Boeing left alone in tanker contest

$35 Billion Job: Northrop Grumman decides not to bid

LES BLUMENTHAL; Staff writer | • Published March 09, 2010

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WASHINGTON - The Boeing Co. now has the inside track on a $35 billion contract to start replacing the Air Force's aging fleet of aerial refueling tanks after Northrop Grumman announced Monday that it wouldn't bid.

Northrop’s partner, the European Aeronautic Defense and Space Co., left open the possibility it could bid on its own, though lawmakers and military analysts said that might be difficult.

“This is now Boeing’s contract to lose,” said Loren Thompson, a defense analyst with the Lexington Institute, a national security think tank based in northern Virginia.

Sen. Maria Cantwell, D-Wash., cautioned Boeing supporters against becoming overly confident.

“It’s too soon to pop the champagne corks,” Cantwell said.

Washington’s other senator, Democrat Patty Murray, agreed.

“Boeing still must bring a very competitive bid to the table that meets all the requirements the Pentagon has set forth,” Murray said.

Defense Department officials didn’t indicate Monday whether they would follow through with the bid process – even though there will likely be only one bid – or negotiate a sole source contract with Boeing. Bids are due in May, and the contract was expected to be awarded this fall.

In a statement, deputy secretary of defense William Lynn said the Pentagon was disappointed Northrop had decided not to bid and insisted the competition was structured fairly, allowing both companies an opportunity to compete effectively.

Boeing supporters on Capitol Hill said Defense Secretary Robert Gates had told them the Air Force would move ahead with awarding the contract even if there was only one bidder.

But Rep. Norm Dicks, D-Belfair, who is about to become the chairman of the powerful House defense appropriations subcommittee, said the bidding should be scrapped and the Air Force should just negotiate a contract directly with Boeing.

“I am confident they can now utilize their authority to proceed with the procurement of KC-767 tankers as quickly as possible, negotiating a contract that will allow the Air Force to begin replacing its tanker fleet rapidly,” Dicks said.

Dicks also suggested that once the tanker is in production, he would push to increase production levels from 15 a year to 20 to 25 a year in an effort to replace the current Cold War-era tankers as rapidly as possible.

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