Pentagon meets Boeing, Northrop on tanker contract

Aug 13, 2008, 13:59 GMT

Washington - The Pentagon met Tuesday with representatives from Boeing and the rival Northrop Grumman-EADS partnership over the disputed contract to build the next generation of aerial refuellers, Pentagon and defence industry officials confirmed.

Pentagon officials are expected to clarify and answer questions from the defence firms about the draft criteria for submitting bids to win the 35-billion-dollar contract to build the 179 KC-X tankers, said Cheryl Irwin, a Pentagon spokeswoman.

The Pentagon sent the draft request to the firms last week and expects to issue a final request to Boeing and Northrop-EADS to submit final proposals later this month, Irwin said. Pentagon officials held separate meetings Tuesday morning with Boeing and later with Northrop.

The contract was initially won by the Northrop-EADS team, but a congressional oversight agency upheld a protest by Boeing, effectively forcing the Pentagon to repeat the competition.

Aviation Week, a leading aerospace publication, reported Monday that Boeing might drop out of the competition. Citing 'multiple sources,' Aviation Week said that Boeing was 'strongly considering' the option of not submitting a proposal.

Dan Beck, a Boeing spokesman, played down the article: 'We don't know who the Aviation Week sources were, but Boeing has not been talking about our internal deliberations. No decisions have been made. All options remain on the table.'

Some members of Congress who support Boeing have said that the criteria in the new proposal request by the Pentagon is tilted to the advantage of Northrop-EADS. If Boeing pulls out of the competition, it would leave the Pentagon in the uncomfortable position of having a single bidder for the contract.

The Government Accountability Office (GAO), an investigative arm of Congress, found in a June 18 report that the Air Force made critical errors in awarding the contract to Northrop and the European Aeronautic Defence and Space Company.

Defence Secretary Robert Gates announced July 9 that he had accepted the GAO findings and planned to restage the competition under an expedited process, citing the need to quickly replace the Air Force's aging fleet of KC-135 tankers.