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Northrop Could Drop Air Tanker Bid

By Alabama Public Radio

Mobile AL – The battle over a 35-billion dollar contract to build the Air Force's next generation of air refueling tankers could soon be coming to an abrupt close ... and that would be bad news for economic development in Mobile and the Gulf Coast. Alabama Public Radio's Brett Tannehill reports ...

Northrop Grumman says it plans to drop its bid to build the nation's new fleet of air tankers because the competition is slanted in favor of it's competitor, Boeing. If Northrop drops out, it would cost Mobile the chance at 15-hundred new jobs, as well as the creation of 5-thousand additional jobs across the state and region.

WAYMAN - Many people are disappointed in the fact that there's the possibility that Northrop Grumman won't be participating.

Troy Wayman is vice president for economic development at the Mobile County Chamber of Commerce.

WAYMAN ... At the same time, I think the general consensus is that everyone understands Northrop has to stand its ground on the issue and work to make sure there's a fair and open bid process.

It's not the first time concerns over unfairness have arisen. In 2003, Boeing initially won the air tanker contract, and then lost it after allegations of fraud surfaced. Then, when Northrop won the contract last year, Boeing claimed the bid process lacked specificity and showed favoritism to Northrop's plan. The Government Accountability Office agreed with Boeing and ordered a new solicitation of bids. Pentagon spokesperson Bryan Whitman says the newest draft Request For Proposals is now in a public comment period.

WHITMAN1 - ... we have to identify what we're looking for for America's military. And we've done that in great detail and with an awful lot of transparency. There should be no question to what the military is looking for. And if there is, that's why we're in this period of time where we are answering questions.

Now Northrop has serious questions about the Request For Proposals, also called an RFP. Northrop Grumman spokesperson Randy Belote says they feel the new RFP was rewritten to favor Boeing's air tanker plan.

BELOTE1 - It seems in this draft RFP, all the things that were important to the Air Force in the previous RFP are gone.

Belote says last year's winning plan from Northrop presented a multi-use tanker that could carry larger amounts of fuel and could also be used to transport troops and equipment.

BELOTE1 - ... and now the Air Force is very interested in less capability and a much lower cost type of tanker that clearly ... places us at a disadvantage.

Belote says if the final RFP does not clarify Northrop's questions about the air tanker's requirements, then there's no point in continuing with the bid process. But he says Northrop does want the contract.

BELOTE3 - We're not dropping out. We want to make sure people understand that we expect the Department of Defense will modify its approach to the procurement process it currently has put forward to make sure we have a full, fair and transparent competition.

Bryan Whitman says the Pentagon is now considering comments on the draft RFP. But he says the Pentagon's requirements for the air tanker would NOT be changed to suit Northrop or Boeing.

WHITMAN4 - We would regret if Northrop and Airbus decided to take themselves out of the competition ... We hope that they will reconsider their position but we're in no position to compel someone to compete for this either.

That means if Northrop is correctly interpreting the current requirements, plans to build the air tankers in Mobile are dead. Troy Wayman with the Mobile Chamber of Commerce says that would be bad, but not the end of the world.

WAYMAN - The tanker is not our only iron in the fire. There's the potential for other projects with Northrop that we would pursue. Don't get me wrong. We would be very disappointed if the tanker project did not happen here.

As the procurement process drags on the KC-135 air tankers currently in use aren't getting any younger. The current fleet is close to 50 years old, and quickly nearing the end of its service.

Brett Tannehill, APR News

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