The competition for the Pentagon’s biggest contract in years intensified Monday as European aircraft maker Airbus said it would assemble commercial jets in the U.S. if it won the $40 -billion award to build aerial refueling tankers for the Air Force, the Los Angeles Times rerpots.

The announcement marks the latest effort by Airbus and its partner Century City-based Northrop Grumman Corp. to upset rival Boeing Co. to build the planes that would be used to refuel fighters and bombers in midair.

Boeing, based in Chicago, is considered the favorite after having won the initial contract that was overturned in the aftermath of a Pentagon procurement scandal several years ago that led to jail for an Air Force official and a Boeing executive.

The latest contract calls for building 179 tanker jets for $40 billion, but the potential value could rise to at least $100 billion with prospects for additional orders.

With so much at stake, the Airbus pledge to build not only tankers but also commercial planes in the U.S. is likely to raise the political stakes in what has already been one of the more hard-fought Pentagon contract competitions.

“This is really about Congress and the political fight that is coming regardless of who wins,” said Scott Hamilton, an aviation consultant in Issaquah, Wash.

A winner could be picked as early as Jan. 31, but analysts anticipate a protracted battle in Congress, which could withhold funds to buy the planes if the majority is not happy with the selection.

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