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Originally published March 18, 2010 at 10:00 PM | Page modified March 19, 2010 at 10:56 AM

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EADS may make bid for tanker contract

Aerospace and defense company EADS said Friday it is considering a new bid for a $35 billion Pentagon contract for midair refueling tankers but will only compete if it has a fair chance against rival Boeing Co.

The Associated Press

Aerospace and defense company EADS said Friday it is considering a new bid for a $35 billion Pentagon contract for midair refueling tankers but will only compete if it has a fair chance against rival Boeing Co.

A consortium of EADS and Northrop Grumman pulled out of the bidding for the long-awaited, 179-tanker contract earlier this month. They said the terms of the deal appeared designed to favor a smaller jet offered by Boeing.

But Thursday, the Defense Department "indicated it would welcome a proposal from EADS North America as prime contractor for the KC-X tanker competition," according to a statement Friday from EADS. It called the move "a significant development."

The Pentagon said Friday that EADS has requested a 90-day extension of the bidding deadline.

EADS, the parent company of Airbus, said it would consider bidding again if it is given an extended deadline to prepare a new proposal - and, crucially, "if there is a fair chance to win."

EADS and its American partner, Northrop, were initially awarded the contract for the tanker fleet in 2008, but Boeing protested and the deal was annulled later that year.

The withdrawal of the Northrop-led consortium left Boeing as the only bidder.

European Aeronautic Defence & Space Co. NV said the Pentagon was indicating "a willingness to extend the timeframe," and said it is "assessing this new situation to determine if the company can feasibly submit" a new bid.

But it said the Pentagon's new stance "does not address EADS' underlying concerns" that the request for bids is designed to favor Boeing.

EADS spokesman Alexander Reinhardt said the company, which is based in Paris and Munich, will decide in coming weeks on whether to bid - either alone or with a partner.

Boeing is offering a military version of its 767 passenger jet. Reinhardt said he thinks it is unlikely that EADS would change the larger Airbus A-330 airframe on which the original tanker offer was based, because the only other suitable plane it has ready - the A310 - is old and thus unsuited for a fleet with a lifetime of 45-50 years.

The current deadline is early May.

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Pentagon spokesman Bryan Whitman said EADS has requested a 90-day extension of the bidding deadline, which he said the Defense Department would consider.

The possibility immediately sparked a fierce reaction in the U.S.

"I am very disappointed that the Department of Defense is even considering giving in to Airbus and extending the hard deadline for tanker bids," U.S. Sen. Patty Murray, a Democrat from Washington, said in a statement. "This is no time to put American service members and workers on hold while a foreign company waffles."

French President Nicolas Sarkozy accused the U.S. government of protectionism, and similar concerns were expressed by British Prime Minister Gordon Brown and German Chancellor Angela Merkel. Sarkozy said he would bring it up at talks with President Barack Obama later this month.

Boeing spokesman William A. Barksdale said the company "is 100 percent focused" on submitting its bid.

"Boeing recognizes it must earn the tanker contract by providing the Air Force with a modern and capable tanker that meets or exceeds all warfighter requirements and is cost-effective to buy, own and operate," he said.

Twenty-eight of the EADS tankers have been ordered or are already in service with the air forces of Australia, Britain, Saudi Arabia, and the United Arab Emirates. Boeing's KC-767 tanker, which can carry a smaller payload, has been ordered by Italy and Japan.

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Associated Press writers Angela Charlton in Paris, Lolita Baldor in Washington and Josh Freed in Minneapolis contributed to this report.

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