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Originally published Saturday, May 2, 2009 at 12:00 AM

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Deal would prevent split Boeing-Northrop tanker contract

White House officials and Democratic congressional leaders have staved off a plan to divide new aerial refueling tankers between Boeing and a team made up of Northrop Grumman and Airbus parent European Aeronautic Defense and Space (EADS). But some C-17 cargo planes and F/A-18 fighters may be added back.

The New York Times

WASHINGTON — White House officials and Democratic congressional leaders have staved off a plan to divide new aerial refueling tankers between Boeing and a team made up of Northrop Grumman and Airbus-parent European Aeronautic Defense and Space (EADS).

The discussions, involving the White House chief of staff, Rahm Emanuel, and House Speaker Nancy Pelosi, D-Calif., are an effort, congressional aides said, to limit the influence of Rep. John Murtha, D-Pa.

Murtha has long held sway over billions of dollars in military spending, but Democrats are concerned that a string of federal investigations of contractors or lobbyists close to Murtha could be potentially embarrassing.

Murtha, the chairman of the defense-appropriations subcommittee, said earlier this week that Congress would add up to $10 billion in contracts to the Obama administration's request for $83.4 billion for Iraq, Afghanistan and Pakistan.

Under the compromise, congressional leaders said they would try to limit added spending to several billion dollars.

Congressional aides said the deal has Murtha dropping plans to insert a provision that would require the Pentagon to divide a $35 billion contract for aerial refueling tankers between Boeing and a joint venture including Northrop and EADS.

But Murtha still plans to press the tanker issue in the fiscal 2010 budget, his spokesman, Matthew Mazonkey, said Friday. Murtha "remains committed to working out a plan that gets the tankers in the air faster," Mazonkey said.

Boeing lost the tanker competition to Northrop in February 2008 and filed a protest two weeks later, an appeal sustained by the U.S. Government Accountability Office in June. Defense Secretary Robert Gates in September postponed a new competition until this year.

The battle over the tanker work — work that could last decades and eventually cost $100 billion — has been particularly bitter. Gates has said it would be cheaper to require the suppliers to compete against each other for the contract. But Murtha and others have said the losing bidder is likely to protest any such award and add to the delays in replacing the aging tanker fleet.

The compromise would also slash a possible pot of money for buying more planes from Boeing, the company that was hit the hardest by various cuts proposed by Gates.

Earlier this week, Murtha had supported Boeing's request for up to 15 more C-17 cargo planes, a program that Gates would like to cancel, and other lawmakers planned to seek money for nine more Boeing F/A-18 fighters for the Navy.

But congressional officials said that only eight more C-17s, which cost more than $200 million each, would be bought. And instead of buying more F/A-18s, at $60 million each, the bill might encourage the Pentagon to negotiate a multiyear contract for more planes.

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Boeing has said it needs more orders for the C-17 to avoid closing a production line that employs 5,000 people, and Congress approved extra purchases in each of the last two years.

During the Bush administration, supplemental bills were often laden with contracts for military suppliers. President Obama has pledged to phase out the requests, and the military contractors are starting to realize the game is changing.

"There is a lot of pressure from the White House to back down on all this stuff," a military analyst, Loren Thompson, said.

Material from Bloomberg News was used in this report.

Copyright © 2009 The Seattle Times Company

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