Boeing to revise tanker bid pitch

Feb. 3, 2011 at 9:52 AM
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WASHINGTON, Feb. 3 (UPI) -- Boeing says it will revise its bid for a $35 billion contract to supply the U.S Air Force with tanker planes.

The deal includes at least 179 aerial refueling tankers and pits Boeing against European rival EADS in vying for the contract.

A Boeing statement said the firm and U.S. Air Force officials discussed the new proposal and anticipated revisions earlier this week. A spokesman said it's not unusual to revise a proposal.

"This was our last opportunity to get feedback from the Air Force on our proposal before the end of the tanker competition," Boeing spokesman Bill Barksdale said in a company blog post.

"Based on this feedback, we're now making final adjustments to our bid, which we will provide February 11 to the Air Force," he said.

The Air Force was expected to render its decision in November. Military and industry officials have long anticipated that the U.S. aerospace giant will clinch the multibillion-dollar deal.

Northrop Grumman Corp. and EADS, the parent company of Airbus, beat Boeing in a similar race three years ago. Their winning bid, however, was annulled after government auditors found that the Air Force had skewed its judgment rules.

The annulment sparked a diplomatic row, with senior European officials berating the United States for what they billed as an act of protectionism. Since then EADS was allowed to return to the bidding process, resubmitting an 8,000-page bid to replace the Air Force's fleet of Eisenhower-era airborne gas stations.

Boeing's 767-based NewGen Tanker is competing against EADS North America's larger Airbus A330-based KC-45 tanker for the contract.

It's the best airplane," Boeing Commercial Airplanes President and Chief Executive Officer Jim Albaugh said earlier this week. "It's an airplane that can put more booms in the sky. It's an airplane that's much more efficient to operate. It's an airplane that can forward deploy to all the fields that the Air Force needs it to go to."

The contest marks the Air Force's third attempt in nearly a decade to try and secure a contract for the planes.

Analysts expect the Air Force to announce its decision in March, replacing the aging planes in the fleet that date from 1950s.

The lucrative tanker contract has set off political debate with lawmakers lobbying either for Boeing or EADS pitted against each other, each hoping to create jobs in their districts.

In its initial bid, Boeing said it planned to save $10 billion in fuel over 40 years of service and maintenance costs estimated at between 15 and 29 percent lower than those of the Airbus plane.

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