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Mike Benbow, Business Editor
benbow@heraldnet.com
 
Published: Wednesday, July 9, 2008

Tanker bid: Fast reply a good sign for Boeing?

It may mean the Air Force plans to reopen the competition.

EVERETT -- The Pentagon is expected to make public today whether the Air Force will rebid a $35 billion Air Force tanker contract, a move that could keep the Boeing Co.'s prospects alive.

The decision, which Defense Secretary Robert Gates said Tuesday would come soon, was expected today because key lawmakers were apprised by the Air Force on Tuesday afternoon of a pending announcement, according to congressional staff members.

The expected announcement comes nearly three weeks after government auditors said Boeing could have beat out Northrop Grumman and EADS for the contract had it not been for significant errors made by the Air Force. The independent investigators recommended the Air Force reopen the competition.

The quick reply from the Air Force, which had 60 days to respond, could mean that the agency simply plans to follow the recommendations, said Richard Aboulafia, an aerospace analyst with the Teal Group. The Government Accountability Office's ruling created immense pressure from Congress to start the process over, he said.

Boeing initially had been expected to win the competition with its Everett-assembled KC-767 tanker. Northrop and EADS pitched their KC-30, based off an Airbus commercial aircraft. Boeing successfully protested its loss to the GAO, citing irregularities in the bidding process.

Gates fired two top Air Force officials just before the GAO issued its ruling.

The Senate has yet to confirm Gates' recommendation for Air Force secretary. And Sen. Maria Cantwell, D-Wash., has said the Senate could block Gates' choice if the Air Force doesn't rebid the contract.

On Tuesday, Sen. Patty Murray, D-Wash., introduced a Senate resolution calling on the Pentagon to rebid the flawed contract. "The GAO's decision was clear, and today we are reiterating that message so that the Pentagon knows there is no wiggle room," Murray said.

The tanker deal -- one of the largest in Pentagon history -- is the first of three Air Force contracts worth up to $100 billion to replace an aging fleet of nearly 600 refueling tankers over the next 30 years.

The Associated Press contributed to this article.

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