May 4, 2010 in Business, Nation/World

Pentagon delays tanker award to Nov. 12

Associated Press

MINNEAPOLIS — The Pentagon is delaying the award of a huge contract for its new tanker jet by almost three months, pushing it past the November elections.

The contract is worth at least $35 billion to build 179 refueling jets. Bids are expected from Boeing Co. and European Aeronautic Defence and Space Co.

The Pentagon’s choice between Boeing, based in Chicago, and France-based EADS will be highly charged. Each company has allies in Congress who are eyeing jobs promised for their districts.

Asked whether it aimed to choose a winner before the elections, Pentagon spokesman Geoff Morrell said on March 31 that politics are not a factor. The Pentagon did not immediately respond to requests for comment on Tuesday.

EADS had wanted to bid with a U.S. partner but failed to find one. Two weeks ago it said it would bid alone. At the company’s request, the Pentagon extended the bidding deadline by two months, to July 9.

The Pentagon had said it would still try to award the contract in the early fall.

But the new date of Nov. 12 is almost three months later than the previous date — even though the bid deadline was extended only two months. The Pentagon included the new date in a little-noticed update to the bidding procedures on Thursday, telling bidders they should “prepare their proposals assuming a contract start date” of Nov. 12. The change was reported by The Air Force Times.

The Air Force needs to replace its KC-135 refueling tankers, which date to the 1950s. It has been trying to pick someone to make the new tanker since 2003.

Boeing shares fell $1.88, or 2.5 percent, to $72.51 in afternoon trading.

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