Boeing got its wish on tanker rules, Northrup says

Thursday, August 14, 2008 | 4:59 p.m. CDT; updated 5:05 p.m. CDT, Thursday, August 14, 2008


WASHINGTON — Despite supporters' claims that the competition is slanted against it, Boeing got what it wanted from newly released Pentagon guidelines for a $35 billion Air Force tanker contract, according to the chief executive of rival bidder Northrop Grumman.

"The protester got what it asked for, which was clarification of exactly what is required," Northrop CEO Ronald Sugar said of Boeing in a phone interview Thursday.

"There was no mystery to us as to what the requirements of the system were in the past."

Representatives from both Northrop Grumman Corp. and Boeing Co. met separately with Pentagon officials this week to discuss the new draft request for proposals, part of the second round of bidding on the long-delayed tanker contract. The new draft includes language meant to clarify some of the problems government auditors found after Boeing protested the original award to Northrop.

Among other problems, the Government Accountability Office concluded the Air Force gave extra credit to Northrop's larger plane because it can carry more fuel, and did not specify during the initial bidding that factors such as size would be taken into account. The revised Pentagon guidelines released last week said "additional value" will be given to a plane that exceeds the requirements on fuel.

Boeing's supporters on Capitol Hill say that language still favors Northrop. They also object to the Pentagon's plans to pick a new winner by the end of the year, saying it would make it hard for Boeing to propose a larger plane.

Sugar would not give details on Northrop's meeting with the Pentagon or say whether the company will submit a new bid similar to the KC-45 that won the first round. He did say the new request for proposals appeared to be fair and addressed the GAO's concerns.

"Rather than favoring one company or the other, our view is that it favors the war fighter," he said.

Boeing said this week that it plans to stay in the tanker competition despite reports the company was considering not submitting a bid. But the Chicago-based company said it also seeks a balanced competition and a "realistic" timetable.

Boeing spokesman Dan Beck had no immediate comment on Sugar's remarks.

Los Angeles-based Northrop has suffered a backlash from some lawmakers and labor groups for teaming with European Aeronautic Defence and Space Co., the parent of the European plane maker Airbus, which is Boeing's main rival in the commercial aviation market. Critics say a win for the Northrop/EADS team would drain jobs from the U.S.

But Sugar said a win for Northrop could eventually create 48,000 new jobs in America, most of them at the 230 companies that would do supply and other work for the plane. "We are not shipping jobs overseas," he said.

A win for Boeing would affect thousands of jobs in Missouri, Kansas and Washington state.



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