Northrop Grumman beat rival Boeing to win a major $3.8 billion (R29 billion) contract to maintain and service the US Air Force’s fleet of KC-10 refuelling tankers, the Pentagon said.
Boeing holds the current contract for servicing the aircraft, which expires in January, and has provided support for the KC-10s for more than a decade.
Boeing said it was disappointed by the Pentagon’s decision.
“We presented a competitive proposal that leveraged Boeing’s tremendous experience from over 80 years of building and maintaining tankers as well as inventing boom technology,” Boeing spokesperson Forrest Gossett said.
“We now need to review the Air Force’s selection decision and process before deciding on our next course of action.”
Large Pentagon contracts are often appealed to the US Government Accountability Office, the audit arm of Congress.
The Air Force had planned to award the contract in June 2008, but a decision was delayed because bidders submitted insufficient cost and pricing data.
“This is a stunning upset,” said defence analyst Loren Thompson with the Virginia-based Lexington Institute. Boeing has been servicing this plane since it was first introduced, Thompson said, adding “so for Boeing to lose to Northrop is truly amazing.”
Northrop, with its European partner, Airbus-maker EADS, is also in a battle with Boeing to win a contract to supply at least 179 new tankers to the Air Force, work that could be worth up to $50 billion (R387 billion).
The Air Force’s oldest tankers are the KC-135s, some of which are 50 years old.
The Air Force’s refuelling fleet includes nearly 60 KC-10s, which were purchased in the 1970s and are modified DC-10 aircraft made by McDonnell Douglas, which was bought by Boeing in 1997.
Pic: Northrop Grumman logo