WASHINGTON: Boeing is poised to win a 35-billion-dollar US Air Force aerial refueling tanker plane contract after rival partners Northrop Grumman and European partner EADS bowed out.
Northrop Grumman said that it had decided not to bid to build the new planes because the US Air Force’s requirements for the KC-X tanker program, published last month, favored Boeing.
The Defense Department’s request for proposals “clearly favors Boeing’s smaller refueling tanker and does not provide adequate value recognition of the added capability of a larger tanker, precluding us from any competitive opportunity,” said Wes Bush, chief executive and president of the US defense contractor.
The Pentagon said it regretted Northrop’s decision.
“We are disappointed by Northrop’s decision not to submit a bid for the US Air Force tanker replacement program,” said William Lynn, deputy secretary of defense.
“In the last tanker replacement competition, Northrop Grumman competed well on both price and non-price factors. We strongly believe that the current competition is structured fairly and that both companies could compete effectively.”
The Northrop-EADS team had won the contract in February 2008, but the deal was canceled after Boeing successfully appealed the decision to the Government Accountability Office, the investigative arm of Congress.
Northrop and EADS, the parent of Boeing’s arch-rival Airbus, at the time had offered a modified version of the commercial Airbus A330, while Boeing had proposed a 767-based tanker.
“This is particularly disappointing given that the Air Force previously had selected the A330-based KC-45 because of its added capability, lower risk and best value,” the European Aeronautic Defence and Space Company (EADS) said in a statement on Monday.
With the exit of Northrop and EADS, Boeing is in prime position to snare the contract to replace the 1950s-era aging fleet of Boeing tankers.
The US aerospace giant Boeing announced last week it would offer a modified version of its 767 commercial airliner, which is smaller than the A330 and consumes less fuel.
The Chicago-based firm had said it would submit its proposal by May 10, within the 75-day period set out in the Pentagon’s request for proposals.
Boeing’s plane will save American taxpayers 10 billion dollars in fuel costs and “is American designed and built,” company spokesman Bill Barksdale said after the rival team’s announcements.
The Pentagon has struggled since 2003 to get a new tanker built.
That year the Pentagon awarded a contract to Boeing but later suspended it amid an ethics scandal involving a company executive and an Air Force official, who was subsequently convicted of criminal conspiracy.
Monday’s pullout may be just another twist in the tortured contest, said Richard Aboulafia, vice president of Teal Group Corp.
“This looks like a significant Boeing win, but we?ve seen several other false starts to this program,” Aboulafia said.
“Additional congressional scrutiny is likely, but congressmen and senators scrutinize programs most heavily when they can produce results for their districts. If there’s no competition, there’s little to be gained from paying more than a token amount of attention,” he told AFP.
An Alabama senator whose state would have benefited from EADS’s promised plant to assemble the tankers, creating 300 jobs, accused the US Air Force of bowing to political pressure.
“The Air Force had a chance to deliver the most capable tanker possible to our warfighters and blew it,” US Senator Richard Shelby said.
“This so-called competition was not structured to produce the best outcome for our men and women in uniform; it was structured to produce the best outcome for Boeing,” the Republican lawmaker said.
The top Republican member of the House of Representatives Armed Services Committee called on Northrop to get back in the race.
“I hope Northrop reconsiders its decision in the coming weeks,” said Representative Howard McKeon.
“I still believe that competition produces the most effective solutions for our warfighters and ensures the best value for US taxpayers.”
