Boeing becomes sole bidder in tanker contract after Northrop quits

The government planned to change the deteriorating conditions of the planes used for refueling military aircraft midflight. However, controversies don't seem to end here as the government decides to build 179 new tankers.

Defense giant Northrop Grumman said that it quit from the biggest contracts of Pentagon to build arrival refueling tankers for Air Force. It alleges that the proposal favors its rival, Boeing’s 767 smaller planes than Airbus A330. Airbus is owned by Paris based European Aeronautic Defense and Space (EADS) company.

In a nearly decade long fight, this was the latest step taken by the defense giant.

Controversial contract of Pentagon
In the Pentagon contract, Northrop Grumman and its partner Airbus, competed against Boeing.

Due to ethics scandal, Boeing lost the deal in 2004. In 2008, the contract was won by Northrop but Boeing fought and the contract was cancelled.

In September 2009, Pentagon again made a bid for the deal. But in December, Northrop admonished that it would quit if Air Force did not change the proposal. It even alleged that the proposal favored Boeing’s 767 smaller planes than Grumman’s larger airbus A330.

But Pentagon declared the proposal as fair and apt.

Mixed response from officials
Airbus Chief Executive Tom Enders told Reuters, “I leave the political assessment to others. For me it is clear, however, that under the current conditions a bid makes no economic sense for Airbus. With our partner Northrop Grumman being convinced that in the current environment we stand no chance of winning, no matter how good our offer is, than I can only follow this assessment.”

He even told “I trust they know what the current rules of the game are and what is possible in America and what isn't.”

Deputy Secretary of Defense, William Lynn, told The Washington Post “Pentagon was disappointed that Northrop had pulled out of the competition, noting that it competed well on both price and other factors.”

Consequences of quitting
The Defense giant decision to quit has made the international competitor out of the U.S. market. After Northrop’s quit, its stock decreased to $64.16 in the New York stock exchange.

Northrop’s winning would have generated numerous jobs in Britain, France, Germany and Spain.

Some Defense analysts and other officials claim that Northrop’s refusal has made Boeing as hopeful winner for the tanker contract.