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EADS bows out of Air Force tanker competition, will not protest selection of Boeing

The Air Force has awarded a $35 billion contract to build the next generation of air refueling tankers to Boeing Co. (Feb. 24)

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By Marjorie Censer
Capital Business Staff Writer
Friday, March 4, 2011; 7:19 PM

European Aeronautic Defense and Space said Friday it will not protest the Air Force's $35 billion award to Boeing to build the next-generation aerial refueling tanker, allowing one of the most contentious Pentagon acquisition programs to move forward.

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The company said in a statement that it remains disappointed by the outcome but does not want to further delay the program.

EADS said Friday that it lowered its bid, but its price remained higher than that of Boeing. "We're frankly of the view that, in the end, the tanker with the greatest capability wasn't selected," Ralph D. Crosby Jr., chairman at EADS North America, said in a conference call.

The Air Force acknowledged EADS's announcement in a statement.

"This source selection involved two world-class companies, with long-standing relationships with the Department, that we expect will continue," the service said.

The Air Force last month announced that Boeing had won the contract and said the first 18 of 179 planes would be delivered by 2017.

EADS's announcement ends a long effort to award the tanker contract. In 2003, the Air Force planned to lease tankers from Boeing, but the deal was canceled after a procurement scandal that sent a Boeing executive and a Pentagon official to jail. In 2008, the Air Force awarded the contract to Northrop Grumman, partnering with EADS, but the decision was overturned after the Government Accountability Office backed Boeing's protest.

Northrop Grumman backed out, and EADS opted to bid alone this time.

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