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Northrop: Boeing Given 'Unfair' Edge In Tanker Contract

Tue, 09/29/2009 - 12:21pm
Donna Borak, AP Business Writer

WASHINGTON (AP) — The Pentagon has given Boeing Co. an "unfair" advantage in the latest competition for a troubled $35 billion tanker contract, a Northrop Grumman Corp. executive said Tuesday.

The Pentagon shared Northrop's pricing data from its previous bid with Chicago-based Boeing, but did not reveal Boeing's cost estimates to Northrop.

"It is fundamentally unfair, and distorts any new competition, to provide such critical information to only one of the bidders," Paul Meyer, a Northrop Grumman vice president, said in a statement. "The company will continue to work with its customer to fully resolve this issue."

Los Angeles-based Northrop and partner Airbus parent European Aeronautic Defense and Space Co. N.V. are competing against Boeing for the third time to replace the aging refueling tankers.

The Pentagon's chief weapons buyer, Ashton Carter, told reporters last week the department found "no competitive disadvantage" following its examination of Northrop's claim. Carter said the information in question was inaccurate, outdated or not relevant to the new competition.

The Pentagon declined further comment Tuesday.

"The Air Force clearly and definitively dealt with this issue and we look forward to our first meeting with them in this competition," Boeing spokesman Bill Barksdale said in a statement.

The Air Force has failed twice to award a contract to replace its Eisenhower-era fleet of 179 tankers. Northrop won the deal in February 2008. Boeing later successfully protested the award after congressional investigators found the Air Force failed to evaluate both proposals on the same merits.

The 2004 award to Boeing was undone by an ethics scandal that resulted in prison terms for a former company executive and a former Air Force official.

The service has said it will be "crystal clear" in its requirements for new tankers that refuel military planes in flight in order to avoid errors from previous selection processes.

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