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Originally published September 22, 2007 at 12:00 AM | Page modified September 22, 2007 at 2:06 AM

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Boeing faces protest of $1B Air Force award

Boeing faces a protest from Pemco Aviation Group of its $1.1 billion Air Force contract to provide maintenance services for the KC-135 midair...

Boeing faces a protest from Pemco Aviation Group of its $1.1 billion Air Force contract to provide maintenance services for the KC-135 midair refueling tanker.

The protest was filed with the U.S. Government Accountability Office on Wednesday, Pemco said Friday. The award to Boeing violated applicable law and the Air Force's rules for the competition, Pemco said.

Pemco is asking the Air Force to terminate the 10-year contract it awarded Boeing on Sept. 11 and give it to Pemco. That award extended an arrangement under which Boeing had completed maintenance on more than 160 refueling aircraft since October 1998.

The KC-135 fleet, with an average age of 44 years, will eventually be replaced by Boeing's KC-767 tanker or Northrop Grumman's KC-30. That contract will be awarded by the end of this year. Northrop is bidding in a joint venture with European jet maker Airbus.

The GAO received Pemco's complaint and will submit its recommendation to the Air Force within 100 days, said Michael Golden, managing associate general counsel at the GAO's procurement-law division.

Doris Sewell, a spokeswoman for Pemco, declined to comment further. Air Force officials weren't immediately available for comment.

"A review by the GAO will confirm that the Air Force made the correct decision based on the requirements of the competition and the solutions offered," Boeing spokesman Forrest Gossett said.

Boeing in June 2006 backed out of a memorandum of understanding with Pemco that called for a teaming arrangement to bid on the maintenance contract. The termination notice Boeing sent to Pemco stated that a reduction in the amount of work to be done in the new contract made a bidding partnership "no longer practical or financially viable."

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