a tiger on tankers

EVERETT – Its major competitor waffled in recent weeks.

But the Boeing Co. isn’t wavering.

When the U.S. Air Force releases its final requirements this week for bidding on its multibillion- dollar refueling tanker deal, Boeing will have an answer.

“You can count on that,” said Bill Barksdale, with Boeing tanker communications. “We’ll compete.”

Boeing’s rival for the contract, Northrop Grumman, warned the Air Force that the company might not bother to submit a bid because it believes the specifications will favor Boeing, according to a Wall Street Journal report. Regardless of Northrop’s actions, Barksdale said, Boeing won’t back down from the deal. Instead, the company has two options in hand – a 767 tanker and a 777 tanker – and will decide which to offer after the Air Force publishes its final demands.

“The Air Force is making the rules,” Barksdale said. “We’re ready to respond.”

Northrop officials also will wait for the final specifications before deciding whether to participate. A Northrop withdrawal from the competition could put the process into a tailspin. The Air Force needs to demonstrate that the tanker contest has been fair and just, said industry analyst Scott Hamilton.

“After the first round of scandals, the Air Force has to be above reproach,” Hamilton said.

The scandal-ridden refueling tanker bid has given both Boeing and the Pentagon a black eye. Boeing had wrapped up a deal for its KC-767s roughly three years ago until it was discovered that a Pentagon weapons buyer guided the Air Force toward Boeing in exchange for jobs for herself and her family from the company. The ethics lapse sent players on both sides to prison and forced the Air Force to start the process anew.

If selected to build the Air Force’s next refueling tanker, Northrop Grumman would work with Airbus’ parent company, European Aeronautic Defence and Space, to devise a plane similar to the A330 at a manufacturing site in Alabama.

Boeing maintains that its tanker would be built in Washington state, where its commercial airplanes are manufactured. Additional work for the tankers could take place at other locations.

Last fall, the company, which won the original bid with a version of its 767 commercial plane, pitched a second option at the Air Force: a tanker version of its 777 jet. The 777 offers not only larger fuel capacity but also greater seating capacity than does the 767.

“If the Air Force needs a real large tanker, that’s what we’ll give them,” Barksdale said.

Next month, Boeing will deliver its first KC-767 refueling tanker to Japan. The country has a total of four aircraft on order, Barksdale said. Boeing also anticipates delivering the initial two tankers of a four-plane order to Italy later this year.

The company’s demonstrated tanker technology cuts the risk the Air Force or Boeing might experience with an unproven plane, he said.

Industry analysts, including Hamilton, say everything they have heard about the Air Force’s final proposal gives the edge to Boeing. In its revised bid, the Air Force likely will stress the aircraft’s singular role as a tanker rather than the multirole tanker-transport jet that EADS and Northrop are pitching, Hamilton said.

If Northrop throws in the towel, Air Force officials still could try to make the case to Congress that the process wasn’t to blame, thus avoiding a significant delay in the already oft-delayed program.

Regardless which bidder wins the contract, the real decision on the tanker deal will be made in Congress, not by the Air Force, Hamilton said. And Congress isn’t likely to approve a deal that benefits Airbus’ parent company.

“To me, this is Boeing’s contract to lose at this point,” Hamilton said.

Tanker options

Boeings options for the U.S. Air Force refueling tanker bid, compared with the existing KC-135.

KC-767