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Will Boeing Stay In $35B Tanker Fight?

Aerospace manufacturer's is considering exiting the highly contentious Air Force deal if it doesn't receive an additional four months from the Pentagon to prepare its offer.

WASHINGTON (AP) -- Is Boeing on its way out of the Pentagon's $35 billion tanker competition?

That's the question on the minds of analysts following the aerospace manufacturer's notice last week that it is considering exiting the highly contentious Air Force deal, if it doesn't receive an additional four months from the Pentagon to prepare its offer.

The final request for bids is expected to be released Tuesday by the Pentagon -- which will make clear whether or not Boeing Co. will get its wish for an extension.

Under the Pentagon's current plan, both competitors are expected to respond to the bids request by Oct. 1, with a final contract award by the end of the year.

A decision by Boeing to refuse to bid could potentially hand off the deal to rival Northrop Grumman Corp. and its partner Airbus parent European Aeronautic Defense and Space Co., which initially won the contract in February. Such a move would jeopardize the Pentagon's efforts to maintain a two-team competition to replace 179 Eisenhower-era refueling planes -- and spur a backlash among lawmakers from Washington, Kansas and other states that stand to gain jobs if Boeing succeeds in landing the award.

Chicago-based Boeing has also hinted that it may file a protest on the final bids request, which could cause further delays. The company has said it will wait to review the final request before making a decision.

Boeing filed a protest with the Government Accountability in March, a month after it lost the initial deal to Northrop Grumman and its European partner. The competition was later reopened after government auditors found "significant errors" in the Air Force's decision. The revamped competition -- overseen by Pentagon acquisition chief John Young -- will focus on eight areas where the GAO found problems during the initial process.

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.

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