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Congress rejects Northrop tanker plea

By Demetri Sevastopulo in Washington

Published: April 3 2008 00:11 | Last updated: April 3 2008 00:11

A Congressional oversight agency on Wednesday rejected requests by Northrop Grumman and the US Air Force to dismiss a Boeing protest over a deal to supply the military with refuelling tankers.

Boeing last month protested to the Government Accountability Office, the oversight arm of Congress, over the air force decision to give EADS, the European defence company, and Northrop, its US partner, a $35bn contract to provide 179 tankers that are used to refuel military aircraft during flight.

The air force and Northrop asked the GAO to dismiss partially the Boeing protest. But Northrop on Wednesday said the GAO had rejected both requests. In a statement, Northrop said the GAO took the decision because Boeing had narrowed the scope of its original protest in a supplemental filing with the government agency.

“Boeing’s decision to abandon the public relations rhetoric contained in its original protest filings is in keeping with our motion,” said Randy Belote, a Northrop spokesman.

“We are encouraged that the company has streamlined its approach. We remain convinced that the air force process that led to Northrop Grumman’s selection was fair, open and transparent, and we look forward to assisting the air force defend its selection decision before the GAO.”

But Bill Barksdale, a Boeing spokesman, said that Northrop’s claim that Boeing had limited its protest was “categorically false”. He confirmed that Boeing had filed two supplemental protests following the initial complaint.

He said the additional protests bolstered Boeing’s case and accused Northrop of employing “spin at the highest level” in welcoming an adverse decision before it was even announced by the GAO.

Boeing alleges that the tanker competition was unfair. The Chicago-based company says air force officials misled them about the size of aircraft they were seeking. Boeing offered a modified version of its 767 aircraft, but the air force chose a version of the larger Airbus 330.

The GAO has 100 days from the initial protest to offer a recommendation. While the decision is not legally binding, the air force has vowed to accept the recommendation. Most analysts believe Boeing has little chance of success with the GAO, but that the company will push advocates on Capitol Hill for support.

In 2002, the air force chose Boeing to sell and lease tankers to the military. Congress later cancelled the deal.

Copyright The Financial Times Limited 2008

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