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Tue, Feb 26, 2008

USAF Tanker Decision 'Over,' But No Word Yet On Winner

Announcement May Come Tuesday

"It's over." That's how one defense official summed up Monday's meeting of decision makers at the Pentagon, on whether a contract to supply the service with 179 new aerial refueling tankers would go to Boeing or a partnership between Northrop Grumman and EADS.

Reuters reports that source, and one another, confirmed the Defense Acquisition Board meeting took place, and a decision was reached... but official word was likely to come Tuesday or perhaps later, to give the Pentagon time to notify the respective companies, and key lawmakers.

Aero-News has reported on the ongoing KC-X competition for several years. Boeing was initially awarded a controversial $23.5 billion lease plan to supply tankers based on the planemaker's 767 commercial airliner in 2003... but the decision was subsequently shot down by Congress, after conflict-of-interest issues involving former Air Force official Darleen Druyun came to light. An internal Boeing investigation found that, while Druyun was still at the Pentagon, she was approached by a Boeing executive with an offer to join the company... while she was in charge of the Air Force's contracts with Boeing.

Forced to rebid for a contract it already won once, Boeing stuck with a variant of the KC-767 being built for Japan and Italy. The Northrop/EADS team submitted a version of the KC-330 Multi-Role Tanker Transport (MRTT.) Like the KC-767, the KC-30 is heavily based on a commercial airliner -- in this case, the Airbus A330. Just as that aircraft is slightly larger than a 767, so goes the MRTT -- which, depending on which team is doing the talking, is either its blessing or its curse.

Boeing calls the KC-767 'right-sized' for the terms of the Air Force contract, and notes the KC-30 takes up more ramp space, burns more fuel, and costs more to buy. Northrop counters the Air Force would get more for its money in the KC-30, as the aircraft could fulfill a variety of transport roles, in addition to its tankering duties. Northrop also notes Boeing's head start in developing a KC-X entrant hasn't proven to be much of an advantage, as the planemaker only recently delivered its first KC-767 to Japan, after a number of delays in the program.

If selected, Northrop has promised to build the KC-30 in Alabama, contributing to some 26,000 jobs; Boeing will build the KC-767 in Everett, WA, with tanker components added in Wichita -- in support of 44,000 jobs.

Several analysts have gone on record stating the KC-X deal is Boeing's to lose, but Northrop has maintained it had a better than fighting chance... and like Boeing, the company has courted public officials, and public opinion, to support the KC-30.

An announcement on whether Boeing or Airbus won will likely come after the close of US markets on the day the Pentagon formally signs the "acquisition decision memorandum" approving the start of development of the program, one source told Reuters.

FMI: www.af.mil, www.globaltanker.com, www.boeing.com, www.eadsnorthamerica.com, www.northropgrumman.com/kc30/

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