Air Force concedes mistakes in tanker cost estimates

The Air Force has conceded that Boeing Co.'s proposed KC-767 aerial refueling tanker would cost less over time than the winning plane offered by Northrop Grumman Corp and its European subcontractor EADS, Boeing told auditors reviewing its protest against the Air Force decision, Reuters reported.

News of Air Force errors in calculating the life cycle costs of the competing bids, which were also confirmed by Northrop, comes as the GAO prepares to rule by June 19 on the Boeing protest.

In a 191-page document filed with the GAO, Boeing said mistakes in calculating the life cycle costs of the airplanes raised questions about the thoroughness and credibility of the Air Force's overall evaluation.

But Northrop downplayed the impact of the Air Force error, saying life cycle costs were just one part of the Air Force evaluation. The final decision was based on the capabilities of its KC-30 tanker, not cost alone, Northrop officials said.

The Air Force declined comment.