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Northrop Grumman halts work on tanker

Northrop Grumman is in "stop mode" on its Airbus-based tanker while the contract is reviewed.

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By Michelle Dunlop
Herald Writer
Published:
EVERETT -- Progress on a $35 billion aerial refueling tanker contract may be on "hiatus," but lobbying over the disputed bid continues unabated.
After winning the U.S. Air Force contract Feb. 29, Northrop Grumman and EADS have halted work on their KC-30 tanker in lieu of a protest filed by losing competitor the Boeing Co. As the duo waits for the investigative arm of Congress to review the disputed contract, Northrop officials pledged to keep up their aggressive public relations campaign while lobbying Congress for support.
"Northrop Grumman won outright," said Paul Meyer, vice president of Northrop air mobility systems, during an investors conference call. But the Los Angeles-based contractor is in "stop mode" or "on hiatus" until a review of the bid has been completed, he said.
In its protest with the Government Accountability Office, Boeing alleges the Air Force changed the contract requirements in order keep Northrop and EADS in the competition. The GAO has until mid-June to offer a ruling.
For the Air Force contract, Boeing had offered its KC-767 tanker -- a tanker that would have been assembled primarily in Washington and Kansas. On Tuesday, U.S. lawmakers from those two states condemned the Air Force's decision during a late session in the House.
"Americans are outraged by the Air Force's outsourcing of our national security to Europe," said U.S. Rep. Todd Tiahrt, R-Kan.
Boeing supporters such as Tiahrt and U.S. Rep. Jay Inslee, D-Wash., note that the Northrop-EADS tanker is based off Airbus' A330 jet. EADS is the parent company of Toulouse, France-based Airbus. The lawmakers said Tuesday that Boeing's loss not only sends jobs to Europe but also impedes the United States' ability to manufacture defense aircraft for itself. The United States may never again build its own aerial refueling tanker if Boeing's loss is allowed to stand, Tiahrt said.
Northrop-EADS officials have disputed Boeing's claims that they will send jobs to Europe. Instead, they say, the KC-30 tanker will create 48,000 direct and indirect jobs in this country. Boeing has said its KC-767 supports 44,000 American jobs.
"This isn't about a French tanker," Northrop's Meyer said. "This is about Northrop Grumman."
Both tanker contenders picked up support earlier this week.
On Monday, a coalition of conservative organizations called on Congress to review the Air Force's award of the $35 billion contract to Northrop-EADS. The coalition of seven organizations said the Pentagon made "questionable changes" to its requirements that "underminded the integrity" of the nation's defense procurement process. The group also claims that giving the contract to Northrop-EADS could put American defense technology in enemy hands.
Those concerns weren't shared by a group of retired Air Force generals who, also on Monday, sent Robert Gates, secretary of Defense, a letter supporting the Pentagon's choice in the tanker competition. The retirees wrote they are "very troubled by the vitriolic attack" on the Air Force by Boeing and its supporters. The Air Force isn't allowed to consider how its procurement decisions will affect the U.S. industrial base or U.S. jobs, the group wrote.
Meyer said he hopes the consortium will be able to resume work on the tanker in July. In the meantime, the duo will systematically take its case to members of Congress -- excluding lawmakers in Kansas and Washington. "We won. We surprised people. We provided the best value," Meyer said.

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