Northrop Report Sees Savings From Split Tanker Buy

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Buying aerial refueling tankers from both Northrop Grumman Corp and Boeing Co., on a competitive basis, could offer significant long-term savings, according to a report prepared by Northrop.

Northrop said it compiled earlier analyses to answer questions posed by U.S. lawmakers about such a competitive dual procurement approach, which the Pentagon strongly opposes. Defense Secretary Robert Gates says buying two tankers would result in higher development and logistics costs, but some lawmakers say that may be the only way to avert further protests and get new tankers into the Air Force fleet faster.

Northrop Grumman is not advocating a dual procurement acquisition process for the tanker replacement program,” said Northrop spokesman Randy Belote, noting his company had won a $35 billion Air Force contract for 179 tankers in early 2008, and expected to win again. But he said the report showed that buying tankers from both companies at a rate of about 24 a year for $5 billion could pay off in the longer term.


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