Pentagon extends deadline for tanker modernization study

In another setback for Boeing Co., the release of a study on Air Force tanker modernization options has been delayed several months while further review of alternatives is completed.

Pentagon and industry sources familiar with the study said further evaluation will likely be completed in May, although Pentagon officials could not be reached for comment by presstime. Boeing officials said they have not been officially informed of the delay and declined to comment.

The Defense Department had planned to brief Capitol Hill in early February on the results of the "analysis of alternatives" conducted last year by the RAND Corp. But a congressional source said Tuesday that the briefings have been postponed nine months to allow RAND additional time to conduct a more thorough study.

The presentation to Congress previously was delayed from December to January, and then again to February, to allow the Pentagon to determine whether further study was needed. The move was likely prompted by Sen. John McCain, R-Ariz., who said the five-month period given to RAND to complete the analysis was insufficient.

The analysis of alternatives is to address a range of options, including upgrading the Air Force's aging fleet of KC-135E tankers and buying new or used aircraft. Such studies typically take at least one year to complete. The Pentagon is expected to hold a competition after the study endorses a path forward, but the delay in determining a tanker modernization plan is likely a blow to Boeing. Critics of the lease deal charge that Boeing has been keeping its 767 line open for more than three years in anticipation of winning the lucrative tanker contract.

The Air Force attempted to lease Boeing KC-767s long before any alternatives were formally considered, but congressional critics, led by McCain, ultimately forced the Pentagon to consider alternatives to the Boeing aircraft and to open any future tanker contract to competition.

A new tanker bid would likely pit Boeing's KC-767 against the European Airbus KC-330. The Pentagon also has apparently disbanded its "Leasing Review Panel" established several years ago after the Air Force began negotiating a now-defunct $29 billion deal to lease 100 Boeing tankers.

The panel, co-chaired by former Pentagon Comptroller Dov Zakheim and acquisition chief Edward Aldridge, was designed to help identify possible future lease agreements, though Pentagon insiders say the Boeing lease was the only deal the panel ever considered.