Northrop, EADS Beat Boeing for Pentagon Contract

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The Air Force has awarded a huge defense contract to build midflight refueling tankers to the team of Northrop Grumman and Airbus parent EADS, in a deal that could be worth up to $40 billion over the next 10 years.

The initial contract is to build nearly 200 jet refueling aircraft, as the Air Force moves to phase out its aging fleet of planes that are used to extend the range of fighter jets and other warplanes.

In winning the contract, Northrop Grumman Corp. and its European partner, EADS, won out against Boeing Co., which had previously won a contract to provide leased tanker aircraft to the military.

The bidding for the contract brought about a scandal in 2004, when two former Boeing officials were sentenced to prison terms after conflicts of interest were uncovered.



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