In a surprising move, the Government Accountability Office sided with Boeing Co. Wednesday in its protest over the Air Force's decision to award a lucrative tanker contract to Northrop Grumman Corp. and a European partner.
The GAO said the Air Force made a number of errors during the contract competition and recommended the Pentagon require companies to resubmit bids. But the GAO decision does not officially overturn the $35 billion deal.
The decision will ultimately be made by Air Force brass, though congressional leaders could play a role by blocking funding for the contract.
The GAO recommendation is a blow for Los Angeles-based Northrop, which shocked the aerospace world when it upset rival Boeing by winning the deal Feb. 29. Since then, Boeing and congressional supporters have questioned the decision to award such an important military contract to a team that included the European Aeronautic Defence and Space Co., the Netherlands-based parent of Airbus.
The contract called for the Northrop/EADS team to build 179 aerial refueling tankers, which allow fighter jets and other aircraft to refuel without landing. The deal is the first of three contracts for up to 500 aircraft, with a total potential value of more than $100 billion.
Boeing was widely considered the favorite to win the contract. The Chicago-based plane maker, the nation's second-largest defense contractor, has built tankers for the military for almost 50 years. Boeing had previously won a $23 billion contract to replace its aging KC-135 tankers, but that deal fell apart in 2003 amid a procurement scandal that sent several top officials to prison.
After losing this latest round, Boeing filed a protest, saying the Air Force did not make clear its preference for a larger aircraft, which put Boeing's smaller 767-based plane at a disadvantage.
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