Controversy Continues Over Air Force Contract

The U.S. Air Force surprised many observers on Feb. 29 by awarding one of the largest procurement contracts in history to Northrop Grumman over its favored rival Boeing. The $40 billion award is for the development and production of 179 aerial refueling KC-45 aircraft. Follow-on production orders are likely to replace additional segments of the refueling fleet, making the overall project worth upward of $100 billion.
However, the contract has aroused considerable political controversy in Washington, since the European Aeronautic Defense and Space Co. (EADS) served as Northrop’s junior partner in the joint bid. Politics, not military requirements, will now determine the fate of the award.

GAO denies move to dismiss Boeing protest of Northrop Grumman contract award

The Government Accountability Office has denied motions filed by Northrop Grumman Corp. and the Air Force to toss key portions of Boeing’s protest of a $35 billion contract, Northrop Grumman said late Wednesday.
The GAO, which has until June to rule on the Boeing Co. protest, would not comment. And Air Force officials could not be reached immediately for comment.
Boeing filed a formal protest of the air tanker refueling contract with the GAO on March 11. In late February, Air Force officials awarded the contract, essentially for gas stations in the sky, to Northrop Grumman and European Aeronautic Defence and Space Co., parent of Boeing rival Airbus. The job of building 179 aerial refueling tankers is the first of three Air Force contracts worth as much as $100 billion over 30 years to replace its fleet of nearly 600 tankers.

Air Force counterattacks Boeing protest against US$35B aircraft agreement

Five issues raised by Boeing Co. in a protest against a US$35-billion aircraft deal should be thrown out because they were improper or should have been raised before final bids were submitted, the U.S. Air Force said in legal documents obtained by Reuters yesterday. The Air Force awarded the contract for 179 aerial refueling aircraft to Northrop Grumman Corp. and Airbus parent EADS on Feb. 29. Losing bidder Boeing filed a protest with the Government Accountability Office on March 11. Boeing said the Air Force changed its requirements and the way it evaluated the competing bids in a way that favoured the larger Northrop-Airbus aircraft. The Air Force decision also triggered howls of protests from Boeing supporters in Congress concerned the deal could shift business and jobs to Europe’s Airbus, Boeing’s chief rival for building commercial airplanes.

EADS-led AirTanker consortium signs 27 year air refuelling contract with the U.K. Ministry of Defence

EADS is to become RAF’s leading supplier of military transport aircraft
AirTanker aircraft will be more than 50 per cent British by value
The Airbus A330-200 has now won each of the last five military tanker contracts internationally demonstrating its superior capability, flexibility and economics
EADS is undertaking further investment and growth of its UK defence business
World’s largest ever Defence Private Financing Initiative (“PFI”), worth approx ?13 billion (€16.7 billion) over 27 years
AirTanker, the EADS-led consortium, has today signed a 27 year contract with the UK Ministry of Defence

Boeing: Getting Beyond The Turbulence

There’s no doubt that March has been a turbulent month for Boeing–the company recently filed a formal protest of the award of a $35 billion contract for air force refueling planes to a team headed by Northrop Grumman and the European Aeronautic Defence and Space Co.

Then the leasing company that’s the largest customer for Boeing’s 787 Dreamliner gave word that structural changes to where the plane’s wings attach to the fuselage would further delay the 787’s first flight by three to six months.

In the past 30 days, Boeing shares have slid 8.13% vs. a flat S&P 500.

Boeing faces questions after tanker loss

Boeing Co — and its shareholders — will be looking for answers this week as to how the plane maker and defense giant managed to lose a $35 billion tanker contract to smaller and less experienced Northrop Grumman Corp.

The loss won’t seriously hurt Boeing’s finances, but it does dent its revenue growth plans and is an embarrassing blow for a company that touted itself as the only serious option for building the U.S. Air Force’s refueling fleet.

The setback comes on top of costly delays to the 787 Dreamliner jet, which have dragged down Boeing’s stock by more than 20 percent since last summer, and mis-steps on other defense contracts.

Tanker deal loss staggers Boeing; Airbus-based jet wins $35 billion contract

In a shocking move, the U.S. Air Force awarded a $35 billion contract to replace its aging fleet of aerial tankers to a consortium led by a France-based defense contractor rather than Boeing Co.
The Air Force decision is a stinging blow to Chicago-based Boeing, which had built most of the tankers in the Air Force fleet and was widely considered the front-runner for the contract, among the three largest ever awarded by the Pentagon.
Boeing had won an earlier version of the contest, only to be stripped of its prize amid an ethics scandal when the Air Force purchasing official who had overseen that process wound up on Boeing’s payroll.
That sordid episode played no role in the decision announced Friday, Pentagon officials insisted.
Rather, they were wowed by the newer and larger airplane,

Northrop Grumman, EADS beat out Boeing for Air Force tanker contract

The U.S. Air Force awarded Northrop Grumman Corp. and a European partner a US$35 billion contract on Friday to build airborne refuelling planes, delivering a major blow to Boeing Co.

The selection of Los Angeles-based Northrop Grumman and European Aeronautic Defence and Space Co., the maker of Airbus planes, surprised industry and elected officials. Air Force officials said the larger size of the Northrop-EADS aircraft helped tip the balance in its favour.

Chicago-based Boeing, which has been supplying refuelling tankers to the Air Force for nearly 50 years and had been widely expected to hang onto that monopoly, could protest the decision, though the company said no decision has been made.

Boeing fails to land airplane contract

The United States Air Force decided Friday which aerospace company will build the military’s next refueling airplane — and the contract winner was not the one many expected.

Northrop Grumman and its partner, Airbus maker European Aeronautic Defence beat out Boeing Co. for the $40 billion contract to build 179 tankers for the military.

Many analysts predicted Boeing would win the KC-X competition — and build the plane that will eventually replace the KC-135.

Retired Lt. Gen. Dick Burpee said though Boeing has a long history with the Air Force and refueling tankers — the Chicago-based aerospace company built the KC-135 more than 50 years ago

Boeing snubbed on massive air tanker project

Rockwell Collins will receive fewer orders than it had hoped for the next generation of U.S. Air Force refueling tankers.

The Pentagon announced Friday that it had selected Northrop Grumman’s KC-30 tanker bid to replace its aging fleet of aerial refueling tankers, a contract worth about $35 billion.

Rockwell Collins, which produces aviation electronics, is a supplier to Northrop Grumman, but does not have as much content under the Northrop Grumman program as it had under a rival bid by Boeing Aerospace.

“We are disappointed in the decision,” Rockwell Collins spokeswoman Pam Tvrdy said. “We were really

Boeing loses tanker to Northrop Grumman-EADS team

Boeing Co. was passed over today in the battle for a multibillion-dollar aerial tanker contract, the Air Force said.

The Department of Defense selected a bid from the team of Northrop Grumman and EADS, the parent company of Airbus, over Boeing to provide the Air Force with a new fleet of refueling tankers.

Boeing’s Wichita facility would have housed a finishing center to assemble and test the tankers. That was expected to create 300 to 500 jobs. The contract also was expected create another 500 jobs with local suppliers, including Spirit AeroSystems.

Boeing plaintiffs lose again

After more than 10 years of litigation, a lawsuit alleging that The Boeing Co. discriminated against some employees because of their race could be near its end.

On Wednesday, a panel of appellate judges denied the plaintiffs’ appeal of a lower court judge’s decision to dismiss claims that Boeing discriminated in its pay.

Arizona ‘Virtual Fence’ Gets Final OK

A 28-mile “virtual fence” that will use radars and surveillance cameras to try to catch people entering the country illegally has gotten final government approval.

Homeland Security Secretary Michael Chertoff on Friday was to announce approval of the fence, built by the Boeing Co. and using technology the Bush administration plans to extend to other areas of the Arizona border, as well as sections of Texas. These projects could get under way as early as this summer, officials said.