SEATTLE — Northrop Grumman's decision to forgo bidding on the Air Force's $35 billion refueling tanker program, leaving Boeing without a competitor, might not mark the end of a nearly decade-long quest to replace the military's existing fleet, a Boeing executive said today.
"I've been working this program for nine years," Jim Albaugh, head of Boeing's commercial aircraft and former chief of its defense unit, said in a presentation at a JPMorgan Chase conference broadcast on the Web. "It's the longest-running soap opera since 'Days of Our Lives,' and I'm not sure we've seen the last episode."
Northrop, which had partnered with European Aeronautic Defence & Space in a winning bid for the tanker that was overturned in 2008, announced its decision Monday. The move made good on Northrop's December threat to withdraw unless the government altered some of its requirements.
Los Angeles-based Northrop complained at that time that the new draft proposal of bid requirements appeared to favor Boeing's entry and that the contract would impose "financial burdens." The contest had been restarted three months earlier, in September, after Boeing successfully protested the 2008 award to Northrop.
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Northrop and EADS, parent of Boeing rival Airbus, based their tanker proposal on Airbus's A330, while Boeing will use its smaller 767 as a platform.
The selection methodology outlined in the Pentagon's bid request favored Boeing's smaller aircraft and didn't recognize the added value from a larger tanker's increased capability, eliminating "any competitive opportunity," Northrop Chief Executive Officer Wes Bush said in a statement Monday.
EADS CEO Louis Gallois said today that his decision to abandon the $35 billion tanker bid is final, as some European politicians suspected local favoritism.
"I don't see any opportunity to come back alone or with others," Gallois said at a press conference in Paris. "If Northrop makes the analysis that we cannot win, I don't think we can say that we will do it alone."
The original tanker replacement concept was created in late 2001 by the Senate Appropriations Committee with a proposal to lease and then buy Boeing tankers.
Northrop's decision to quit probably will lead to a sole- source contract for Boeing, said Rep. Jo Bonner, R-Ala., where Airbus planned to build a plant if it won the project.
The tanker project's future is "really in the hands of the customer right now," Albaugh said today.