EADS North America weighs into refuelling aircraft competition

9 July 2010

9 July 2010 | Lindsay Clark

EADS North America has submitted its bid in the controversial multibillion-dollar US Air Force aerial refuelling tanker competition, a day ahead of today’s deadline.

The bid follows a procurement process in which US defence supplier Northrop Grumman and EADS, who were submitting a joint bid, pulled out of the $35 billion (£23 billion) competition. In a statement in March, the companies said that the US Department of Defense deal for 179 refuelling planes “clearly favours” a rival bid from Boeing.

Northrop’s chief executive Wes Bush said then the firms would not contest the deal, despite claiming “substantial grounds” to overturn the procurement process.

EADS North America has now submitted a proposal which it is says details the unequalled capabilities of the proposed aircraft, EADS KC-45.

“We’re proud of our offering, which is the only one in this competition that is flying and refuelling the full array of receiver aircraft,” said EADS North America chairman Ralph Crosby.

The KC-45, based on the commercially successful A330, would be assembled in a new manufacturing facility to be built in Mobile, Alabama, which would also produce Airbus commercial freight aircraft, more than doubling the aircraft production that the refuelling tanker alone would bring. The tanker can refuel a wide range of aircraft, including F-16 and FA-18 fighters, E-3 AWACS and other A330 tankers.

The bid comes at a time when the US military is attempting to save $100 billion (£66 billion) through improved procurement.

Ashton Carter, under-secretary of defence for acquisition, technology and logistics, said the Department of Defense must find and eliminate unproductive overheads and transfer the savings to fighting capabilities. This meant “doing more without more”, he said.

During the speech last month, Carter outlined the steps the department is taking to make efficiencies that will save $100 billion over five years from fiscal 2012. The Department of Defense must have no more than 2-3 per cent annual growth, according to President Obama’s budget proposal.

The US defence budget is more than $700 billion (£460 billion) but the focus of efficiency savings is on the $400 billion (£260 billion) that is spent on goods and services.

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