WASHINGTON, March 18 (UPI) -- The continuing conflict between Northrop Grumman (NYSE:NOC) and Boeing over the U.S. Air Force's gigantic air tanker is unique in the recent history of U.S. military procurement.
The interactions of the dozen or so largest U.S. defense contractors usually resemble an intricate minuet performed by gigantic dinosaurs with an infinite number of interacting appendages. The business of the biggest contractors is often closely intertwined. It is routine for divisions of one giant contractor -- units that as companies of their own would be worth hundreds of millions of dollars, or even billions of dollars in their own right -- to work closely and harmoniously with subcontractors for rival corporations. Even when competition may be intense for a particularly big contract, there is usually little, if any, bad blood afterward, at least in public.
However, the giant corporations of the U.S. defense industry are also like major nations that control their own territories and empires. Companies will develop areas where their own specialty will be taken for granted. General Dynamic Electric Boat therefore is the company that makes nuclear submarines. The Boeing Co. (NYSE:BA) builds the finest strategic bombers and airliners in the world and breathtaking anti-ballistic missile systems too. Lockheed Martin (NYSE:LMT) is famous for the Patriot anti-ballistic missile for which it is the prime contractor.
But occasionally, just as entire provinces may change hands in a war, or overseas colonial empires become independent or change hands, one giant corporation will win a contract in an area which another corporation has looked upon as its own traditional preserve. This happened under the Clinton administration when Boeing won the main orders for the Future Intelligence Architecture -- the next generation of U.S. intelligence, surveillance and reconnaissance satellites, wresting the business from Lockheed Martin, which had been dominant in the field for more than 30 years.
Now Boeing has suffered the same fate in the air tanker market. It has provided the U.S. air force with its fleet of KC-135 air tankers -- originally versions of the Boeing 707 -- for more than half a century. The KC-135s have been flying since the Eisenhower administration and Boeing has done a superlative job of keeping them reliable and efficient for decades longer than their original projected operational life.
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