The Pentagon said Wednesday it will re-open for competition a $35 billion contract to build the Air Force’s next generation refueling tankers that originally was awarded to Northrop Grumman Corp.
The plan, which hands control to the Pentagon’s top acquisition chief and sets up a dedicated source-selection committee, indicates that senior civilians at the Defense Department have lost confidence in the Air Force’s ability to manage the contract.
The contract originally was awarded to Northup last February in a decision that suprised many and led Boeing to file a formal protest almost immediately.
Rep. Todd Tiahrt, R-Kan., and Norm Dicks, D-Wash, along with the Secretary of Defense will oversee the competition between Boeing Co. and a team led by Los Angeles-based Northrop.
“I think it’s better,” said Dicks at a press conference, according to the Associated Press. “No one has any faith in the Air Force.”
Last month the Government Accountability Office said that it found “significant errors” with the award adding that Boeing might have won the contract had mistakes in evaluating the bids not been made.
Defense Department officials added that new request for proposals will be issued by early August with an award coming later this year. Northrop has partnered with Airbus parent European Aeronautic Defense and Space Co. to build the new fleet of 166 tankers.
In response to the decision, Northrop Grumman said it was pleased that Defense Secretary Robert Gates at least intends the new competition to be concluded relatively quickly
“We are reviewing the decision to ensure the re-competition will provide both companies a fair opportunity to present the strengths of their proposals,” said Randy Belote, a Northrop spokesman. “The United States Air Force has already picked the best tanker, and we are confident that it will do so again.”
Shares in Northrop closed down 90 cents, or 1 percent, to $65.27 on Wednesday.
