When the price of gasoline rose to more than four dollars a gallon in 2008, it really made people reevaluate the types of cars they drove. Sales of the largest gas-guzzling SUV's dropped like a rock as drivers realized they didn't need to be able to go off-road at the drop of a hat, or be capable of towing a trailer to pick up the kids from soccer practice and take home groceries. They realized that they could save thousands of dollars a year on gas by opting for a right-sized vehicle that met their basic needs and was also economical.

The U.S. Air Force will make a similar calculation when it evaluates each tanker bid for the KC-X program. Assuming both bidders meet the 373 minimum requirements, procurement officials will make a Fuel Burn Adjustment to the Total Proposed Price of the most fuel efficient aircraft. The adjustment will be based on how much fuel a tanker fleet of 179 aircraft would burn in the course of performing a defined set of military missions over the expected 40 year life of the program.

In procurement-speak, fuel costs are a very large part of the "most probable life cycle cost" for an aircraft, which also includes day-to-day operations, support, and maintenance costs. Life cycle costs for the KC-X Tanker program will extend for at least 40 years into the future. Most people are not aware that life cycle costs typically represent 70 to 80 percent of total program costs over decades of military service, with only 20 to 30 percent representing the near-term cost of acquiring the aircraft itself.

If two competing tanker aircraft can meet all of the requirements and perform the same well-defined military mission set, the life cycle cost of owning and operating each aircraft becomes an important discriminator. The decision that the Air Force makes in selecting its KC-X Tanker can result in saving billions of dollars for the U.S Air Force warfighter and the American taxpayer over the next 40 years.