No further delay for U.S. Air Force tanker

Aug. 5, 2010 at 12:14 PM
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WASHINGTON, Aug. 5 (UPI) -- The U.S. Air Force won't further delay the award date for its $40 billion air tanker contract, a U.S. official said.

Gen. Norton Schwartz, the Air Force chief of staff, said he would be "very, very surprised" if the contract award date would be postponed beyond the current mid-November deadline, reports.

"We're going to come in when we say we are," Schwartz said.

For the past nine years, Boeing and European Aeronautic Defense and Space Co., the parent of European plane maker Airbus, have been locked in an intense battle over the contract to outfit the Air Force with 179 in-flight refueling tankers.

Both companies filed their bids by July 9, after the Air Force had granted EADS a 60-day bidding extension because its American partner, Northrop Grumman, pulled out of the competition. The Los Angeles company left saying the bidding conditions clearly favor Boeing, a claim denied by U.S. officials.

The Air Force initially said it would award the contract in the fall -- despite the 60-day extension for EADS. It has since had to push back that date to Nov. 12 and analysts recently suggested the awarding date could slip past New Year.

For EADS, winning the contract could mean gaining a stronger foothold in the world's largest military market. EADS Chief Executive Officer Louis Gallois said last week his company would "fight hard" to come out on top. Naturally, Boeing wants to prevent that.

The Americans are bidding with an altered version of its Boeing 767, called New Generation Tanker. The Europeans are throwing their KC-45 tanker, a large plane based on the Airbus A330, in the race.

The New Generation Tanker is slightly smaller and probably cheaper than the KC-45 and has received substantial support from U.S. lawmakers; the European plane has logged more flight testing hours and is closer to serial production, experts say.

Both companies have argued that winning the contract would create and support thousands of U.S. jobs.

The KC-45 won the contract in February 2008 but the decision was overturned four months later by the Government Accountability Office after Boeing challenged it. The GAO said it found problems with the bidding and the contract is up for grabs.

Moreover, both sides are accusing each other of profiting from illegal government subsidies.

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