Boeing May Opt Out Of Tanker Deal

WASHINGTON (AP) -- Boeing Co. is considering bailing out of the politically-charged bidding for a $35 billion contract to build aerial refueling tankers for the Air Force, if it does not receive an additional four months by the Pentagon to put together a competitive offer.

The aerospace manufacturer said Friday it also weighing filing a protest on the final bids request -- expected to be released early next week -- which could even further delay an award by the Defense Department. No final decision will be made until Boeing has a chance to review the final bids request, said Daniel Beck, a Boeing spokesman Friday.

Boeing lost the initial contract in February to Northrop Grumman Corp. and its partner Airbus parent European Aeronautic Defense and Space Co., but the bidding is being reopened. A Boeing decision against submitting another bid could jeopardize efforts by the Pentagon to maintain a two team competition to replace 179 Eisenhower-era refueling planes.

The deal -- one of the largest in Pentagon history -- is the first of three contracts worth up to $100 billion to replace nearly 600 refueling tankers over the next 30 years.

Pentagon spokesman Chris Isleib said the department is still on track to submit its final request for bids early next week, but declined to provide any further comment due to ongoing negotiations.

Boeing claims that based on its review of the request for bids, it's clear that the Air Force is looking for a larger-sized aircraft with greater cargo capacity and better fuel offload capabilities.

"If we don't receive sufficient time to prepare a competitive proposal, there's really little option for us than to no-bid in this competition," said Beck.

The Chicago-based company contends it is not asking the Pentagon to change its requirements -- just additional time to put together a competitive offer. It declined to specify what kind of changes it would make in a new bid, but said it is considering other types of commercial aircraft.

"We think we can meet these requirements if given the time to put together a proposal," said Beck.

A spokesman for Los Angeles-based Northrop Grumman could not be immediately reached for comment.

Shares of Boeing added $1.53, or 2.4 percent, to $65.08 in morning trading, while shares of Northrop Grumman added 60 cents to $69.99.

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Cry Baby: Boeing May Opt Out Of Tanker Deal 8/22/2008 12:22:00 PM Give me the deal or I wont play. I wont play, and wont let you play. That is pathetic! Political influence at play, maybe.
Sounds like Boeing does not need the business, 4 months? 8/22/2008 12:41:00 PM I have been following this story for quite some time. If Boeing is asking for four more months to get their act together, they do not need the business very much. They could react much more quickly for a proposal on the larger air frame if they really wanted the deal. This whole thing stinks. America once again heading to out source its largest deal. I have a great idea, how about outsourcing our current elected officials and CEO's?
Apples to Oranges 8/25/2008 9:29:00 AM Certain features and carrying capacity parameters should've been frozen early on in the bidding process, so that the submitted bids would be comparable. If you requested bids for a cargo vehicle and got back bids for something that looked like a hummvee, and a crossover SUV, and a vehicle was selected with a 1 ton capacity, the SUV maker would have to do some revisions to enlarge vehicle and add structure. In addition to the cost changes, a certain amount of redesign would need to be done before you could even submit a price. I believe that principle is the reason Boeing wants an extra four months.
Correct me if I'm wrong... 8/25/2008 11:10:00 AM Wasn't it PUBLICLY known that the Airbus had greater capacity and that is why the Pentagon went with it? Boeing then lobbies for a rebid - and seems to expect that they can resubmit their original bid (Perhaps hoping for political intervention to get the old bid accepted?)
Boeing vs. Airbus 8/25/2008 3:58:00 PM Of course, Boeing is just asking to quote what the military now thinks they want. They should have set the parameters from the beginning. Sounds "_ _ _" backwards to me!!

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