Northrop, EADS drop U.S tanker bid, Boeing only contender left

Northrop Grumman and European partner EADS said Monday they would not bid for a 35-billion-dollar US Air Force aerial refueling tanker plane contract, clearing the way for a Boeing win. Northrop Grumman, a top US defense contractor, said it had decided not to compete because the US Air Force's request for proposals for the contract published last month "favors" Boeing. Northrop said that following a "comprehensive analysis" of the requirements, it would not submit a bid to the Department of Defense for the KC-X aerial refueling tanker plane program. The request "clearly favors Boeing's smaller refueling tanker and does not provide adequate value recognition of the added capability of a larger tanker, precluding us from any competitive opportunity," Wes Bush, chief executive and president of Northrop Grumman, said in a statement. The Pentagon said it regretted Northrop's decision. "We are disappointed by Northrop's decision not to submit a bid for the US Air Force tanker replacement program," said William Lynn, deputy secretary of defense. "In the last tanker replacement competition, Northrop Grumman competed well on both price and non-price factors. We strongly believe that the current competition is structured fairly and that both companies could compete effectively." The Northrop-EADS team had won the contract in February 2008, but the deal was canceled after Boeing successfully appealed the decision to the Government Accountability Office, the investigative arm of Congress. Northrop and EADS, the parent of Boeing's arch-rival Airbus, at the time had offered a modified version of the commercial Airbus A330, while Boeing had proposed a 767-based tanker. "This is particularly disappointing given that the Air Force previously had selected the A330-based KC-45 because of its added capability, lower risk and best value," the European Aeronautic Defence and Space Company (EADS) said in a statement on Monday. Boeing announced last week it planned to offer a modified version of its 767 commercial airliner, which is smaller than the A330 and consumes less fuel. The US aerospace giant had said it would submit its proposal by May 10, within the 75-day period set out in the Pentagon's request for proposals. In 2003, the Pentagon awarded a contract to Boeing but later suspended it amid an ethics scandal involving a company executive and an Air Force official, who was subsequently convicted of criminal conspiracy. Boeing's plane will save American taxpayers 10 billion dollars in fuel costs and "is American designed and built," company spokesman Bill Barksdale said after the Northrop-EADS announcements. "This looks like a significant Boeing win, but we?ve seen several other false starts to this program," Aboulafia said. "Additional congressional scrutiny is likely, but congressmen and senators scrutinize programs most heavily when they can produce results for their districts. If there?s no competition, there?s little to be gained from paying more than a token amount of attention," he told AFP. An Alabama senator whose state would have benefited from EADS's promise to open a plant to assemble the tankers, creating 300 jobs, accused the US Air Force of kowtowing to political pressure.