Pentagon contract for tanker tops $30 billion

Pact for midair refueling plane awarded to Boeing

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The Pentagon on Thursday awarded a more than $30 billion contract for its next midair refueling tanker to aerospace giant Boeing, seeking to conclude almost a decade of efforts to buy the new plane and sparking protests from supporters of Boeing’s defeated European rival.

Boeing was the better offer,” Deputy Defense Secretary William Lynn told reporters, adding that the refueling tanker program would deliver the first 18 of 179 total aircraft by 2017.

The deal, the Air Force’s third effort to award the contract, caps nine years of wrangling over a replacement for the service’s aging fleet of KC-135 tankers. The Eisenhower-era flying gas stations have served as the backbone of the U.S. capability for “force projection” — the ability to strike anywhere in the world.

Government auditors overturned a February 2008 award to the rival bidder — the European Aeronautic Defense and Space Co. (EADS), the parent company of Airbus — after ruling that Boeing had been treated unfairly in the selection process.

Representatives of EADS “told me they were going to protest if they lost, but we’ll have to wait and see what happens,” said Barry Watts, senior fellow at the Center for Strategic and Budgetary Assessment, a nonpartisan defense think tank in Washington, D.C.

Secretary of the Air Force Michael Donley (left) and Deputy Defense Secretary William Lynn announce the KC-46A tanker contract award to Boeing Co. during a news conference at the Pentagon in Washington on Thursday. (Associated Press)

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Secretary of the Air Force Michael Donley (left) and Deputy Defense Secretary ... more >

A formal protest of the decision would stop work on the contract, at least temporarily.

Mr. Lynn noted that “the unsuccessful [bidder] has the right to protest,” but he added that he hoped all parties would “respect this procurement and allow the purchase of the tanker to go ahead.”

“The war fighter deserves no less,” he said.

Mr. Watts said Air Force officials had “spent a lot of time and energy and involved a lot of lawyers trying to make this [award] protest-proof.”

EADS has 10 days to file a protest with the Government Accountability Office, and defense officials were expected to brief both companies on the award decision next week.

Mr. Lynn said officials had made the process as transparent and fair as possible. “We have done exactly what we said we were going to do and we’ve done it right,” he said.

Supporters say the EADS proposal, based on its Airbus 330 airframe, is larger, carries more fuel and can fly farther, making it a better bet for the Air Force. Boeing supporters say that a larger, heavier plane will cost more to produce and operate in the long run as aviation fuel prices rise.

Sen. Patty Murray, Washington Democrat, welcomed the news as a victory for Chicago-based Boeing and for her state, where much of the new tanker will likely be built.

“Today’s long-awaited decision by the Pentagon is the right one for our military, our taxpayers and our nation’s aerospace workers,” she said. “At a time when our economy is hurting and good-paying aerospace jobs are critical to our recovery, this decision is great news.”

Mr. Watts said it had been “painful” to watch the 9½-year process, which began with a false start when an effort to lease tankers from Boeing collapsed amid allegations of corruption. Then came the 2008 award to EADS and Boeing’s protest. The succession of missteps was capped last year, when Air Force officials accidentally sent each firm confidential details about the other’s bid.

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