Boeing Mulls Leaving Air Force Tanker Rebidding
WASHINGTON - U.S. aerospace giant Boeing said Friday it may exit the rebidding for a massive contract to build U.S. Air Force aerial refueling tankers unless the Pentagon allows more time to rework its proposal.
The Department of Defense (DoD) was forced in June to rebid the $35 billion contract after congressional auditors found flaws in the Air Force's decision to award it to Northrop Grumman and its European partner, EADS.
Boeing's loss of the contest in February to rival Northrop and the European Aeronautic Defence and Space Company, parent of Airbus, raised protectionist hackles in the U.S. Congress and shocked the market. Boeing has been the sole supplier of the refueling tankers. The Pentagon contract is for 179 aircraft, the initial phase of a fleet replacement project worth about $100 billion over the next 30 years. A Boeing withdrawal from the rebidding would leave the lucrative contract without competition.
Boeing spokesman Dan Beck told AFP that his company needs six months to present a new bid because the company thinks the new requirements now call for a plane that can carry more fuel than the original proposal.
"We have asked the Pentagon to allow a six-month timetable for submittal of proposals in this competition," he said in a phone interview. "The reason we're asking for that is since the issuance of the draft request for proposal two weeks ago, as we've engaged in our discussions with the Pentagon, and .... they're asking for a different kind of airplane than they asked for in the first competition." Beck added, "If we don't get the sufficient time to prepare that proposal, there's really little option for us other than to no-bid in this competition."
The politically charged battle over the contract to build 179 tankers - one of the largest defense contracts in recent years - pits the KC-45, a militarized version of Airbus's 330, and the KC-767, a new version of the Boeing 767. The Government Accountability Office in June upheld Boeing's challenge of the Air Force decision, saying it found "significant errors" in the evaluation of the two bids. The Air Force decided in February it preferred Northrop's KC-45 entry, a militarized version of the Airbus 330, because it was larger and could carry more fuel and cargo than Boeing's KC-767, a modified version of the Boeing 767.
The Boeing spokesman said Aug. 22 that after three meetings between Boeing and Pentagon officials, the company has concluded the new bid will require a plane capable of carrying more fuel than the plane it originally offered. "This is a new competition. Make no mistake about that. The requirements have changed," Beck said.
The DoD has said it will release the final request for proposals next week.
In response to a question about Boeing's options if the Pentagon does not allow extra time, he said: "One of the options we would have is to protest the (bidding process)."......