Boeing left sole $35 billion USAF tanker bidder after Northrop, EADS exit

March 9, 2010, 2:49pm

WASHINGTON, March 9 (AFP) – Boeing was poised Monday to win a $35-billion 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.