Northrop Grumman decides to compete for $40B tanker contract

Averting a potential showdown between Congress and the Air Force, a team led by Northrop Grumman announced Thursday that it would bid for a $40 billion mid-air refueling tanker contract.

Averting a potential showdown between Congress and the Air Force, a team led by Northrop Grumman announced its intention to bid for a high-profile, mid-air refueling tanker contract, after weeks of threatening to pull out of competition.
  
    The Air Force — scarred by a corruption scandal during a previous attempt to lease tanker airplanes from Boeing — circulated copies of its requests for proposal (RFPs) on the Hill to gain support from lawmakers before releasing the official document last week, according to sources.
  
    The service came under fire from lawmakers after Boeing’s rival for the tanker project, Northrop Grumman, said the bidding criteria — focused more on price than particular capabilities — inherently favored Boeing.
    The service revisited its RFP and indicated that the final version changed the competition to be more capabilities-based than the draft RFP would have precipitated.
  
    “We are in a heavy competition now,” Northrop Grumman’s corporate spokesman, Randy Belote, said. “The Air Force has publicly indicated that they changed the RFP to a more capabilities-based, transparent competition and we looked at that very closely and we feel that the AF has addressed the vast majority of our concerns,” he added. “We want to show that it is the best tanker first.”
  
    Northrop formed a team with EADS North America, the parent company to Airbus, which is offering the A330 for the Air Force’s tanker-replacement program. The A330 is bigger and more expensive than the 767 offered by Boeing.
  
    The A330 could carry more fuel, cargo and personnel than Boeing’s 767, but the Air Force argued in the past that a more expensive airplanes would restrict the number of crafts it could buy.

    EADS has been positioning for several years to bid for the program, a potential boost in its plan to strengthen its foothold in the U.S. military market.
  
    The Alabama delegation has fought the Air Force tooth-and-nail to ensure that the Northrop Grumman-EADS team could compete, because EADS North America promised to build the tankers in Mobile, Ala., which would create hundreds of new jobs in the region.
    
    Both Sens. Carl Levin (D-Mich.) and John McCain (R-Ariz.), the chairman and ranking member of the Armed Services Committee, respectively, stressed numerous times that the Air Force should allow for competition in the program.