Boeing Wins Round in Air Tanker Fight

A government report has found significant errors in the awarding of an Air Force contract for refueling tankers. The deal, worth nearly $40 billion, went to Northrop Grumman and its European-based EADS. But Boeing's appeal gains traction.

STEVE INSKEEP, host:

Whatever the price, we still do not know what kind of plane will carry refined oil for the U.S. Air Force. The Air Force has been accused of significant errors in awarding a contract for a new tanker plane. This is a $40 billion contract, and it went to a European defense company, EADS, and its American partner, Northrop Grumman. The loser was Boeing. It protested the award. And now auditors connected to Congress, the Government Accountability Office, have sided with Boeing.

NPR's Tom Bowman has more.

TOM BOWMAN: The GAO says the Air Force should get new bids from the defense companies and award a new contract. A senior defense official tells NPR the Air Force will likely call for new bids quickly. The GAO report slammed the Air Force, pointing to seven serious mistakes, among them inflating Boeing's costs for building the plane. Also, the Air Force told Boeing it fully satisfied a key performance goal, then figured out the company only partially met the goal without telling Boeing.

Boeing praised the GAO and said it looked forward to working with the Air Force in what called next steps. Northrop Grumman, meanwhile, said it would review the government report. A spokesman said the company offered the most modern and capable tanker.

The refueling tanker is essentially a flying gas station for bombers and other military planes. The average age of the current fleet is nearly 50 years old. The new tanker was expected to start flying in 2013. The senior defense official says a re-bid will likely delay delivery of that new tanker by at least one year.

Tom Bowman, NPR News, the Pentagon.

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