Pentagon extends tanker deadline to accommodate EADS

Apr 1, 2010, 7:21 GMT

Washington - The US Defence Department said Wednesday it was willing to issue a 60-day extension of the deadline for bids on a lucrative contract to build the next generation of aerial refuellers.

The decision would push the May 10 deadline to July 9, allowing the European Aeronautic Defence and Space Company (EADS) more time to come up with a proposal after its US partner, Northrop Grumman, dropped out earlier this month.

Spokesman Geoff Morrell said the extension will only go into effect if EADS formally notifies the Pentagon of its intention to provide a bid, saying that a notification in the next two weeks would be a 'reasonable' timeframe.

EADS had expressed interest in rejoining the process to compete against US rival Boeing, but wanted more time.

An EADS bid would help the Pentagon avoid the criticism associated with awarding a non-competitive bid to Boeing for the 35-billion- dollar deal to build the first 179 KC-X tankers.

Morrell said the Pentagon would shorten its period to evaluate the bids, in order to keep the announcement of the final decision sometime this fall on schedule.

The Northrop-EADS partnership had originally won the bid, but Boeing lodged a protest with a congressional agency that determined errors were made in the process, prompting the Pentagon to reopen the competition earlier this year.

But Northrop withdrew, complaining the new requirements unfairly favoured Boeing.

The contract to replace the ageing fleet of KC-135s has been a sensitive issue internationally and in the US. Boeing supporters in Congress have said that awarding the contract to EADS would cost American jobs.

Congressional backers of EADS, mostly from southern states, argue that the firm's plan to build an assembly plant in Mobile, Alabama, will provide more jobs, and that Boeing relies on foreign contractors to build parts of the plane.

French President Nicolas Sarkozy raised the issues with President Barack Obama in a meeting on Tuesday and said he was satisfied that the Pentagon is committed to a fair process.