WASHINGTON - Thursday's announcement by the Air Force that The Boeing Co. has landed one of the largest contracts in military history is an attempt to end a decade-long saga over the aerial refueling tankers.
The tanker competition between Boeing and Airbus has been marked by a major Pentagon procurement scandal and political maneuverings on Capitol Hill. At first, the Air Force planned to lease the tankers from Boeing, but that would have cost more than buying the planes outright.
When the contract was put up for bidding, EADS teamed with U.S.-based Northrop Grumman to win the contract. But the Government Accountability Office upheld a protest filed by Boeing and overturned the contract.
That led to last year’s rebidding, which again was marked by controversy.
Boeing’s congressional allies had complained that the competition was unfair. They said EADS could underbid Boeing with the help of billions of dollars it received from European governments in market-distorting subsidies.
In June, the World Trade Organization ruled that four European governments had provided illegal subsidies over the past 40 years for every jet Airbus has launched, and that Boeing and the American aerospace industry paid a steep price for the unfair competition. The Air Force, despite strong objections from Boeing’s supporters on Capitol Hill, did not take the subsidies into consideration in deciding on the tanker contract.
The WTO later ruled that Boeing also had received illegal government subsidies, but not to the degree that Airbus did.
In recent weeks, politicians from Washington state and Kansas had stepped up their lobbying by contacting President Barack Obama and Defense Secretary Robert Gates, arguing it would be wrong to give such a lucrative contract to a foreign company.
It’s unclear what will happen next. EADS could appeal the decision, or its allies in Congress could try to withhold funding for the project.
The Chicago Tribune and The Associated Press contributed to this report.