Officials still hope firms will compete for tanker deal

Senior Pentagon officials on Wednesday said they hoped the final request for proposals on the Air Force's high-stakes tanker program would spur competition between two aerospace giants, sidestepping questions about their strategy should one of the bidders drop out.

Speaking at the Pentagon after several briefings to lawmakers and aircraft manufacturers on the final request for proposals for a fleet of aerial refueling tankers, officials said they believed they had laid the groundwork for a fair, open and transparent competition.

"We hope and expect to have a good competition," Air Force Secretary Michael Donley said.

But the reaction on Capitol Hill set a different tone, with concerns from Alabama's congressional delegation raising questions about whether there will be two bidders for the program.

Northrop Grumman Corp., which has teamed up with EADS, the European consortium behind Airbus, has planned to compete for the contract and, if successful, would build the planes at a new facility in Mobile, Ala.

But Northrop officials have threatened to pull out of the competition for the procurement program -- worth as much as $40 billion -- amid concerns that an initial draft RFP favored a smaller-body Boeing 767 aircraft over their offering of a modified Airbus 330.

Northrop's initial reaction Tuesday to the final RFP was lukewarm, acknowledging receipt of the document.

"Northrop Grumman will analyze the RFP and defer further public comments until its review of the document has been completed," spokesman Randy Belote said in a prepared statement.

Sen. Jeff Sessions, R-Ala., said he would urge the Northrop Grumman-EADS team to compete but said there had been few changes to the draft RFP.

Sessions said he is worried the team would opt out of the bidding. "They'll have to do what is in their best interest," he said.

At the Pentagon, Deputy Defense Secretary Bill Lynn said he believes it is in Northrop's interest to bid for the contract to provide the Air Force with state-of-the-art tankers to replace Eisenhower-era KC-135s still in heavy use.

"Northrop has a choice to make," Lynn said. "We're hoping Northrop chooses, with its European partner, to bid. ... We have options that we could pursue if they don't."

Lynn would not discuss in further detail the Pentagon's options in the case Boeing becomes a candidate for a sole-source contract. Instead, the Pentagon's No. 2 official emphasized his hope that there will be a competition.

For its part, Boeing released a statement from Jean Chamberlain, general manager of its tanker program, stating that it has begun the process of "closely studying the details" of the final RFP.

"We've said consistently that it is up to the Air Force to determine the KC-X requirements for a new generation of tankers," Chamberlain said, referring to the current designation of the next-generation tankers. "It's our responsibility to respond to those requirements."