Pentagon Clarifies Bidding Criteria for Disputed Tanker Contract | Business| Economy and finance news from a German perspective | DW | 13.08.2008
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Pentagon Clarifies Bidding Criteria for Disputed Tanker Contract

Pentagon officials shed light on criteria for submitting bids for tankers, which some members of US Congress said favors the European aeronautics consortium EADS over its American rival Boeing.

Prototype of tanker aircraft

Boeing denies allegations that it would withdraw its tanker bid

The Pentagon met Tuesday, Aug. 12, with representatives from Boeing and the rival Northrop Grumman-EADS partnership over the disputed contract to build the next generation of aerial refueling tankers, Pentagon and defense industry officials confirmed.

Pentagon officials were expected to clarify and answer questions from the defense firms about the draft criteria for submitting bids to win the $35 billion (23.5 billion euro) contract to build the 179 KC-X tankers, said Cheryl Irwin, a Pentagon spokeswoman.

The Pentagon sent the draft request to the firms last week and expects to issue a final request to Boeing and Northrop-EADS to submit final proposals later this month, Irwin said. Pentagon officials held separate meetings Tuesday morning with Boeing and later with the Northrop-EADS group.

Report: Boeing could withdraw bid

A photo of a Boeing 707 tanker plane with two F-18 jet fighters of the Spanish Air Force connected to refueling hoses

Some US politicians said the contract details favored EADS

The contract was initially won by the Northrop-EADS team, but a congressional oversight agency upheld a protest by Boeing, effectively forcing the Pentagon to repeat the competition.

Aviation Week, a leading aerospace publication, reported Monday that Boeing might drop out of the competition. Citing "multiple sources," the magazine said Boeing was "strongly considering" the option of not submitting a proposal.

Dan Beck, a Boeing spokesman, played down the article: "We don't know who the Aviation Week sources were, but Boeing has not been talking about our internal deliberations. No decisions have been made. All options remain on the table."

Some members of Congress, who support Boeing, have said that the criteria in the new proposal request by the Pentagon are tilted to the advantage of Northrop-EADS. If Boeing pulls out of the competition, it would leave the Pentagon with just one bidder for the contract.

The Government Accountability Office (GAO), an investigative arm of Congress, found in a June 18 report that the Air Force made critical errors in awarding the contract to Northrop and the European Aeronautic Defence and Space Company.

US Defense Secretary Robert Gates announced July 9 that he had accepted the GAO findings and planned to restage the competition under an expedited process, citing the need to quickly replace the Air Force's aging fleet of KC-135 tankers.

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