Pentagon reopens competition for Air Force refueller

Feb 24, 2010, 23:15 GMT

Washington - The Pentagon formally reopened the competition for the 35-billion-dollar contract to build the next generation of aerial refuellers between Boeing Co and its European rival EADS.

The US Air Force force submitted a final request Wednesday, hoping to end years of controversy and bitter feuding between two aerospace giants over how to replace the aging fleet of tankers used to fuel planes in mid-flight.

The competition pits Boeing against Airbus parent European Aeronautic Defence and Space Co and its US partner, Northrop Grumman, and congressional lawmakers seeking to ensure the lucrative contract creates jobs in their respective districts.

'We believe that both offerers are in a position to win this competition,' Air Force Secretary Michael Donley said. 'We hope and expect to have a good competition.'

The Northrop-EADS partnership originally won the competition to begin building the tanker planes, but a congressional oversight agency in June 2008 sided with a Boeing protest and determined that 'significant errors' were committed in assessing the two companies' proposals.

The findings by the Government Accountability Agency prompted the Pentagon to cancel the award and re-do the competition. EADS-Northrop has since complained the terms of new competition give Boeing an unfair advantage and has threatened to not submit a proposal.

Northrop Grumman spokesman Randy Belote confirmed receipt of the Air Force's final request for proposal but said his company will not comment until a review of the document has been completed.

'Obviously Northrop has a choice to make. We're hoping that Northrop chooses with its European partner to bid,' Deputy Defence Secretary William Lynn said.

The KC-X programme has become a pressing issue in the Pentagon as the Air Force has already outlined plans to retire its fleet of KC- 135 tankers whose service stretches back five decades.

Boeing has proposed a KC-767 design based on its commercial counterpart, while Northrop-EADS has selected its KC-30, which is based on the Airbus A330.

The competition has produced a sharp political dispute that cuts across party lines. Lawmakers of the northwestern United States have backed Boeing because the bulk of the plane would be built at a plant in Everett, Washington. Southern lawmakers have supported Northrop-EADS because of its plan to build an assembly plant in Alabama.

Further adding to the sensitivity of the competition is the downtrodden US economy and high unemployment rate. Opponents of Northrop-EADS argue the Pentagon should not be shipping jobs to Europe at a time when they are badly needed at home.

Northrop-EADS has said that 58 per cent of the plane and its components would be built with American labour.