Tanker Manufacturers to Air Force: Later, Haters

European defense and aerospace consortium EADS and its U.S. partner, Northrop Grumman, have handed an apparent $35 billion dollar gift to rival Boeing -- by packing up and going home.

In late February, the Air Force launched a contest to replace its fleet of Eisenhower-era KC-135 aerial refueling tankers. The Air Force envisioned spending $11.7 billion on the new planes over the next five years; over the life of the program, the service plans to buy a total of 179 aircraft, orders worth a potential $35 billion.

But Northrop and EADS complained that the guidelines weighed the contest in Boeing's favor, and threatened to pull out of the contest unless the service revised the request for bids. And that's exactly what happened today. EADS North America released the following statement from Ralph Crosby, Chairman of the Board:

Five years ago EADS partnered with Northrop Grumman, as prime, to pursue the U.S. Air Force KC-135 modernization program. Two years ago our team was selected and awarded the contract. Today Northrop Grumman has decided not to submit a bid to the Department of Defense for the KC-X program.

As a team, our serious concerns were expressed to the Department of Defense and the U.S. Air Force that the acquisition methodology outlined in the request for proposal (RFP) would heavily weigh the competition in favor of the smaller, less capable Boeing tanker. Northrop Grumman's analysis of the RFP reaffirmed those concerns and prompted the decision not to bid.

*The source selection methodology clearly signals a preference for a smaller aircraft.
*

The Air Force has been trying to buy a new tanker for around nine years. And now it looks like it may go to Boeing. And here's the irony: Back in 2004, Republican Senator John McCain successfully helped block a tanker lease arrangement that he saw as a sweetheart deal for Boeing. (Of course, I was secretly convinced that the nearly decade-long Air Force tanker saga was really a scheme to keep people in the defense trade press gainfully employed.)

Politico's Jen DiMascio has an awesome quote from Rep. Jo Bonner, the Republican who represents the Alabama political district where the Northrop/EADS team would have built the tankers if it had won.

“I wrote President [Barack] Obama last month and warned him the Pentagon was headed down a path that would kill the chance of competition in the tanker program," Bonner said. "Apparently the Pentagon didn’t get the word and has handed the president a $35 billion sole-source hot-potato, under circumstances that are highly suspect.”

[PHOTO: U.S. Department of Defense]