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Pentagon extends tanker plane contract deadline by 60 days

Text by News Wires

Latest update : 2010-04-01

The Pentagon has said it will extend the deadline for bidding on a major contract for a new US aerial refuelling tanker if it receives formal notification that European aerospace manufacturer EADS intended to make an offer.

AFP - The Pentagon announced Wednesday it will extend the deadline for bidding on a contract for a new US aerial refueling tanker, allowing more time for European aerospace giant EADS to bid on the lucrative deal.
"If we receive formal notification from EADS of their intention to make an offer, we will extend the deadlines for bids from May 10 to July 9," providing an additional 60 days to both EADS and its US rival, Boeing, Pentagon spokesman Geoff Morrell told a press conference.
Airbus's parent company, EADS, had asked for a 90-day extension after its US partner Northrop Grumman had dropped out of the high-stakes contest.
EADS acknowledged the Pentagon decision but did not say if it would return to the competition.
"We have firmly indicated that a 90 day extension would be the minimum time necessary to prepare a responsible proposal" for the contract, said Guy Hicks, spokesman for EADS North America.
"We will consider the department’s decision to offer a 60 day extension," he said in a statement.
EADS had said earlier it would decide in two to three weeks whether to compete.
Despite postponing the deadline for proposals, the Pentagon still expected to issue a final award for the 35-billion-dollar contract by "early fall" as previously planned, Morrell said.
Defense officials hoped to adhere "pretty closely" to the original schedule by scaling back the time set aside for evaluating proposals, he said.
The 60-day extension was a "reasonable" period that balanced EADS' needs "against our desire to move on with this as quickly as possible," he said.
During a visit by French President Nicolas Sarkozy this week, President Barack Obama said the competition for the new fleet of tanker planes would be "free and fair."
Sarkozy said he trusted Obama, and suggested that Airbus parent EADS would return to the contest.
The earlier withdrawal by Northrop and EADS had opened the door for Boeing to win the contract to supply 179 tanker planes.
Both Northrop and EADS have charged the terms of the contest are skewed in favor of Boeing's smaller plane.
But the Pentagon said the requirements for the new tanker had not changed and the criteria for assessing bids remained the same.
Senator Richard Shelby of Alabama, an outspoken Republican advocate for EADS, welcomed the move as "the right decision."
"A sole-sourced contract would have served only Boeing's interests," Shelby said in a statement.
This year's competition marks the third attempt by the Pentagon to build a new fleet of mid-air refueling tankers, as the project has been marred by scandal and intense lobbying in Congress with members keen to win the deal for their home states.
Morrell denied that politics had played any role in the latest decision.
"Politics are not a part of this process. Never have been. Never will be," he said.
The terms of the competition were solely based on the requirements of the military, US law and the need to ensure taxpayer money is spent wisely, he said.
In the last competition, EADS and Northrop offered a modified version of the Airbus 330, while Boeing proposed an altered 767 in its bid.
The Northrop-EADS team originally won the contract in February 2008, but the deal was cancelled after Boeing successfully appealed the decision to the investigative arm of Congress.
In 2003, the Pentagon awarded a contract to Boeing but later suspended the deal after an ethics scandal involving a company executive and an Air Force official. The Air Force official was later convicted of criminal conspiracy.
US Air Force commanders view the planned KC-X aircraft as crucial to sustaining American air power and are anxious to replace the older Boeing KC-135 Stratotankers that date back to the 1950s.

Date created : 2010-04-01