Boeing wins massive US air tanker contract

AFP – US Secretary of the Air Force Michael Donley

Announcing the first part of a contract worth more than $30 billion, the Pentagon said: "Boeing was a clear winner."

The US firm is now tasked with delivering 18 aircraft by 2017, but the contract is expected to grow to 179 tankers.

The planes, effectively flying gasoline stations, giving the Air Force global reach and allowing the United States to project military power well beyond its borders.

The surprise verdict capped a nearly 10-year attempt by the Air Force to begin to replace an aging Boeing-built fleet of 400 tankers dating back to the 1950s.

But the decision was an upset, with most experts predicting Boeing's European rival EADS would land the victory.

Air Force Secretary Michael Donley said both firms met 372 mandatory requirements, but because Boeing's bid was more than one percent lower other benefits were not taken into account.

The lower-priced Boeing offer will offer taxpayer savings, he added.

But facing the prospect that the decision may be contested, Donley emphasized that the decision was careful and thorough.

"This isn't about opinions, it's about the integrity of the source selection process," Donley said.

"We hope that all parties... will respect the decision and allow this important procurement to proceed unimpeded."

"The war fighter deserves nothing less," he added.

Boeing proposed the NewGen Tanker -- based on its long-haul 767 commercial aircraft -- will be assembled at a plant in Everett, Washington state and militarized in Wichita, Kansas.

The firm claimed its victory will support 50,000 US jobs.

Boeing chief Jim McNerney said the firm was "honored" to "provide a vital capability to the men and women of our armed forces."

"Our team is ready now to apply our 60 years of tanker experience to develop and build an airplane that will serve the nation for decades to come," he added.

EADS North America officials expressed "disappointment" and "concern" over the announcement.

"This is certainly a disappointing turn of events, and we look forward to discussing with the Air Force how it arrived at this conclusion," EADS North America chairman Ralph Crosby said in a statement.

"For seven years our goal has been to provide the greatest capability to our men and women in uniform, and to create American jobs by building the KC-45 here in the US. We remain committed to those objectives."

Crosby said that EADS review of the decision "will take some time."

The bid was not without political implications within the United States, with winners and losers across the country.

Washington state Democratic Senator Patty Murray swiftly welcomed the news as a win for Boeing and a win for the state.

"Today?s long-awaited decision by the Pentagon is the right one for our military, our taxpayers and our nation?s aerospace workers," Murray said in a statement.

"At a time when our economy is hurting and good-paying aerospace jobs are critical to our recovery, this decision is great news for the skilled workers of Everett."

Murray said the decision was consistent with President Barack Obama's call to "out-innovate" the rest of the world.

At the same time EADS' defeat dealt a blow to supporters in the US Gulf Coast states, still reeling from the BP oil spill last year.

EADS France-based Airbus had planned to assemble tanker aircraft in Mobile, Alabama, as well as build A330 cargo aircraft, if EADS won.

In a letter to President Barack Obama Thursday, the Republican governors of Alabama, Louisiana and Mississippi said an EADS victory would "create a much-needed economic ripple effect across a Gulf Coast region still reeling from natural and man-made disasters."