Boeing might not bid for tanker contract
The Defense Department changed the rules for landing a $35 million contract to build an aerial refueling tanker, and now, word is that Boeing won't bid. John Dimsdale reports.
The Boeing logo on the company's corporate world headquarters building in Chicago, Ill. (Photo by Scott Olson/Getty Images)
More on Mergers/Acquisitions, Airline Industry
TEXT OF STORY
Kai Ryssdal: Boeing has let it be known it's none too happy with some new Defense Department rules. The airplane maker's not denying reports out today that it's going to take a pass on bidding on a $35 billion contract for some new aerial-refueling tankers for the Air Force. Our Washington bureau chief John Dimsdale reports.
John Dimsdale: Citing sources familiar with Boeing's internal discussions, Aviation Week reports the aircraft maker is "strongly considering" sitting out the next round of bidding for the contract, even after Boeing was able to get the Air Force to re-open bids when competitor Airbus won the first round. Late last week, the Defense Department proposed guidelines for new bids. And to Boeing's dismay, the Pentagon is giving extra points for a bigger tanker plane, which Airbus has. Loren Thompson follows the long-running contract fight for the Lexington Institute.
Loren Thompson: Boeing's proposal was prepared for the first round of competition when there was no additional scoring for the bigger plane. And now it doesn't have time to change its proposal.
Boeing would not confirm or deny the options the company is considering. By maintaining the speculation that it might not submit another bid, Boeing is trying to put political pressure on the Defense Department, says aircraft industry analyst Richard Aboulafia.
Richard Aboulafia: There's an aspect of this that is probably somewhat passive-aggressive, basically hoping to get their political allies to go to bat for them and introduce language that makes this, in their mind, more of a level playing field.
Boeing's congressional allies are trying to withhold funding for new tankers until Boeing has a chance to re-work its design. But Airbus has its own political supporters, and Congress is unlikely to act before the end of the year when the Pentagon hopes to announce the final contract winner.
In Washington, I'm John Dimsdale for Marketplace.
Comments
Comment | Refresh
Post a Comment: Please be civil, brief and relevant.
Email addresses are never displayed, but they are required to confirm your comments. All comments are moderated. Marketplace reserves the right to edit any comments on this site and to read them on the air if they are extra-interesting. Please read the Comment Guidelines before posting.
You must be 13 or over to submit information to American Public Media. The information entered into this form will not be used to send unsolicited email and will not be sold to a third party. For more information see Terms and Conditions and Privacy Policy.