Boeing weighs exiting $35B tanker competition
Sunday, 24 August 2008

AP, WASHINGTON -- Boeing Co. is considering bailing out of the politically-charged bidding for a $35 billion contract to build aerial refueling tankers for the Air Force, if it does not receive an additional four months by the Pentagon to put together a competitive offer.

The aerospace manufacturer said Friday it also weighing filing a protest on the final bids request -- expected to be released early next week -- which could even further delay an award by the Defense Department.

No final decision will be made until Boeing has a chance to review the final bids request, said Daniel Beck, a Boeing spokesman Friday.
 
Boeing lost the initial contract in February to Northrop Grumman Corp. and its partner Airbus parent European Aeronautic Defense and Space Co., but the bidding is being reopened. A Boeing decision against submitting another bid could jeopardize efforts by the Pentagon to maintain a two team competition to replace 179 Eisenhower-era refueling planes.
 
The deal -- one of the largest in Pentagon history -- is the first of three contracts worth up to $100 billion to replace nearly 600 refueling tankers over the next 30 years.
 
Pentagon spokesman Chris Isleib said the department is still on track to submit its final request for bids early next week, but declined to provide any further comment due to ongoing negotiations.
 
Boeing claims that based on its review of the request for bids, it's clear that the Air Force is looking for a larger-sized aircraft with greater cargo capacity and better fuel offload capabilities.
 
''If we don't receive sufficient time to prepare a competitive proposal, there's really little option for us than to no-bid in this competition,'' said Beck.
 
The Chicago-based company contends it is not asking the Pentagon to change its requirements -- just additional time to put together a competitive offer. It declined to specify what kind of changes it would make in a new bid, but said it is considering other types of commercial aircraft.
 
''We think we can meet these requirements if given the time to put together a proposal,'' said Beck.
 
A spokesman for Los Angeles-based Northrop Grumman could not be immediately reached for comment.
 
Shares of Boeing added $1.53, or 2.4 percent, to $65.08 in morning trading, while shares of Northrop Grumman added 60 cents to $69.99.

Comments Add New
Write comment
Name:
Email:
  We don't publish your mail. See privacy policy.
Title:
Please input the anti-spam code that you can read in the image.