- The Washington Times - Tuesday, March 11, 2008

ASSOCIATED PRESS

Boeing Co. yesterday said it will formally protest a $35 billion Air Force contract awarded to European Aeronautic Defence and Space Co. (EADS) and Northrop Grumman.

Boeing Chief Executive Jim McNerney, said the Chicago aerospace company “found serious flaws in the process that we believe warrant appeal.”

The award to replace 179 refueling tankers is the first of three major Air Force contracts to replace its entire fleet of nearly 600 aging tankers and could be worth $100 billion over the next 30 years.

Boeing, which was debriefed by Air Force officials Friday about why EADS and Northrop Grumman won the high-stakes deal, said yesterday that it had “serious concerns” about the fairness of the competition, citing “inconsistency in requirements, cost factors and treatment of our commercial data.”

“This is an extraordinary step rarely taken by our company, and one we take very seriously,” Mr. McNerney said.

Boeing hinted at the basis for its protest, saying that the Air Force changed its method for evaluating the two tankers even after issuing a request for proposals. These changes allowed a larger tanker to be competitive even though the Air Force originally had called for a medium-sized plane, Boeing said. Air Force officials have indicated that the larger size of the EADS/Northrop won the day.

Sen. Patty Murray, a Washington Democrat who represents a state that is home to many Boeing jobs, continued to criticize the Air Force“s decision after Boeing announced its plans to protest the deal.

“The Air Force“s shortsighted decision to place the future of America”s aerospace industry and national security in the hands of an illegally subsidized foreign competitor is simply wrong for America,” Mrs. Murray said.

After Boeing files its protest, the Government Accountability Office will have 100 days to issue a ruling. A protest could delay execution of the tanker contract by nearly a year, said Loren Thompson, a defense analyst with the Lexington Institute, a think tank.