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Boeing sole competitor for $35 billion Pentagon contract

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Wire and staff reports Updated 9:06 PM Monday, March 8, 2010

WASHINGTON — Northrop Grumman Corp. says it won’t compete against Boeing Co. for a $35 billion contract to build refueling tankers for the Air Force because it doesn’t think it can win.

Northrop’s chief executive officer and president, Wes Bush, said Monday that the Pentagon guidelines for the program favor Boeing’s smaller refueling tanker and does not provide what Bush calls “adequate value recognition” of the added capability of a larger tanker.

That, according to Bush, precludes Northrop from any competitive opportunity.

The Obama administration had said such sole-source contracts aren’t a good deal for the taxpayer. But industry insiders say there’s no other company poised to meet the Air Force’s guidelines for the program.

It marks the latest development in a struggle that has pitted Boeing and its congressional supporters against Northrop and its supporters in the competition to supply the Air Force with new aerial tankers to refuel aircraft that may have to fly long distances. The Air Force has said the KC-X tankers are a top acquisition priority to replace the half-century-old tankers it is operating now.

When a contractor is chosen, the program will be managed from the Aeronautical Systems Center at Wright-Patterson Air Force Base.

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