Boeing gains as US cancels $35 billion tanker bid

10 September 2008

Mumbai: Boeing has won the fight against competition after US defence secretary Robert Gates canceled a $35 billion air tanker bid that pitted Northrop Grumman Corp and Boeing Co, saying the contest had become too emotional and complex to be decided before the Bush administration leaves office in January.

In February, Northrop Grumman Corp and its European partner Airbus won the bid that involves replacing the more than 500 Eisenhower-age airborne tankers.

But, in July, the successful bidders were forced to give up the contract after rival Boeing Co filed a successful protest with the Government Accountability Office and the bid was reopened. Boeing, however, sought six additional months to prepare a revised bid.

Boeing had originally offered to convert a 767 into a refuelling tanker that the Air Force deemed too small.

The Pentagon's cancellation of the bid for building the next-generation aerial-refueling planes places the defence procurement now under a new president.

The next administration will have full flexibility regarding the requirements, evaluation criteria and budget decisions involved in the competition, the Pentagon said in a statement.