The European Aeronautic Defense and Space Company (EADS) recently informed the Defense Department of its intent to bid for a contract to build a replacement fleet for the Air Force’s aging KC-135 tanker aircraft, company executives announced during a press conference.
The move comes just six weeks after EADS’s partner in two prior rounds of bidding for the contract, Northrop Grumman [NOC], dropped out of the contest. Northrop Grumman alleged that the Pentagon’s latest request for proposals favored rival Boeing‘s [BA] smaller 767-based tanker over the A330 Airbus-based EADS offering.
Company executives said that EADS would bid for the work as a prime contractor without a major U.S. subcontractor–at least for now. EADS North America CEO Sean O’Keefe said the company has already lined up a base of over 200 U.S. companies to feed its supply chain and could at some future date partner with a major subcontractor.
EADS last month began lobbying the Pentagon for a 90-day extension to the deadline for bid submissions. Defense Department officials instead granted a 60-day extension–to July 9–pending EADS’ formal notification of intent to compete.
Ralph Crosby, EADS North America chairman, expressed confidence that his company can win the contract, which Pentagon officials have estimated to be worth up to $50 million initially, with more potential work in the future as the Air Force eventually phases out its KC-10 fleet as well.
Boeing’s congressional supporters criticized EADS’ reentry into the competition.
“For years, Airbus has gone to any length to gain U.S. market share and undercut American workers,” Sen. Patty Murray (D-Wash.) said in a press statement. “Today’s announcement is a reminder that they will go it alone in that pursuit if necessary.”
EADS backers in Congress, primarily from Alabama and Mississippi, hailed the announcement.
“A sole-sourced contract would have served only Boeing’s interest,” said Senator Richard Shelby (R-Ala.). “The presence of a competitor better serves the interest of our warfighters and American taxpayers.”
EADS plans to build its commercial freight aircraft in Mobile, Ala., on the same assembly line where it would potentially assemble the Air Force tankers.
Crosby said the company would build its first three tankers in Spain–where it is manufacturing tankers for five other countries–until the Mobile facility is up and running.
Meanwhile, a Defense Department official speaking on the condition of anonymity confirmed that the Pentagon has agreed to waive a defense acquisition rule that limits a foreign company’s ability to provide classified communications equipment for U.S. weapons (Defense Daily, April 20). The department is expected to make an announcement about the “technical changes” to the formal bid solicitation later this week, according to the source.
Air Force officials have said they plan to award a contract for an initial 179 tankers this summer