Boeing may drop plans to rebid huge U.S. Air Force tanker opportunity

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Boeing has said that it may not rebid a massive contract to build U.S. Air Force aerial refueling tankers unless the Pentagon allows more time to rework its proposal.

The Department of Defense was forced in June to rebid the $35 billion contract after congressional auditors found flaws in the Air Force's decision to award it to Northrop Grumman and its European partner, EADS.

The Pentagon contract is for 179 aircraft with the initial phase of a fleet replacement project worth about $100 billion over the next 30 years. A Boeing withdrawal from the rebidding would leave the lucrative contract without competition.

Boeing spokesman Dan Beck has said that his company needs six months to present a new bid because the company thinks the new requirements now call for a plane that can carry more fuel than the original proposal.

"We have asked the Pentagon to allow a six-month timetable for submittal of proposals in this competition," he said in a phone interview.

"The reason we're asking for that is since the issuance of the draft request for proposal two weeks ago, as we have engaged in our discussions with the Pentagon, they are asking for a different kind of airplane than they asked for in the first competition."

Beck added, "If we do not get the sufficient time to prepare that proposal, there is really little option for us other than to no-bid in this competition."

The politically charged battle over the contract to build 179 tankers — one of the largest defense contracts in recent years — pits the KC-45, a militarized version of Airbus's 330 against the KC-767, a new version of the Boeing 767.

The Government Accountability Office in June upheld Boeing's challenge of the Air Force decision, saying it found "significant errors" in the evaluation of the two bids.

The Air Force decided in February it preferred Northrop's KC-45 entry, a militarized version of the Airbus 330, because it was larger and could carry more fuel and cargo than Boeing's KC-767, a modified version of the Boeing 767.

The Air Force's attempts to find a replacement for its aging tanker fleet have run into one setback after another, beginning with a procurement scandal in 2003 that dashed its plans to lease the aircraft from Boeing.

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© 2012 Penton Media Inc.


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