August 12, 2008 in Nation/World

Boeing may drop out of tanker bidding battle

By Tim Logan St. Louis Post-Dispatch
 

Boeing Co. will meet today with the Air Force about new guidelines for a $35 billion refueling tanker contract.

And if it doesn’t like what it hears, it just may drop out of the long-fought competition.

Citing multiple unnamed sources, a report Monday in industry publication Aviation Week said Boeing is “strongly considering” not submitting a new proposal in the latest round of bidding for the massive job that once was Boeing’s to lose but that now, experts say, seems an uphill fight.

Dan Beck, a spokesman for Boeing’s St. Louis-based Integrated Defense Systems, said he would not discuss the company’s internal deliberations and that no decision has been made.

“All options are on the table,” Beck said.

Today, the company will meet with Pentagon officials at Wright-Patterson Air Force Base in Dayton, Ohio, to share its thoughts on preliminary guidelines for the tanker issued last week. Those guidelines, some analysts and Boeing backers say, appear to favor the larger plane offered by Northrop Grumman Corp. and European Aeronautic Defence & Space Co. over Boeing’s converted 767 freighter.

In a surprise move, the Air Force chose the Northrop/EADS plane, a modified A330, setting off loud protests over the award of such a big military contract, in part, to a foreign company.

Boeing protested and was supported by the Government Accountability Office. Now the Pentagon is running a re-competition, but wants to do so quickly and choose a plane by year’s end.

It plans to issue its final guidelines for the plane in mid-August and wants proposals from Boeing and Northrop by Oct. 1.

“That’s awfully sporty,” said Beck, using an aerospace industry term for a risky proposition. “It’s a pretty robust schedule they’ve put forth and I’ve seen a lot of the concern voiced by members of Congress about it.”

It may be too sporty for Boeing to keep pouring money into the tanker bid if it really feels it can’t win, said Michel Merluzeau, an industry consultant at G2 Solutions near Seattle.

“It is perhaps clearer to Boeing that the KC-30 is really what the Air Force wants right now,” he said. “They have to look at the cost. IDS has spent quite a bit of money on this and they’re fighting an uphill battle.”


Thoughts and opinions on this story? Click here to comment >>

Get stories like this in a free daily email