Northrop Grumman will bid against Boeing for tanker contract

[Guest Chainsaw]

By Associated PressWASHINGTON (AP) - Northrop Grumman Corp. on Thursday said it will bid on a $40 billion Air Force contract to replace 179 refueling planes.

As recent as last week the Los Angeles-based company hinted it might bow out of the competition and leave rival Boeing Co. as the only bidder. Northrop sought provisions in the contract that would allow for planes with significant cargo space and thereby justify the higher price of its aircraft, compared with Boeing's.

 

"It's our view that the Air Force has addressed the vast majority of our team's concerns," said Northrop spokesman Randy Belote. Northrop will be teaming up on the project with European Aeronautic Defence and Space Co.

 

Boeing spokesman Bill Barksdale declined to comment on Northrop's decision to bid on the contract, but said the Chicago-based aerospace company plans to issue its bid on Monday.

 

The tanker program has been on hold for three years, after Boeing lost the contract amid an ethics scandal that resulted in prison terms for a former senior Boeing executive and a former high-ranking Air Force official. Members of Congress have been critical of the Air Force's handling of the refueling tanker contract and have called for a transparent, competitive bidding process.

 

"We aim to provide as level a playing field as possible giving our requirements in order to provide for fair and open competition," Michael W. Wynne, secretary of the Air Force, said in a statement. "We are pleased to see our industry partners have determined this process has allowed them to compete and when."

 

The $40 billion contract to replace 179 refueling planes is just the first of an expected three-phase deal that calls for more than 500 planes, worth an estimated $100 billion.

 

The Air Force has said it is one of its highest-priority contracts, replacing a portion of the military's older fleet of KC-135, a medium-sized refueling plane made by Boeing and critical to military operations in Iraq and elsewhere.

 

Rep. Jo Bonner, R-Ala., who represents the district where Northrop has said it would build the plane, called Northrop's decision "a tremendous opportunity."

 

Boeing would assemble the planes in Washington state.

 

The deadline for bidding on the contract is April 2. The Air Force will make its decision after a six-month review at the end of October.

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