KPLU Local News
(2010-03-09)
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The Air Force wants new refueling tanker planes to replace the types shown here (behind the jet), in 2005.
AP Photo.
Northrop Grumman and its Airbus-partner EADS announced they're pulling out of the competition. In a statement, Northrop said the Pentagon had re-structured the selection criteria in a manner that "clearly favors Boeing's smaller refueling tanker" and would preclude them from winning. Northrop had been warning since late last year that the new terms did not appeal to them.
"I'm not surprised that Northrop didn't want to bid."
Defense analyst Loren Thompson says the way the requirements for the contract are now written, the winner might even lose money on it. He says the Air Force has put a huge amount of financial risk on the bidders. But Northrop has also announced that it won't protest against the Pentagon's process.
"The only thing that could derail Boeing from getting this contract now is either that it bids too high, or that the Congress gets involved and delays the process. Other than that, this is Boeing's contract to lose."
Washington Senator Maria Cantwell and Representative Norm Dicks were both quick to tell the public they'd received personal assurances from Defense Secretary Robert Gates that the government would go ahead with the contract even if Boeing is the only bidder.
But Boeing isn't declaring victory just yet. Spokesman Bill Barksdale says the company is still working hard on meeting the long list of requirements for the bid.
"It doesn't change what we're going to offer. We have to deliver a very strong proposal on May 10th, to give them a picture of what they could get if we would go on contract with them at some point. We are going to stay laser focused on putting that proposal together and that's really all that matters."
For Boeing, a single-source contract could mean even greater transparency requirements and more scrutiny on its pricing. It could also keep Boeing in play for two additional rounds of tanker contracts - and keep the 7-6-7 line open for decades to come.
For more information:
Statement From Northrop Grumman on U.S. Air Force Aerial Refueling Tanker Program
Sen. Cantwell's Statement on NewGen Tanker
Statement of Rep. Dicks Regarding Northrop Grumman's Decision to Withdraw from Tanker Competition
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