Pentagon set to restart tanker competition

Feb 23, 2010, 14:14 GMT

Washington - The US Air Force is close to restarting the competition between two aerospace giants for the contract to build the next generation of aerial refuelling planes, Defence Secretary Robert Gates said Monday.

'I expect it to be released pretty soon,' Gates told reporters, without being more specific.

The anticipated release of the Pentagon's request for companies to submit proposals will revive the bitter competition between US-based Boeing and EADS, the European aviation firm based in France.

EADS, in partnership with Northrop Grumman, had originally won the 35-billion-dollar contract to build 179 tanker planes. But Boeing formally protested the decision, arguing the Air Force changed its criteria in the proposal requests and failed to inform the companies.

A congressional oversight agency upheld Boeing's protest and the Defence Department decided to hold a new competition. The Northrop- EADS alliance has threated to pull out of the competition over concerns that the new proposal will favor Boeing.

Gates, however, said the revised proposal was fair. 'We are very hopeful that we will have two competitors. And we think that it is a very fair' proposal request, he said.

The competition has left lawmakers on Capitol Hill divided. Lawmakers from Washington have backed Boeing because the bulk of the 767 plane in Boeing design will be built in the state. Southern lawmakers have sided with Northrop-EADS because EADS plans to build an assembly plant for its plane, the A330, in Alabama.