Tanker decision could come today — or not

Published 10:57 am Friday, February 29, 2008

EVERETT — Will the winner of a $40 billion tanker contract with the U.S. Air Force please step forward?

By the end of today, either the Boeing Co. or the Northrop Grumman and EADS duo could be named to supply the Air Force with 179 aerial refueling tankers over the next two decades. The decision, which has been expected all week, could be handed down at 2 p.m. Pacific time.

Then again, the announcement “absolutely” could slide into next week, Pentagon spokesman Bryan Whitman told Reuters on Thursday.

Once the Air Force makes its choice public, don’t expect the issue to be over. The losing defense contractor is expected to mount a protest with the Government Accountability Office.

The agency, which would have 100 days to review the complaint, could recommend rebidding the contract if it finds extensive errors were made by the Air Force in the process. Last year, the GAO suggested the Air Force rebid a $15 billion contract it had awarded to Boeing to supply the agency with search-and-rescue helicopters.

Pentagon officials seem to be launching a campaign to pre-emptively stop a protest, suggesting that it could delay the delivery of the much-needed tankers by as much as 18 to 24 months.

Air Force officials say they are taking great pains to ensure the contract is awarded fairly.

“We’re really making sure all the ‘i’s are dotted and ‘t’s are crossed,” Sue Payton, assistant secretary for the acquisition, told Reuters.

Payton also said her “best bet” is that the Air Force will announce the winner today after the close of the financial markets.

The Boeing Co.’s Everett-built KC-767 has been considered the favorite for the lucrative deal, despite its involvement in an ethics scandal during a similar tanker bid several years ago.

Northrop, which teamed up with Airbus’ parent company EADS to offer the KC-30 tanker, last year considered dropping out of the competition because of concerns that the Air Force’s bid unfairly favored Boeing. The Los Angeles-based contractor and EADS would assemble the KC-30 in Alabama.

Analysts, however, say the Air Force likely will pick Boeing partly because the KC-30 is derived from the commercial A330 built by European jetmaker Airbus.

Reporter Michelle Dunlop: 425-339-3454 or mdunlop@heraldnet.com. To comment on the Air Force tanker contract, go to her aerospace blog at heraldnet.com.