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Boeing, EADS face off in heated tanker bid

disclaimer: image is for illustration purposes only
by Staff Writers
Washington (UPI) Jul 12, 2010
Facing off in the final stretch of one of the largest and most controversial tenders, Boeing Co. said that it officially submitted its bid to replace part of the aging U.S. fleet of aerial-refueling tankers.

The move came within a day of a similar submission by its European rival European Aeronautic Defense and Space Co.

The U.S. Air Force is expected to render its final decision in November.

Still, military and industry officials anticipate the U.S. aerospace giant to clinch the $35 billion deal to build 179 tanker planes.

Northrop Grumman Corp. and EADS, the parent company of Airbus, beat Boeing in a similar race two years ago. Their winning bid, however, was annulled after government auditors found that the Air Force had skewed its judgment rules.

The annulment sparked a diplomatic row, with senior European officials berating the United States for what they billed as an act of protectionism. Since then EADS was allowed to return to the bidding process.

Last week, EADS got an early run into the contest, submitting an 8,000-page bid to replace the Air Force's fleet of Eisenhower-era airborne gas stations.

It is the third bid by the aerospace giants tussling to win the deal that could eventually expand to replace all of the Air Force's 400 tankers, which are more than 50 years old.

The original deadline for EADS and rival Boeing to submit their bids was May 10. But because of sparring debate the date was pushed back to July 9.

Boeing, a Chicago-based manufacturer, is pitching a variation of its 767 civilian jetliner, arguing that it would prove more cost-effective than the A330 model being put forward by EADS. Just fuel costs, expected to be 24 percent less than the EADS variant, provide a fuel bill leaner by $10 billion, company officials claim.

The company also insists that its bid satisfies "372 Air Force requirements at the lowest cost to the taxpayer and would support 50,000 U.S. jobs," Market Watch reported.

Likewise, though, EADS argues its plane would be built by its Airbus unit in Mobile, Ala., securing 48,000 jobs in the United States. And to offset Boeing's cost-effective fuel costs, EADS may have to significantly pare the price of its bidding air craft.

But that, the Los Angeles Times reported, "would raise politically sensitive questions about whether it was using European Union aid to undercut Boeing to win one of the largest defense contracts in history."

In a recent setback for the European aerospace company, the World Trade Organization ruled that Airbus had received illegal "launch aid" for other aircraft projects.

Several members of the U.S. Congress have since then lobbied against EADS, trying to penalize the company for what they allege to be an illegal advantage in the bidding war.



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