Air Force tanker contract: Big day for Boeing?

Published 11:12 pm Monday, February 25, 2008

EVERETT — After more than six years in the making, the U.S. Air Force finally could make a decision as early as today on a replacement for its KC-135 aerial refueling tankers.

The contract, worth an estimated $40 billion, will provide its winner with a steady source of income over the next 10 to 15 years. For the Boeing Co., a win would revive its fading 767 production line in Everett and atone for the scandal the company created when trying to secure the initial Air Force contract.

Rivals Northrop Grumman-EADS could raise the status of Mobile, Ala., in the aerospace industry with a win for its KC-30 tanker.

High-level Department of Defense officials met Monday to discuss the Air Force program to replace 179 of its KC-135 tankers, which were built by Boeing and delivered between 1956 and 1965. The government made no award announcement, but Air Force officials have said they hope to make the winner public by the end of February.

Calls from The Herald to the Washington, D.C., offices of representatives from Washington yielded no additional information on when an announcement may be coming.

Boeing had won a lease agreement for tankers with the Air Force following the attacks of Sept. 11, 2001. After disputes over the contract cost and the openness of the process, Congress dropped the deal when Boeing officials were found to have tainted the program by offering jobs in exchange for the contract.

By the time the Air Force started its search again, Northrop had teamed up with Airbus’ parent, the European Aeronautic Defence and Space Co. The consortium is offering a larger tanker than Boeing’s — one based on Airbus’ commercial A330 jet. In January, EADS announced it would move final assembly work on the A330 freighter to Alabama if it wins the Air Force bid.

Overall, Northrop-EADS said its KC-30 will create 25,000 jobs across the country. Boeing says its KC-767 will support 44,000 jobs, including 3,800 in Kansas, where the military applications will be installed.

Boeing has been the odds-on favorite to win the contract. The company has cited its experience in building tankers, while Northrop says its KC-30 offers more versatility to the Air Force.

Each company is expected to formally protest if the other is awarded the contract.

Reporter Michelle Dunlop: 425-339-3454 or mdunlop@heraldnet.com.