Northrop Grumman Corp confirmed late Monday that it will not compete for the U.S. Air Force's multibillion-dollar aerial tanker contract because it believes the odds are significantly stacked in favor of Boeing Co.’s competing bid.
The Los Angeles defense contractor said that despite its protests, the Air Forces’ revised specifications for the project continue favor a revamped,smaller plane proposed by Boeing. It noted that its own A330 tanker design had won out over the Boeing design in at least five tanker competitions in other countries.
"Northrop Grumman fully respects the department's responsibility to determine the military requirements for the new tanker,” said Chief Executive Wes Bush in a statement. “However, the Northrop Grumman and EADS team is very disappointed that the (new evaluation methodology) now dramatically favors Boeing's smaller refueling tanker.”
Northrop’s decision leaves its European partner, Airbus parent EADS, to determine whether it can submit a solo bid. Northrop and EADS won the last competition in February 2008 with an Airbus A330-based tanker plane, but the contract was later canceled after auditors upheld a protest by Boeing.
The Obama administration, which inherited the dispute from the previous administration, had hoped for a competitive bidding process for the estimated $35 billion contract.
Northrop shares earlier closed down 6 cents, or less than 1 percent, to $64.16 on the New York Stock Exchange and showed little movement in afterhours trading.
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