Congressional auditors urged the Air Force to reopen bidding for a new fleet of aerial tankers Wednesday, finding the service made 'significant errors' in awarding the $35 billion contract to Northrop Grumman.
The Government Accountability Office (GAO) opinion is a major victory for aerospace giant Boeing, which protested the February decision to award one of the largest contracts in U.S. military history to its rival. The Air Force said it is reviewing the decision, which was welcomed not only by Boeing, but also by several members of Congress with Boeing (BA, Fortune 500) plants in their states."
[From CNN: Air Force may reopen $35B tanker bid at government bidding]
I wrote back in March about the uproar with the tanker contract. What were the odds that the mighty Boeing defense apparatus was going to simply let this pass and not only let that contract go to Northrop Grumman, but to also open the possibility of Airbus assembling commercial aircraft on US soil. None.
They'll fight tooth and nail against it.
For those of you that missed this whole when it started, here is the short version:
1. The USAF is overdue new tankers, some of which are already close to 50 years old.
2. The USAF has been struggling to get this project going since 2001.
3. First major player is Boeing, who wants to base it on the 767 commercial platform.
4. Second major player is Northrop Grumman, who wants to base it on an Airbus airframe.
5. The contract is worth $35 billion and involves up to 179 aircraft for quite a few years.
6. If Northrop Grumman takes the contract, their new facilities open the possibility of expanding operations to Airbus commercial aircraft, not just military tankers.
7. You can easily guess who is in favor of which contract by plotting current Boeing facilities and newly proposed Northrop Grumman facilities on a map.
That's all there is to it, simple math. The main difference is that Boeing is already here, while Airbus is a foreign competitor.
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