back and forth, not just from the Iranians but also from the Israelis? 
 
            SEC. GATES: Well, I think this certainly addresses the doubts raised by the Russians that the Iranians won't have a longer-range ballistic missile for 10 to 20 years. The fact is, they've just tested a missile that has a pretty extended range. So my view in the first instance is, we've been saying, as we've talked about missile defense in Europe, that there is a real threat. And it seems to me that the test this morning underscores that.   
 
            Q     And can you say from the rhetoric back and forth -- I mean, are we any closer to a military confrontation with Iran? 
 
            SEC. GATES: No, I don't think so.  
 
            Q     Mr. Secretary --  
 
            Q     Actually, I'm following up on Jonathan's question, but does this test, which comes on the heels of the Israeli exercise, suggest to you that the temperature is rising to a significant degree in that region? And particularly noting that the U.S. Navy has indeed moved one of its ships into the area, are you sensing a rise in temperatures? 
 
            SEC. GATES: No. No, I think what we're seeing is a lot of signaling going on.   
 
            Q     Sir, again, on the same topic, your -- in your answer to Jon's question, you said it shows the Russians that the Iranians are indeed developing missiles of longer range. 
 
            Can you say whether the missile tests that happened today are actually of weapons that were of longer range than the U.S. had seen before in Iranian testing? 
 
            SEC. GATES: I am not sure of the answer to that, whether we have seen a successful test of this missile or not. I just -- we know the answer to that; I don't know the answer to that.   
 
            Q     (Off mike.) (Laughter.) 
 
            Q     Staying on the same subject, sir. Sorry. But, you know, you say that there's been a lot of signaling. But can you explain to the American people a little more clearly -- there may be some confusion. It seems every day we see signaling from Washington, signaling from Iran and signaling from Israel. How concerned are you about some sort of miscalculation by somebody in this triangle? You say you don't think that the U.S. is headed towards military action, but what is your reading of the tea leaves at this point about the level of tension? 
 
            And as a follow-up, many people in the U.S. military say that Iran, one red line would be if they accept and get delivery of the Russian SS-20 air defense system, that that will give them new capability to defend against any attack, that will extend their air umbrella, and that will be a significant development in the region. What's your reading, sir, all of this? 
 
            SEC. GATES: Well, first of all, I think on these air defense missiles, the stories about those being acquired from Russia, my impression is that, based on what I know, it's highly unlikely that those air defense missiles would be in Iranian hands any time soon. I think that -- the reality is that there is a lot signaling going on, but I think everybody recognizes what the consequences of any kind of a conflict would be.   
 
            And I will tell you that this government is working hard to make sure that the diplomatic and economic approach to dealing with Iran and trying to get the Iranian government to change its policies is the strategy and is the approach that continues to dominate. At this point, I'm comfortable that that remains the case. 
 
            Q     How confident are you that both Israel and Iran, individually their governments understand the potential risk or consequences of conflict? Both of those countries. 
 
            SEC. GATES: I think that they -- well, I believe that they both understand those consequences. 
 
            Q     Mr. Secretary, sir, CNN is reporting that one in five MRAPs downrange has been out of commission at some point due to a lack of spare parts. Can you talk about is there a problem getting spare parts to Iraq and Afghanistan? 
 
            SEC. GATES: No, my latest information is that the readiness rate on the MRAPs is over 90 percent. There are some specific categories where it may be down as low as 87 percent. 
 
            There are some specific categories where it may be down as low as 87 percent. 
 
            Q     Are you worried that as more MRAPs come to theater, that this could be a continuing problem, you have more and fewer spare parts? 
 
            SEC. GATES: No, I don't think. I don't think it's going to be a serious problem. 
 
            Let me take one more question and then -- 
 
            Q     Two quick questions, sir. One - 
 
            SEC. GATES: One question. 
 
            Q     (Terrible ?) situation in Afghanistan -- (inaudible) -- Indian embassy now -- (inaudible) -- that foreign agents may be acting as terrorists. So, where do we stand now as far as situation? They said -- (inaudible) -- also is very much worried about it. (Inaudible.) 
 
            SEC. GATES: I haven't seen any evidence or proof that foreign agents were involved. 
 
            Let me bring Undersecretary Young to the podium now. 
 
            MR. YOUNG: Hello everyone. I didn't intend to make a statement. The secretary made the statement effectively outlining the broad picture of how we will move forward with the tanker. 
 
            Q     (Off mike) -- how this expedited process will work in terms of what steps will be cut out to get this done by December? 
 
            MR. YOUNG: What we are seeking to do is expedite the decision to purchase a tanker. We will not expedite steps in the process. We have to do this methodically, fairly, and without bias in any way. So we will follow a normal acquisition process, we will issue a draft request for proposals, it will be amended to reflect the GAO findings, we will ask the company -- the bidders to provide modified proposals in response to that amended RFP, and then we will allot evaluation time for those -- conduct a new source selection process for those proposals. 
 
            Yes, sir? 
 
            Q     Mr. Young, once the selection is made, will the Air Force get acquisition authority back or will it continue to reside in your office? 
 
            MR. YOUNG: Well, I fully expect the Air Force to manage the contract and execute the program once we make a source selection decision. 
 
            Yes, ma'am? I'm sorry. 
 
            Q     You're not completely reopening the competition. I'm just trying to clarify that you're just amending the original RFP. 
 
            MR. YOUNG: That's correct. As the secretary indicated, there is a substantial foundation and a great deal of review and scrutiny that's been applied to the requirements, the final RFP as well as the proposals, both within the government, by the industry and by the GAO.  
 
            That foundation, I think, is beneficial to build upon, making the corrections that are necessary to move forward. And we can leverage that. We're still going to allot time for industry to modify their proposals as they see fit, once we give them the amended request for proposals. 
 
            Q     Is it a certainty that Northrop no longer will have the contract, then? 
 
            MR. YOUNG: That's correct. There is no contract award right now. And there won't be a contract award. 
 
            Yes, ma'am. 
 
            Q     Just two questions. One, you're only focusing, then, on the seven or eight concerns raised by GAO, exclusively, in the three competitions? 
 
            MR. YOUNG: Yeah. As I understand it, our eight specific findings -- we've analyzed those pretty thoroughly and we believe that we can ask both bidders to modify their proposals to address those concerns based on how we will implement those findings in that amended request for proposals and move forward. I don't -- I think we would like to err on the side of changing the minimum amount. We have a valid requirements document that has not been called into question.   
 
            And, you know, as the secretary said, a great deal of scrutiny and a lot of attention's been paid to all of the pieces of this process. We have to fix certain detailed areas, but I think we would like to err on the side of changing fewer things rather than more things, so that everyone feels they have a fair chance. They understand the process. And the things we would change would be things we can explain. We can explain we changed some because the GAO found a factual issue that we needed to address. We made an adjustment which grounded in the requirements document, or we made any adjustment necessary to the benefit of the taxpayer. I mean, we obviously want to pay careful attention to what this program will cost the taxpayer. 
 
            One arm, I see -- I'm sorry. I'm not order here. 
 
            Q     Sir, could I just go back to Secretary Donley's contention that the system -- the Air Force system's not fatally broken, I think is how he put it. Do you have -- this is not, obviously, the first competition in recent months that has been reopened.   We have the CSAR-X,  that also is reopened. Also, some of the GAO's findings were a little disturbing, particularly one where we had face-to-face conversation going on with Boeing where they were told one thing. Then they go back behind closed doors and decide another.   
 
            I mean, there is some evidence here, it seems to me, that the Air Force is a bit broken in the way they do these things. I mean, is there any effort to -- (inaudible word) -- personnel, structure, the way the Air Force conducts these competitions? 
 
            MR. YOUNG: Well, we implemented a positive step in asking an OSD team to observe that source-selection process. And actually, they found things. My regret is we didn't start sooner. We really started that in December and, as you know, the final proposals were requested, I think, in February or March. And so -- from the beginning, we will start earlier. I think as Secretary Donley said, he's asking the Air Force to make sure they learn all the lessons from this competition. We will learn those lessons at the OSD level and apply them across the services. I mean, we have to work very hard to successfully conduct competitions. 
 
            But as was also said by the secretary, competitions these days are very complicated. They are significant dollar contracts and there are fewer new contracts.  
 
            And so I think the intensity of industry interest is greater, and we have to deal with all those processes.   
 
            I mean, I would tell you in some areas one of the ways that we need to do that is deal less with paper and more with prototype. Some of you are familiar with the fact that I am strongly advocating that we do more competitive prototyping and then we make source selection decisions based on hardware and more knowledge. I'm not advocating it in this particular area, but these are going to be heavily scrutinized activities and we're going to try to learn the lessons here and do the best possible job we can going forward. 
 
            Yes? 
 
            Q     Is Boeing welcome to submit a different aircraft? It has said that it was not fully aware that the Air Force wanted an aircraft that was perhaps larger than the 767 that it bid. If it does, will you still be able to meet your December goal for source selection? 
 
            MR. YOUNG: I want to be clear. You know, the December time frame is a goal, and it's -- we have a timeline that would have us take a number of steps to try to do that, including independently looking at the RFP, independently looking at -- you know, another oversight team observing the source selection evaluation process. So I think we have measured time to do it.   
 
            If significant things change -- for example, if there is a lot of dialogue about the RFP -- the schedule will gradually slip. I mean, it's a day-for-day schedule. That is the best case, to make the source selection decision by the end of the year.   
 
            You know, I'm using the acquisition term of art, and that is, they get to submit modified proposals. But legally, modified proposals mean they can totally change their proposal, and that would include features of what they originally proposed or features -- or a totally new product, if you will. So I believe they will have full license to totally change their proposals in the modification process. 
 
            Q     Because Secretary Gates threw it back to you, the question of whether there would be any new evaluation criteria. Will the defense industrial base implications be taken into account in any way, or the WTO dispute? 
 
            MR. YOUNG: I don't expect to do that. This was one of the issues, I think, discussed with the Government Accountability Office. 
 
            And we put in provisions and required both bidders to state that they understood that no -- the WTO, World Trade Organization process -- if they were fined, none of those fines and none of those costs are allowable charges to the Department of Defense. As I understand it, the GAO understood this to be a fair mechanism to deal with the subsidy process.   
 
            Beyond that, government procurement regulations and laws don't give us mechanisms nor do they seek for us to evaluate a range of factors that are outside of the primary factor. And that is, take the military's requirement; ask for proposals that meet those requirements and try to get a best-value solution using the taxpayers' dollars. That's what we're going to do.   
 
            Q     You said there was no contract. That's contrary to what Northrop Grumman had been saying: It's under contract.   
 
            MR. YOUNG: As I understand it, both companies, in submitting their final proposals, were required to submit contracts they have signed, which the government could sign. I need to understand the last piece of detail there but I do not --  
 
            Q     Is it possible that you --  
 
            MR. YOUNG: Yeah, we can get you that for the record.   
 
            Q     (Off mike.)   
 
            MR. YOUNG: I don't think the government signed its contract. If we did, we still -- I don't think executed that contract. So we're reviewing that right now. I'll have additional. I'll give you some information. I'll make an additional comment tomorrow. There will be a hearing with the Congress, as you understand.   
 
            Q     If I could just follow up on that, how important is the size of the refueling tanker? Is that a big issue?   
 
            MR. YOUNG: How important is the --  
 
            Q      -- size of the refueling tanker? Should it be larger?   
 
            MR. YOUNG: Well, there was an analysis of alternatives conducted for the program, as with other DOD acquisition programs. And the analysis of alternatives, bin aircraft, the aircraft that were bid to us were both characterized as medium-class tankers.   
 
            We have some 808 requirements. That's one thing that, I think, GAO suggested we did not communicate as well to industry, is how we would prioritize or bin or group those requirements and evaluate them. We need to do that better and we will in the new source selection.   
 
            I think the size of the aircraft is less of an issue than it is how you meet our specific requirements. One of those requirements is to carry fuel. It's a tanker. But there are many, many other requirements, from survivability to maintainability to ground handling.   
 
            Q     To clarify that point, are you -- is this new contract going to be looking at just the eight shortfalls that the GAO pointed out? Or are you going to be once again looking at all of the hundreds of requirements for, and when awarding a contract?   
 
            MR. YOUNG: Again we would seek to change the minimum amount of things. We believe there is a valid requirements document. That's not been disputed. It's really not part of the findings. And so we are not going to seek to change a broad range of things.   
 
            We want to change -- we want to address the GAO findings, ground ourselves in the warfighters' requirements, and then to the extent we saw anything that addresses the taxpayers' equities, those are the things that we would discuss. Industry will have a chance to comment on any of the changes we make, because they'll be manifested in that amended request for proposals. 
 
            Q     A quick question, sir. The IOC for this notion that it's going to be 2013 when the Air Force announced it on February 29th -- is that realistic? Can we assume you can still make it under this timetable? 
 
            MR. YOUNG: I think I'd rather -- we'll see what industry bids for the new proposals. 
 
            Q     And a follow-up question. Among the taxpayer equities are increased fuel costs. To what extent will your 25-year life cycle model accommodate your projections for increased fuel prices? And might that be a handicap to a larger aircraft? 
 
            MR. YOUNG: I think we -- the GAO included, as I understand it, a footnote saying we should review that. And I think we constantly review life cycle costs. And so we will do that as part of this process going forward, and we will consider reasonable estimates about the price of fuel. I mean, all of these get to be complicating issues.    
 
            And so one place where we're -- you know, continue to discuss and review is, we have some confidence in what the bidders propose for the cost to develop and build the aircraft. Many of our systems, from fighter aircraft to ships to weapons, are over their 15-, 20-, 25-year life used in ways we didn't anticipate. We still have to consider life cycle costs in developing a weapons system, because that is roughly a third of the Defense budget. But we don't want to overweigh -- you know, we want to balance the known cost to develop and build the tanker with the estimated life cycle cost, and we will do our very best in that to estimate that life cycle cost and include the realistic price of fuel, although it's very difficult to understand, you know, how fuel may vary from here going forward. 
 
            Q     Final question. Do you think in the next week or two you'll have some notion of when you're going to issue the -- (inaudible) -- revised RFP, and when they would have come back with just kind of a rough schedule? 
 
            MR. YOUNG: Right. I mean, in the past I've spoken from this podium and been anxious about that. We have a notional schedule. That schedule may change, because it is not a schedule-driven program. It will be, to some degree, event-driven. But it -- we will -- every day is critical going forward in making both -- from Secretary Gates and Secretary Donley's point of view, in making the decision and getting about the business of buying a new tanker for the Air Force, and every day it's critical to try to make this decision in a timely manner.   
 
            We hope to issue the draft request for proposals in late July or early August. We would hope to make the source-selection decision by the end of the year. 
 
            Q     Okay. Thank you. 
 
            STAFF: We'll take one or two more. 
 
            Q     Mr. Young, since your future tanker is so important to force projection, and since it's such a high-visibility program and such a high dollar value program, why not do a competitive flyoff? Why have you decided against that competitive flyoff moving ahead? 
 
            MR. YOUNG: Hm. It's a good question. Let me try to answer it reasonably succinctly. 
 
            You know, one thing -- I need to be sure and comment about how we move forward. In many places with weapons systems, there's significant technical risk and development risk, and there's great benefit for prototyping. You know, in one particular case, we want to develop a replacement for the humvee, the High Mobility Multipurpose Wheeled Vehicle, called the Joint Lightweight Tactical Vehicle. We want that vehicle to be able to survive the threats that are out there today. So to get a light vehicle (and afford a ?) vehicle, it's probably going to use some exotic materials and designs. That's complicated, and it's worth prototyping.    
 
            These are commercial aircraft being modified to -- with booms and probes and drobes to refuel. There's not as much technical risk, I think, there. To see those prototypes, we would have to spend a lot of research and development money to -- on both programs, and that would not be the best use of taxpayer money. I believe it is -- this -- in this case, it's possible to make a source-selection decision of a commercial-like aircraft and understand the risks and the steps that have to be taken to modify to make it be a tanker and make that decision and be efficient with the taxpayers' money, not spending extra money for development.   
 
            I think that continues into the secretary's decision -- he's reviewed this, he's asked me to review it -- that we believe it is the best use of taxpayers' money to pick one aircraft for the nation. The alternatives would have significant complications.   
 
            We're already getting the benefit in this program of a commercial marketplace that delivers something like 400 aircraft in each company last year. We're going to buy 12 to 15 aircraft per year. We're getting huge benefit from getting commercial market pricing and riding on that commercial industrial base.   
 
            While not -- it's not clear to me that competition at the prototyping or production level will pay us great dividends, it will add significant costs for us in terms of training -- that development money, the testing money, the training money, additional spares, and a long-term life cycle of two aircraft. There's some benefit to the strategy that was laid out that we would pick an aircraft in the KC-X process, and then in the next phase there was a KC-Y and a KC-Z. The government will have a great opportunity to compete again at those future stages. Those are the most efficient ways to spend taxpayer money. 
 
            I was going to answer -- the were able to tell me that the contract was signed, as a result of the source-selection process, but there is a stop work order that remains in place, at present. 
 
            And I'm reviewing how we will proceed from that basis. 
 
            Q     Can you the address the split buy issue -- (off mike) -- that's one a lot of -- some -- (inaudible word) -- types have said why don't they just split the buy? Can you --  
 
            MR. YOUNG: Well, that's what I think I was trying to do. I mean, in a business that delivers 400 -- I think both companies delivered on the order of 400 aircraft last year. We're buying 12 to 15. We do not have the resources in the department to double the amount of money we invest in the department. So not only would it -- we would have to spend the development money and the testing money to develop and test two tankers that split the buy. We would probably have to cut the buy to six, seven, eight aircraft a year between two companies. That would drive the price up further even yet. Then I would have to train people on two different aircraft. And frankly, if I spent the money to develop both tankers, you'd have to ask yourself, well, would you really have another competition at KC-Y?   
 
            There's a great benefit to us for competition. The companies turned in great proposals. We got aggressive pricing. In fact, I would suggest to you, one down side is a split buy would guarantee both companies aircraft. I'm not sure that that will yield the pricing benefits we'd like to have going forward, not nearly as aggressively as selecting one bidder and then saying, "We're going to have another competition at KC-Y. You don't own this marketplace. We will have another competition for KC-Y and yet again get aggressive pricing and try to get the best capability for a warfighter and the best bang for the taxpayer's dollar." 
 
            Q     Since you say the contract was signed -- can I -- if I swapped with someone else -- I'm willing for Bryan to hook me here, too. (Laughter.) 
 
            MR. YOUNG: I've given you a chance, and I want to be fair. Could I catch -- 
 
            Q     Yeah, I just wanted to see -- given the delay to the program because of the protest, is there going to be any change in the cost of the contract? 
 
            MR. YOUNG: Well, again, we'll see what the industry teams propose. I think that would probably be the only silver lining in this, is the possibility that both teams decide to sharpen their pencils and offer the taxpayer and the warfighter an even better deal. 
 
            Q     Can you talk about the deal -- 
 
            MR. YOUNG: Yes, sir. 
 
            Q     Does your statement today constitute the Air Force's required response to GAO -- GAO's finding that the contract -- (off mike) -- does this constitute the Air Force's required response in 60 days? 
 
            MR. YOUNG: Well, we do not -- we're actually not required to respond, I think, to -- we have 60 days, I understand it, legally to say we disagree and ask the GAO to reconsider their findings. As the secretary indicated to you, you know, we've reviewed the findings. 
 
            We think there are legal aspects to them that are correct. They did an amazing amount of work and a very detailed amount of work. We're going to go and address those findings.   
 
            We have, I think, he indicated, you know, in analyzing that, we have prepared some material, that we're going to talk to the Congress about, on how we understand those findings. And that will go forward in the future.   
 
            (Cross talk.)   
 
            Q     Am I right? You would be on the hook for some kind of penalties.   
 
            MR. YOUNG: Can I do that tomorrow?
 
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