Defense Secretary Robert Gates will announce the U.S. military's new strategy for buying aerial refueling tankers at a 1 p.m. Wednesday press conference in Washington, according to the Pentagon.

Los Angeles-based Northrop Grumman Corp. was remaining upbeat late last month that it would retain a $35 billion aerial refueling tanker contract despite a scathing report by government auditors who picked apart the awards process.

However, defense industry analysts who read the report were not so sanguine.
The Government Accountability Office, the investigative agency of Congress, last month said the Air Force made "significant errors'' in reaching its Feb. 29 decision to award the $35 billion contract to a team of Northrop Grumman Corp. and partner European Aeronautic, Defence & Space Co. over Boeing Co.

Without those mistakes, Boeing would have had a "substantial chance'' of winning, the GAO said.

In February, Northrop, the nation's third largest defense contractor, and its partner, the European Aeronautic Defense and Space Co., won the contract to build 179 tankers. Chicago-based Boeing, which had been considered the heavy favorite in the competition, filed a protest in March. Among its complaints, Boeing said the Air Force did not make clear its preference for a large plane.

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