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In an upset victory over domestic aerospace giant Boeing Co., the team of Northrop Grumman Corp. and EADS, the European consortium behind Airbus, claimed victory Friday afternoon on a contract worth as much as $40 billion to build the Air Force's next fleet of aerial refueling tankers.

The Air Force waited until after the markets closed Friday to announce it has selected the modified Airbus 330 over Boeing's KC-767 tanker offering, ending a years-long saga over which aircraft manufacturer would replace the venerable fleet of Boeing KC-135 tankers, first deployed in 1956.

The contract is a major win for the Alabama congressional delegation, which has publicly and steadfastly promoted the Airbus offering. Northrop Grumman has said the tanker contract will lead to the creation of 25,000 U.S. jobs, including about 1,500 at an assembly plant in Mobile, Ala.

At a briefing for reporters late Friday, Sue Payton, assistant secretary of the Air Force for acquisition, said, "Northrop Grumman clearly provided the best value to the government when you take a look at, in accordance with the [request for proposal], the five factors that were important to this decision: in mission capability, in proposal risk, in the area of past performance, in cost price, and in something we call an integrated fleet aerial refueling rating. So I would tell you that overall, Northrop Grumman did have strong areas in aerial refueling and in airlift, as well as their past performance was excellent and they offered great advantage to the government in cost price, and they had an excellent integrated fleet aerial refueling rating."

Payton said Air Force officials would debrief both offerors in early March. "Those debriefings will be very thorough. They will explain in great detail the advantages and the weaknesses that were in proposals. And I can't stress enough what an incredibly open and transparent and rigorous first selection we have gone through. For months and months, we have been telling each offeror where their weaknesses were, where their strengths were, and so they've had a lot of opportunity to communicate with us and to make sure we were not talking past each other."

While Boeing may protest the decision, Air Force officials declined to speculate as to whether the company would do so. Air Mobility Commander Gen. Arthur Lichte said it was critical that the Air Force "get on with this."

"Anything that would slow down the process has an impact on the warfighter. If everything goes smoothly and everything progresses, we will still have KC-135s flying late until the 2040s, which makes that airplane well over 80 years old and in some cases close to 90. And from the warfighter's point of view, we need to get on with this. And so I have looked at everything. I think we got a very fair and open process. I know all the communications that went back and forth to the companies, and I just hope we can go forward with this as quickly as possible."

Payton declined to elaborate on the factors that led to Boeing's failed bid, saying it would be unfair to do so before the company itself had been debriefed.

COMMENTS

• People that don't work in Federal Contracting and do not understand acquisition rules and regulations have no right to criticize the process. A formal source selection such as this has a complex evaluation and decision-making process that can take a year or more. There are too many sole source contracts awarded to firms when there is the likelihood of good competition, and in this case, the competition prevailed and led to the best value to the Government. The best value to the Government is a combination of factors including technical capability, past performance, and cost, not the creation or losing of jobs. People need to realize that it is not only the Government's responsibility to create jobs, but that companies also play a role in that. Jobs can be won or lost if the defense sector with companies competing for a contract; that is just part of our capitalist society. The Government's primary concern for this effort is getting the best product to the warfighter, barring a GAO sustainment of the protest, it looks like they have fulfilled that purpose. Chris Posted April 1, 2008 12:38 PM
• The Air force makes me sick sometime with their "We must get on with this" crap. They should have gone with the Boeing lease back in 2002 and been done with it. They never did just do an independent review of the 2002 competition, not they insisted on a new re-compete. Everyone knows that once you review bids, there are no more secrets, so the winner back then has leached info from the Air force because we all know they can not keep a secret. Bill Posted March 11, 2008 2:12 PM
• What past performance does EADS have? None as a tanker designer/manufacturer. I can not understand how this benefits the USAF. James E Bradley Posted March 6, 2008 9:32 PM