Pentagon reopens competition on tanker contract

Jul 9, 2008, 17:36 GMT

Washington - The Pentagon will reopen the competition on the contract for the next generation of Air Force refueling tankers originally awarded to the European defence firm EADS, US Defence Secretary Robert Gates said Wednesday.

Gates said the Pentagon will ask EADS, along with American partner Northrop Grumman, and rival Boeing to submit revised proposals for the 35-billion-dollar contract to build 179 aerial refuellers.

Gates said he expected a new winner to be announced in December.

'We'll be able to award a contract and get moving,' he said, adding the need to replace the Air Force's aging fleet of tankers was 'time critical.'

The Government Accountability Office, the investigative arm of Congress, upheld Boeing's formal protest by ruling June 18 that the Air Force made critical errors in awarding the contract and urged the Pentagon to rehold the competition.

GAO ruled the Air Force overlooked key aspects of the Boeing proposal that could have tilted the contract in the aerospace giant's direction, and failed to inform Boeing it was interested in a larger plane before selecting the Northrop-EADS bid.

While the GAO decision was not binding, a failure by the Pentagon to embrace the decision could bring new scrutiny from lawmakers who control the defence budget.

The contract was the first of three that when combined could reach a value of 100 billion dollars over 30 years. Dozens of members of Congress criticized the Air Force for shipping defence jobs abroad at a time when the US economy is struggling.