Boeing scores victory in tanker contract duel with EADS (1st Lead)

Jun 18, 2008, 18:32 GMT

Washington - The US Air Force made a series of mistakes and unfairly awarded a contract for the next generation of aerial refuellers to the Northrop Grumman-EADS partnership, a US congressional auditing agency said Thursday.

The General Accountability Office's decision was a major victory for Boeing in its dispute with the Air Force and rivals Northrop Grumman and EADS over the 35-billion-dollar contract.

'Our review of the record led us to conclude that the Air Force had made a number of significant errors that could have affected the outcome of what was a close competition between Boeing and Northrop Grumman,' Michael Golden, the GAO's managing associate general counsel for procurement law, said.

While GAO's rulings are not binding, the finding could embolden protests from most members of Congress who argued the Pentagon should not have awarded the contract to a European defence firm.

GAO said the Air Force overlooked key aspects of the Boeing proposal that could have tilted contract in the aerospace giant's direction.

The auditors found Boeing offered to meet more non-mandatory requirements, and also that the Air Force engaged in 'misleading and unequal discussions' with Boeing that it was satisfied with a key objective, then later changed that assessment without informing Boeing.

'We are aware of the report and we will review the findings and recommendations,' Lieutenant Colonel Mike Paoli, an Air Force spokesman, said.