EADS lowers bid for KC-X tanker

Feb. 17, 2011 at 7:38 AM
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WASHINGTON, Feb. 17 (UPI) -- The U.S. unit of European Aeronautic Defense and Space Co. lowered its bid for a $35 billion contract to outfit the U.S. Air Force with new refueling tankers.

EADS North America "did in fact revise our proposal and our price" for the KC-X tanker bid, The Wall Street Journal quoted the firm's Chairman Ralph Crosby as saying Wednesday in Washington.

He didn't specify the price reduction but added he hoped it would be "just enough to win" the bidding war against U.S. rival Boeing Co.

For roughly a decade, multinational European defense and space giant EADS and its daughter Airbus have been in a fierce competition with Boeing for the contract to outfit the U.S. Air Force with 179 in-flight refueling tankers. They're to replace aging fleet of Boeing KC-135 Stratotankers, first introduced in 1957.

Observers had expected the contract to be awarded this month after the date had been pushed back several times. The Air Force initially said it would award the contract in the fall and then before the end of this year.

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

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 filed initial bids in July after the Air Force 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 favored Boeing, a claim denied by U.S. officials.

Boeing says its tanker program will employ 50,000 Americans. EADS claims its plan will employ 48,000 Americans.

Speculation has soared that Washington might split the contract and order planes from both companies. EADS has in the past said it would go for the full deal but would be ready to respond to any size of orders.

In November, it surfaced that the Air Force sent technical assessment letters to competitors Boeing and EADS, the parent of Airbus, that were meant for the other company. Neither company has ruled out a protest over the mix-up, which could further delay the final award.

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