Tanker bidding cancelled

Remember all the hoo-ha between Boeing and Northrop over that $40 billion tanker refueling contract? Well, the Pentagon is calling off the bidding because officials don't think they can pick a winner before the next president takes office. It's considered a victory for Boeing, which lost the initial competition to L.A.-based Northrop and the parent company of Europe's Airbus. Boeing appealed the decision and government auditors found flaws in the awarding process. That led to a new round of bidding. From the WSJ:

According to a draft Pentagon document, Defense Secretary Robert Gates said he believed it was time for a "cooling off" period. Over the past few weeks, Mr. Gates concluded that the competition had become too emotionally charged and compressed to rush. The decision will now be made under the next presidential administration, virtually guaranteeing that one of the most controversial defense acquisitions of the Bush administration continues for the foreseeable future.

For now, the Air Force will keep using the current fleet of Boeing-made tankers. Here are stories from Bloomberg and AP.


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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
 
Mark Lacter, business writer and editor was 59
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