Pentagon Postpones Tanker Competition

Leaders at Boeing said they supported the Pentagon's move to postpone the decision, saying in a statement that it would give military leaders "the appropriate time for this important and complex procurement to be conducted in a thorough and open competition."

"This will assure delivery of the right tanker to the Air Force and serve the best interests of the American taxpayer," the company said.

Northrop said it was "extremely disappointed" with the Pentagon's decision and "greatly concerned" about the Defense Department's acquisition process.

"The Department of Defense, as recently as last week, stated the urgency to replace the Eisenhower-era fleet of refueling tankers," said Randy Belote, a Northrop spokesman. "With this delay, it is conceivable that our warfighters will be forced to fly tankers as old as 80 years of age."

Boeing closed down $2.31, at $61.71. Northrop's stock closed down 80 cents, at $69.99.

On Capitol Hill, leaders from Washington state and other places where Boeing has major operations said they were relieved that the Pentagon had pushed back the procurement decision.

"We're pleased this is going to be pushed over to the next administration," said Rep. Norm Dicks (D-Wash.), a member of the House Appropriations Committee. "This would have been done in the middle of a presidential campaign. Putting it off until next year lets the new administration come up with a new request for proposals."

Rep. Rosa DeLauro (D-Conn.), whose state would benefit from $185 million in economic activity annually from an estimated 4,000 direct and indirect jobs with Boeing's engine maker, Pratt & Whitney, supported the decision, saying the delay means the "Pentagon will ensure a level playing field and that no one has an unfair advantage."

The delay could pose some risk for Boeing, though, if Republican Sen. John McCain (Ariz.) wins the presidential election. McCain was a harsh critic of Boeing during the Air Force's earlier effort to lease the tankers.

Northrop had promised to build a major facility in Mobile, Ala., to work on its proposed version of the tanker -- based on the Airbus A-330 -- and it drew widespread support from congressional leaders there and in neighboring states. Leaders in those states criticized Gates's announcement.

Rep. Jo Bonner (R-Ala.) called it "flawed thinking" and said he was "outraged by the Department of Defense's decision to cancel this competition." Sen. Richard C. Shelby (R-Ala.) said "this misguided decision clearly places business interests above the interests of the warfighter."

In many analysts' eyes, though, the decision represents fundamental problems with the Pentagon's ability to buy major weapons systems.

"The Air Force and the DOD have spent over six years to reach this point, and what do they have to show?" said David J. Berteau, a senior defense analyst at the Center for Strategic and International Studies.

"They have three failed procurements," he said. "They've punted to the next administration with no clear plan of how they're going to go forward. . . . By any measure, that's a failed system of procurement and acquisitions."

Staff researcher Julie Tate contributed to this report.