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WASHINGTON, (Reuters) – The U.S. Air Force said on Thursday it was “tweaking” its plans for how it will consider a trade dispute when it picks a winner of a multibillion-dollar transatlantic contest to supply a new refueling fleet.
The Air Force will incorporate the unspecified change in approach on Monday in an updated draft request for bids to build the fleet, said Sue Payton, the Air Force's assistant secretary for acquisition.
Boeing Co. is vying against a team of Northrop Grumman and EADS to supply an initial batch of 179 tankers, about one-third of the projected new fleet.
At issue is how the Air Force will weigh the possible impact of a World Trade Organisation battle between the United States and Europe that could end up involving sanctions. Boeing, the only U.S.-based airliner maker, and Airbus, an EADS subsidiary, have accused each other of improperly benefiting from government subsidies as they vie for commercial sales.
EADS, Europe's biggest aerospace company, has said WTO-related questions have no place in the competition. Chicago-based Boeing is widely seen as benefitting from any Air Force decision to assign significant weight to WTO issues.
The trade-related language is being “tweaked” in a way that will make it “less controversial than it has been,” said Lt. Gen. Donald Hoffman, Payton's military deputy.
Speaking to a small group of reporters, Payton and Hoffman declined to elaborate on the planned revision. They said the Air Force was still on schedule to issue a final “request for proposal” by mid-December.
The Air Force plans to award a winner-take-all contract by late next summer for supply of the tankers over about 15 years. The first 179 tankers are expected to cost in the “double-digit billions” of dollars, Hoffman said.
EADS was knocked out of a previous effort to compete with Boeing in the market for tankers five years ago. Shortly after the Sept. 11 attacks and subsequent plunge in commercial airliner orders, the Air Force sought to lease and then buy 100 Boeing KC-767s in a deal valued at $23.5 billion.
That plan collapsed into a major Air Force procurement scandal that resulted in prison time for a former top weapons buyer and Boeing's ex-chief financial officer over illegal hiring and conflict-of-interest violations.
