Tanker
Boeing "Surprised" At Northrop's Pull-Out Of Tanker Contract Competition.
The Hill (3/11, Tiron) reports Boeing defended the Pentagon's bidding process for the $35 billion mid-air refueling tanker contract, with Tim Keating, Boeing's Senior VP for Government Operations saying, "It's just not the case that [the bidding process] tilted toward one side or the other." Boeing officials "were surprised when Boeing's only rival for the contract, Northrop Grumman and EADS North America, pulled out of the competition on Monday." Northrop Grumman said the Pentagon's bidding process "favored the smaller refueling aircraft offered by Boeing, meaning the Northrop-EADS team had little chance to win the contract even if it spent millions on the competition." Boeing now remains the only bidder. Sources note "the Pentagon had been prepared for a scenario in which one of the competitors bowed out, but it is unclear how the Pentagon will proceed."
Tanker Deal Helps Boeing Domestically, May Hurt In Europe. On the front page of its business section, the New York Times (3/11, B1, Drew) reports Northrop's withdrawal may provide "Boeing with some welcome certainty about its future as a major builder of military aircraft." The company had "growing concerns about this core part of its business," as Northrop's military business division "was hit harder than any major contractor by cuts in weapons programs last year, and its efforts to create new Army combat systems and defenses against missile systems have been scaled back." But, Boeing's victory may come at the price of "angering European leaders, creating new tensions over disputes about subsidies for Airbus, which had teamed up with Northrop in the tanker bidding," even as it simultaneously shows the company has rebuilt its influence since it's first attempt to win the tankers contract "collapsed in 2004 amid corruption charges."
