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Boeing Dropping Out Of Tanker Battle?

By Reuters

Boeing is "strongly considering" not bidding on the $40 billion tanker contract. Some of its backers in Congress argue the revised terms of the competition, issued by the Pentagon last week, favor Northrop Grumman Corp and EADS. Boeing Dropping Out Of Tanker Battle?

Published: Mon, August 11, 2008 - 11:09 am

NEW YORK (Reuters) - Boeing Co is "strongly considering" not bidding on the upcoming competition for a $40 billion U.S. Air Force refueling tanker contract, Aviation Week, the aerospace industry magazine, reported on Monday, without identifying its sources.

The No. 2 Pentagon contractor has not commented on the issue publicly, but some of its backers in Congress have argued that the revised terms of the competition, issued by the Pentagon last week, favor Northrop Grumman Corp and its European partner EADS.

Boeing officials are "strongly considering the option of not submitting a proposal," according to the report on the magazine's website, citing "multiple sources familiar with Boeing's internal discussions."

Boeing declined comment on the report, saying that it had responded to the initial request for proposal and was set to meet Pentagon official on Tuesday to discuss it. Any decision on the competition before that would be "premature", said Boeing spokesman Dan Beck.

The company's shares were down 1.8 percent at $66.61 on the New York Stock Exchange.

The Pentagon last week reopened the tanker contract contest with a draft version of its requirements, and will spend the next week or so discussing the criteria with bidders. A final request for proposal is expected in mid-August, with a deadline of Oct. 1 for submission of bids.

The prospect of having only one bidder for the contract would be embarrassing for the Air Force and the Pentagon, which have gone out of their way to demonstrate that the competition is open and fair.

The Northrop/EADS team won the contest in February, but government auditors subsequently found errors in the way the competition was run. Prior to the competition, the Northrop/EADS team also vacillated about entering the competition, raising questions about fairness.

Last week, Boeing backers bristled at the terms and timetable of the Pentagon's new tanker competition.

The new criteria "appear to favor a tanker larger than any real-world scenarios would require", said Rep. Norm Dicks, a Washington state Democrat and Boeing backer last week, implying that it would favor the larger plane offered by Northrop/EADS.

Sen. Patty Murray, another Washington state Democrat, said the new documents raised some "red flags," and the timetable for new submissions was "simply unrealistic."

Boeing, which has traditionally built tankers for the U.S. Air Force, had a deal to supply a new fleet of tankers but the arrangement was scrapped in 2004 after it came to light that Boeing offered a job to a top Air Force procurement officer.

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rosepetal Says:

Tue, Aug 12, 2008 at 1:01 pm

michaelc, the link you requested

http://www.latimes.com/news/opinion/la-oew-horner23-2008jul23,0,1351025.story

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BamaBob Says:

Tue, Aug 12, 2008 at 11:06 am

These Boeing people want an RFP that says the AF needs an aircraft the exact size and dimension of the 767 and anything that could do a better job for less money would be automatically rejected.

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BamaBob Says:

Tue, Aug 12, 2008 at 11:01 am

You just want the AF to reject the better plane and give the contract to Boeing. Problem is the AF has clarified the original RFP per instructions given by the GAO and now it even better defines the KC-45 as the right choice.

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Tide Fan Says:

Tue, Aug 12, 2008 at 11:00 am

If there is any truth to this article (rumor)..it is obvious Boeing is acting like a spoiled brat. They cant outright win the contract..so instead, they get some politicians to stir up the pot and cry foul….whine..whine…whine….I didnt get my way so im mad…If you cant make the rules in my favor..then I dont want to play anymore…

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michaelc Says:

Tue, Aug 12, 2008 at 10:51 am

TALK ABOUT BIAS!

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BamaBob Says:

Tue, Aug 12, 2008 at 10:44 am

“The Northrop Grumman plane was judged the best equipment in round one—I have every confidence it will remain the top choice after the GAO procedural concerns are resolved. It is simply a more modern, more capable aircraft that can be delivered to our military sooner. I am confident an expedited re-competition will reaffirm this decision.
. http://www.wkrg.com/mobilesmakeover/article/bonner_pleased_gates_is_taking_over_tanker/15764/

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michaelc Says:

Tue, Aug 12, 2008 at 10:35 am

Whoops! Wrong link!! Corrected source below:

Source: http://www.scribd.com/doc/3619962/Full-Redacted-GAO-Tanker-Decision

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michaelc Says:

Tue, Aug 12, 2008 at 10:31 am

“The KC-45 aircraft won based upon merits!”

What are you basing this statement on? The Air Force award? This is quote straight from the GAO redacted report:

“Here, we find, as described above, a number of errors in the Air Force’s conduct of this procurement, including the failure to evaluate proposals in accordance with the RFP criteria and requirements and to conduct discussions in a fair and equal manner. But for these errors, we believe that Boeing would have had a substantial chance of being selected for award. Accordingly, we sustain Boeing’s protest of the Air Force’s award of a contract to Northrop Grumman for the aerial refueling tankers.
The protest”

Note is says that if not for the errors ,Boeing had a “SUBSTANTIAL” chance of being awarded the contract.

Source: http://www.wkrg.com/mobilesmakeover/article/boeing_dropping_out_of_tanker_battle/16775/

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michaelc Says:

Tue, Aug 12, 2008 at 9:49 am

You people really DO live in your own little world don’t you!

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BamaBob Says:

Tue, Aug 12, 2008 at 9:41 am

The AF tried to tell Boeing they did not want that old piece of #### 767, but Boeing kept trying to shove it down their throats! Is the AF supposed to just bend over and take that sort of treatment, because it is coming from Boeing?
. That would be like me or you getting a contractor to put up a privacy fence and then being told we would get chain-link instead, because the contractor had a bunch of old fence fabric in his warehouse. Would we except that, or would we tell them to shove that chain-link fence up their wazoo?

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