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Photo courtesy of the Boeing Co.  (click to enlarge)
Two Japan Air Self-Defense Force KC-767 tankers extend their aerial refueling booms during a test flight earlier in the year.
 
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Mike Benbow, Business Editor
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Published: Thursday, September 4, 2008

Air Force official wants tanker deal now

Boeing or Airbus, an Air Force official says he doesn't care who gets the contract, but it's time to sign a deal and get the planes built.

WASHINGTON -- A high-ranking Air Force official on Wednesday pressed the Pentagon to expedite the award of a disputed $35 billion contract for new aerial refueling tankers so the service can retire Eisenhower-era aircraft.

Gen. Arthur Lichte, who runs Air Mobility Command, told reporters that either aircraft offered by the Boeing Co. or Northrop Grumman Corp. were capable of the mission, but he urged a quick decision to avoid placing further strain on the service's already aging aircraft.

"I don't care which tanker wins," said Lichte. "I just need a new tanker."

The four-star general said if the program is delayed by another year or more, the Air Force will be forced to fly some its current fleet past 2040, which would make those planes at least 80 years old.

A Pentagon spokesman could not immediately be reached for comment Wednesday afternoon.

The aircraft are used to refuel combat and other support planes in flight and have helped widen the range of the U.S. military's reach. The planes have been used in operations in the Persian Gulf, the Balkans and Afghanistan.

Boeing in February lost the deal to replace 179 aerial refueling tankers to Northrop and its partner, Airbus parent European Aeronautic Defense and Space Co. The Chicago-based aerospace manufacturer filed a protest in March.

The competition was reopened after government auditors found "significant errors" in the Air Force's decision. The revamped contest -- overseen by Pentagon acquisition chief John Young -- is focused on eight areas where the Government Accountability Office found problems.

The Pentagon was expected to release its final request for bids last week, already late for a self-imposed deadline of Aug. 15 that continues to slip.

Under the Pentagon's current plan, both Boeing and Northrop were expected to respond to the bid request by Oct. 1, with a final contract award by the end of the year. But both of those deadlines also are likely to be missed.

Boeing has threatened to exit the competition if it does not receive an additional four months from the Pentagon to assemble its offer. The company also has said it would consider protesting the final request for bids.

Los Angeles-based Northrop has repeatedly indicated that a delay in the program would only benefit Boeing, while raising costs for the taxpayer and prolonging delivery of a new tanker for the military.

"How are we going to solve this?" asked Lichte. "I just don't understand at some point how you stop and say, 'OK, this company wins, this company loses.' "

Lichte said he wouldn't be surprised if either competitor protested the final request for bids. If a protest is launched, that could further jeopardize the Pentagon's target of awarding a deal by the end of the year.

"This is all part of the process ... but what I want to do is bring it to closure and get on with getting a new tanker," he said.

The program has been on hold since late 2004 after Boeing lost the contract amid an ethics scandal that resulted in prison terms for a former senior company official and a former high-ranking Air Force official.

The deal, one of the largest in Pentagon history, is the first of three contracts worth up to $100 billion to replace nearly 600 refueling tankers over the next 30 years.

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