The long-running battle over a $35-billion order for in-flight refuelling tankers for the United States Air Force took another dramatic twist on Wednesday night when the contract previously awarded to a consortium of Northrop Grumman and Europe’s EADS was put back up for grabs.
The US Defence Secretary Robert Gates on Wednesday night called for an ”expedited recompetition” for the contract for the 179 new aerial tankers, under the oversight of the Pentagon’s chief weapons buyer.
Defence undersecretary John Young will become the new ”source selection authority” for the programme, instead of the air force, which made the original choice.
The Pentagon is hoping that it will be able to reach a decision by the end of the year, but on Wednesday night some analysts expressed doubts that a contract as complex and politically sensitive could be decided within such a short space of time.
Until the US Air Force decision was announced earlier this year, rival bidder Boeing had been widely expected to win the deal — the first of three contracts for up to 400 tankers, with a total value of about $100-billion.
The original decision was seen as a blow to the US military’s long-standing policy of buying weapons systems made by US companies.
Though Northrop Grumman is one of America’s leading defence companies and said it would assemble and modify its tanker in the US, its offering is based on EADS’ Airbus A330. The Boeing tanker is based on that company’s 767 aircraft.
The decision came after the US Air Force’s handling of the original competition was criticised by the government accountability office in Washington, following a protest filed by Boeing.
The air force has been seeking a replacement for its existing tanker fleet for several years. Initially it struck a lease deal with Boeing for 100 aircraft, but that contract was cancelled after coming under fierce scrutiny in Congress — led by Senator John McCain, now the Republican presidential candidate.
The decision to reopen the bidding for the air tanker will give an extra edge to the already fierce competition between Boeing and Airbus in the commercial aircraft market.
Both will be out in force at the Farnborough airshow next week, with Airbus already tipped to announce an order from Qatar. Boeing is likewise believed to have orders up its sleeve to announce at the show, which is taking place against a tough background for the airline industry.
On Wednesday Boeing said it had seen order deferrals in the US on civil aircraft this year as the airline industry battles challenges such as high fuel costs.
Randy Tinseth, Boeing Commercial Airplanes vice-president for marketing, said the issue was limited to the US market — which accounts for 10% to 11% of its sales. ”We have seen deferrals in the US market as the airlines look to make significant capacity reductions.” – guardian.co.uk