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Possible end seen in fight over new air tankers

Wed., Feb. 24, 2010, 9:52 a.m.

Supporters of Boeing rival pessimistic on staying in hunt

WASHINGTON — Senior Pentagon officials say their latest $35 billion plan to acquire refueling planes is fair.

On Wednesday, the Air Force publicly released its final bid request for the job. But supporters of Northrop Grumman Corp. say the proposal does little to satisfy concerns that the terms are skewed against its larger, more expensive plane.

If Northrop drops out of the competition, Boeing Co. would likely be the only bidder.

Air Force Secretary Michael Donley told reporters that the Pentagon believes “both offers are in a position to win.”

Deputy Defense Secretary Bill Lynn called the proposal “balanced and fair.”

Northrop said in a statement it would fully review the complex bid request before commenting.

The company said last fall it would drop out without significant changes to the criteria. It has teamed with the European maker of Airbus to compete with Boeing. That partner, Paris-based European Aeronautic Defence & Space Co., has seen the deal as essential to breaking into the lucrative U.S. defense contracting market.

“At this point I can only say that I’m disappointed,” said GOP Sen. Jeff Sessions of Alabama, where Northrop would build a major assembly plant in Mobile if it wins the contract. “It appears that the fundamental document has not been changed.”

Rep. Mike Rogers, R-Ala., who joined Sessions in a briefing by Pentagon leaders, agreed. “I don’t think it looks promising,” he said.

Boeing supporters emerged from the briefing optimistic.

“I’m pleased with what I heard,” said Rep. Jay Inslee, a Democrat from Washington, where Boeing plans to build its tankers. “As far as the specifics of the proposal, we’re very much in the game.”

The Pentagon needs to replace its Eisenhower-era fleet of tankers that refuel military planes in-flight. It has tried twice, and failed twice, to award a contract. A deal awarded to Northrop in 2008 was overturned on appeal. In 2004, a Boeing victory was nixed after an ethics scandal that resulted in prison terms for a former company executive and a former Air Force official.

Lawmakers have become intensely involved in the competition because it could mean thousands of jobs for their states. They said the Pentagon outlined a timeframe Wednesday for bids to be submitted within 75 days and a final contract to be awarded in September.

The initial bid involves building 179 tankers, but the job could be expanded.



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