EADS to fly solo in bid for Air Force tanker deal

The European consortium EADS announced Tuesday it will compete against rival Boeing Co. for a lucrative contract to build 179 aerial refueling tankers for the Air Force.

EADS, the parent of Airbus, will fly solo as the prime contractor, with no U.S. partner to help manage the estimated $40 billion program.

For the last five years, the firm has sought to increase its presence in the U.S. market by teaming up with prime contractor Northrop Grumman Corp. in pursuit of the tanker contract. The Franco-German firm even committed to constructing a facility in Mobile, Ala., to build the tankers along with a second plant to produce commercial aircraft.

But Northrop Grumman dropped out of the competition last month amid concerns that the Air Force's request for proposals favored Boeing's 767 aircraft model over the Airbus A330.

During a news conference in Washington, EADS officials said their tanker, which has been sold to five other countries, has matured to the point where they no longer need a U.S. company to manage the effort.

"Our capacity for demonstrating the design, development and production skills associated with the tanker continued to move ahead" since 2005, said Ralph Crosby, chairman of EADS North America.

Sean O'Keefe, chief executive of EADS North America, said his operation has the security arrangements it needs to handle any classified information required of a prime contractor on such a large military program.

EADS informed the Pentagon Tuesday of its intent to bid. It has until July 9 to respond to the RFP. The Pentagon agreed late last month to extend the original May 10 deadline by 60 days to give EADS time to bid without Northrop Grumman; EADS officials had sought a 90-day extension.

O'Keefe, a former NASA administrator, Navy secretary and Pentagon comptroller, said the firm will use "every bit" of its time to construct a bid.

"Though this will be an extraordinary challenge, we have every confidence this team will deliver a responsive proposal that will offer to the U.S. war-fighter the most capable tanker in the world," O'Keefe said.

The firm believes its Airbus A330 meets all of the Air Force's 372 requirements for the plane that will replace the Eisenhower-era Boeing KC-135 tankers still flown by the Air Force.

Pentagon spokesman Geoff Morrell said the Defense Department welcomed the EADS announcement.

"We have consistently supported competition for the Air Force KC-X tanker replacement program," Morrell said. "The department is committed to conducting a fair, open and transparent acquisition process."

Sen. Richard Shelby, R-Ala., said he remains concerned that the competition is "already skewered toward a smaller, less capable airframe," but hopes the Air Force will recognize EADS offers "the most modern, versatile and cost-effective tanker."

If successful, EADS still plans to construct a production facility in Mobile and build all but the first three tankers there.

Boeing issued a statement expressing confidence in its proposal and its ability to meet the Air Force requirements.

"While we are disappointed in the bid submission delay, we hope for a fair and transparent competition free of any additional changes intended to accommodate a non-U.S. prime contractor," the company said.

Boeing plans to build its tanker in Everett, Wash., with the necessary military modifications to be added in Wichita, Kan.

Rep. Todd Tiahrt, R-Kan., said EADS' go-it-alone decision proved that Northrop Grumman was "merely an American paint job on a French tanker."

Meanwhile, Sen. Pat Roberts, R-Kan., urged the Pentagon to "avoid coddling EADS to the detriment of American war-fighters who have waited eight years for this contest to end."

In the rush to acquire new planes in 2003, the Air Force tried to lease Boeing KC-767s before reviewing other options. But the deal collapsed under pressure from congressional critics, led by Sen. John McCain, R-Ariz., who helped expose crimes involving the lease that sent two senior Boeing executives to federal prison.

The collapse of the lease deal led to a competition to sell planes to the Air Force, which resulted in a contract award in 2008 to the Northrop Grumman-EADS team. But Boeing protested the contract to GAO, which led to cancellation of the contract and the latest competition.