Northrop to Drop Bid for Tanker

[cal04]

Source: NY Times

The Northrop Grumman Corporation said on Monday that it has decided not to bid for a $40 billion contract to build aerial refueling planes for the Air Force, leaving its rival, Boeing, as the likely winner of one of the Pentagon’s largest contracts.

Northrop complained that the government’s requirements favored the smaller plane that Boeing planned to offer. Northrop’s executives have also questioned whether the contract would be profitable enough given the Pentagon’s insistence on setting a final price before the design and testing were completed.

Northrop’s decision marks yet another controversial moment in the long-running effort to replace a fleet of tankers dating back to the Eisenhower administration. It also raises questions about President Obama’s plan to foster more competition and shift more of the responsibility for covering cost increases to military contractors.

Military analysts said Boeing, based in Chicago, could charge a higher price if it ends up being the only bidder for the planes.

Read more: http://www.nytimes.com/2010/03/09/business/09tanker.html?hp

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http://www.businessweek.com/news/2010-03-08/northrop-not-bidding-for-35-billion-tanker-program-update1-.html
“This is very good news,” said Dicks, a Democrat from Washington state, where Boeing’s manufacturing hub is located. “We can now go forward with the program.”

[Diane R]

1. This will be welcome news in Seattle.

[madokie]

7. Welcome news to most of us

[JBoy]

2. Good. Now Sen. Richard Shelby (R-Northrop Grumman) can officially STFU.

[WheelWalker]

3. +1

Good one!

[uberblonde]

4. Not so fast.

This may very well be a quid pro quo, where they're dropping out to allow a higher price for Boeing and in exchange, Boeing will do the same for NG.

[depakid]

5. Unlikely

The writing was already on the wall here- the RFP and the procurement politics favored Boeing, even though it doesn't have the best aircraft for the job and has had major problems with tanker deliveries in other nations.

[DissedByBush]

6. "Boeing... could charge a higher price if it ends up being the only bidder"

EADS still might bid alone.

I don't know if I want our tankers made overseas though.

I'd kind of like the manufacturing jobs to stay here.

[depakid]

8. The Northrop/EADS deal was to build assembly plants in America

Specifically Alabama. Hence that idiot Shelby throwing fits.

Boeing is also a an overseas outsourcer, so that's not much of a concern overall (though of course it is to Boeing, who doesn't want any competition on its own soil).

[Sen. Walter Sobchak]

9. And Boeing is once again rewarded for massive criminality

Boeing should have been permanently banned from the tanker competition after the leasing scandal and far more people should have gone to prison. Northrop/EADS won fair and square last time.

While the rest of the world is taking delivery of their KC-330's, Boeing will be making excuses while costs spiral out of control and EIS is pushed into the distant future.

Ask Japan and Italy how they like their 767 Tankers, hell make them an offer.

[terrell9584]

10. That plant was going to be built in the Katrina zone

And would have given jobs to Katrina victims. It's a shame the big bully wins again.

[ProgressiveProfessor]

11. Lets see, a fixed price contract with a single bidder...we know how those tend to end up