Controversial US Air Force tanker deal finally awarded

25 February 2011

'Serious flaws' in tanker procurement, says Boeing
US air tanker deal angers politicians

Northrop Grumman and EADS ditch US tanker deal
Air tanker deal to be reopened

EADS North America weighs into refuelling aircraft competition

26 February 2011 | Lindsay Clark

The US AirForce has awarded a contract for the manufacture of air tankers worth $3.5 billion (£2.18 billion) to aerospace giant Boeing.

The decision follows a long saga of claim and counter-claim, as the tender became embroiled in challenges to the procurement process and political efforts to protect US interests.

Secretary of the Air Force Michael Donley said in a statement: “The thorough and transparent selection process was marked by continual dialogue with offerors [bidders] to ensure the Air Force had a clear understanding of their proposals and the companies clearly understood the service's analysis of their offers.”

The programme is expected to provide the first 18 aircraft, for mid-air refuelling, by 2017, but will eventually supply around 179 aircraft at a price of $35 billion (£21.8 billion).

This was the second tender process run for the contract. The Air Force initially awarded the contract to Northrop Grumman in March 2008, which caused anger among US politicians who demanded to know why the deal was not given to Boeing to create jobs in the country.

Boeing itself then contested the decision, claiming there were “serious flaws” in the procurement process.

Following an investigation, the US Government Accountability Office upheld the complaint, and said “a number of significant errors” had been made during the procurement that could have affected the outcome of a "close contest" between the two firms.

The contract was then scrapped, and the tender process was eventually restarted in 2009.

But in March last year, Northrop and its European partner EADS pulled out saying the selection method “clearly favoured” Boeing’s rival bid. EADS North America later rejoined the competition in 2010 with a solo bid.

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