Speculation that the Boeing Co. might not bid on a $35 aerial refueling tanker contract drove down the company’s stock price in early morning trading.
Aviation Week published this story, citing unnamed sources who say Boeing is “strongly considering” not participating in the expedited rebid of the Air Force competition.
The Chicago-based company is scheduled to meet with Defense Department officials tomorrow. Boeing says it has not made a decision about bidding yet.
As you remember, Boeing successfully protested Northrop Grumman and EADS’s win of the Air Force deal. The Pentagon took over the rebid last month after Defense Secretary Robert Gates fired two top Air Force officials. Just last week, the Department of Defense released a draft of its revised requirements for the rebid. The revisions would give extra credit to the larger Northrop-EADS KC-30 tanker but would consider a longer life cycle cost, which benefits Boeing.
Boeing’s reservations about participating in the contest could put the Pentagon in a pickle. Congress has made a fuss, saying there needs to be a competition for the lucrative tanker contract, not a government handout.
Northrop already played the competition card in early 2007, threatening that it might not participate in the contract if it appeared the Air Force already favored Boeing. The Air Force awarded Northrop-EADS the contract Feb. 29, 2008.
Late last week, analysts wondered whether Boeing might protest the new requirements. The political cartoonist from Alabama’s Press-Register used a potential protest to mock Boeing’s “Strategery” in this cartoon.
Boeing’s shares were down about 2 percent at noon PST.
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