EADS submits tanker bid

EADS North America submitted two copies of its 8,800-page proposal Thursday — the day before bids are due — for a $35 billion U.S. Air Force contract to replace its aging fleet of aerial refuelers.

Boeing plans to deliver its bid to the Air Force at 8 a.m. today, a spokesman said.

It's been a fierce, long-running battle marked by controversy and accusations of unfair competition.

The Air Force is expected to make its decision in November — the third time it will decide on a tanker contract.

"This is a big day for us," EADS North America chairman Ralph Crosby said during a conference call Thursday. "We feel very good about what we have to offer."

The company put forth an intensive effort to submit a proposal that Crosby said meets all of the Air Force's requirements.

"There are a lot of weary-looking folks around here," Crosby said.

European Aeronautic Defence and Space Co. officials said the company will move forward as if it has won the contract for 179 tankers.

On Monday, it will send a tanker management team to Mobile, Ala., where Airbus tankers would be assembled should it win.

The EADS tankers would be based on the Airbus A330 commercial airliner. The Boeing tanker would be based on its commercial 767 jetliner.

An EADS win would create 48,000 U.S. jobs, while a Boeing win would create 50,000 U.S. jobs, the companies say.

In a surprise announcement, a third company, Santa Fe Springs, Calif.-based U.S. Aerospace, said this week that it plans to make a last-minute bid for the tanker contract in a partnership with Ukranian aircraft manufacturer Antonov.

The airframes would be built in Ukraine by Antonov, with final assembly at a new facility in the U.S.

The companies plan to bid on three models for the tanker — the AN-124-KC; AN-122-KC, a twin-engine variant of the AN-124-100 with advanced engines, electronics and avionics; and AN-112-KC, an updated airframe designed specifically to meet the tanker program requirements, according to information from U.S. Aerospace.

The deadline for bids comes shortly after a World Trade Organization panel found that Airbus had received illegal subsidies — loans with below-market interest rates — to build its airliners.

It ruled that launching Airbus' A330-200 would have had significantly higher costs without the subsidies.

The WTO must still rule on a countersuit accusing Boeing of benefiting from subsidies.

On Thursday, the WTO said that an interim ruling in the case expected this month would be delayed until September.

Boeing and EADS officials agree that this tanker competition is different than the one two years ago, in which the award was given to a Northrop Grumman-Airbus team. It was overturned after the U.S. Government Accountability Office found the offers were judged incorrectly.

Northrop Grumman withdrew from the latest competition. EADS decided to move forward on its own.

"This is a different chapter," EADS North America CEO Sean O'Keefe said. "It has a different feel to it. This is not Groundhog Day."

Instead of seeking a broad range of capabilities, the Air Force is looking for a replacement for the current fleet of KC-135 refuelers.

In 2003, Boeing won the contract for tankers, but lost it because of a conflict of interest when a Department of Defense acquisition manager accepted a job with Boeing. The government official and a Boeing executive went to jail.

In the current competition, the rules are clearly spelled out, the companies say.

The successful bidder must meet all of the Air Force's 372 requirements, said Boeing spokesman William Barksdale.

"You can't move along in the competition with 371," Barksdale said. "That really forces industry to come up with a new tanker, a new proposal."