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Air Force launches bidding contest vs. Boeing

WASHINGTON -- The Air Force launched a new competition Wednesday for a $35 billion contract to start replacing the nation's aged fleet of aerial tankers, but whether Northrop Grumman and its European partner will follow through on a threat not to bid against Boeing was unclear.

Outcome of the bidding could mean thousands of jobs in Washington state.

Apparently there were few major changes from an earlier version of the request for proposals that had drawn sharp criticism from the Northrop Grumman -- European Aeronautic Defense and Space Co. (EADS) team and its supporters on Capitol Hill.

Northrop officials had said unless significant changes were made, it wouldn't bid.

If it doesn't bid, the Air Force could award a sole source contract to Boeing.

"What today's release means is they most likely will not bid," said Loren Thompson, a defense analyst for the Lexington Institute, a national security think tank.

Northrop-EADS officials offered no indication what they were planning.

"Northrop Grumman will analyze the request for proposals and defer further public comment until its review of the document has been completed," said Randy Belote, a company spokesman.

Pentagon officials said they were "playing it right down the middle" and were satisfied the competition wouldn't favor either side.

Deputy Defense Secretary William Lynn said the focus is on a competition with multiple bidders.

"Obviously Northrop Grumman and its European partner have a choice to make," said Lynn. "We think it is in their interest to bid."

Boeing had little to say, except that it was reviewing the voluminous document.

On Capitol Hill, Boeing supporters were satisfied with the rules for the competition.

"It is fair and balanced," Sen. Patty Murray, D-Wash., said following a briefing.

Northrop-EADS backers were not hopeful.

"They didn't calm my concerns," said Rep. Mike Rogers, R-Ala.

Bids are due in 75 days and the Air Force plans to awarding the contract in mid-September. Either side could challenge the provisions of the request for bids, but Air Force officials said such an appeal wouldn't delay the competition.

While the initial contract is for 179 new tankers, the deal could eventually be worth $100 billion as the Air Force replaces its fleet of about 600 Cold War-era tankers. It could be one of the largest Pentagon purchases ever.

So far, the competition has been marked by a major Pentagon procurement scandal, political intrigue and fueled by an intense rivalry between two of the world's major aerospace companies -- Boeing and Airbus. EADS is the parent company of Airbus.

Boeing is expected to offer a tanker based on a 767 airframe, which are built at its Everett plant and modified for military use at company facilities in Wichita, Kan. At stake are about 9,000 jobs in Washington state and 1,000 or so in Kansas.

Sen. Maria Cantwell, D-Wash., said she has received assurances from top Boeing officials that the 767s will continue to be built in Everett and not at a new plant planned in Columbia, S.C.

Northrop-EADS would use an Airbus A-330 airframe. The initial tankers would be built at the Airbus factory in Toulouse, France. The companies have promised to build a new facility in Mobile, Ala., but several years after announcing it have yet to begin construction.

Rep. Rick Larsen, D-Lake Stevens, whose district includes Boeing's Everett plant, said he hoped the request for bids would lead to an "equitable and open tanker competition and ensure mistakes of the past are not repeated."

Gov. Chris Gregoire said she was "confident that Boeing, with its experienced work force and capacity to build the tanker immediately, will compete effectively and ultimately, win the order."

-- Les Blumenthal: 202-383-0008; lblumenthal@mcclatchydc.com

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