Boeing likely to face "uphill battle"

Boeing will have a tough time convincing the government to overturn the U.S. Air Force award of a $40 billion refueling tanker contract to a rival, an executive said.

"We know it's an uphill battle, no doubt," Mark McGraw, Boeing's vice president and manager of its tanker program, said on a conference call Tuesday. "But it's not like we had to search for reasons to protest. There was a large menu to pick from. There were lots of flaws in the process, and I think we'll end up winning the day in terms of the protest."

Boeing lost the 179-plane contract on Feb. 29 to rival Northrop Grumman and its partner — Airbus parent European Aeronautic, Defence & Space (EADS) — and protested the decision March 11. Boeing and Northrop in news conferences Tuesday disputed one of the central issues in the protest: whether the Air Force changed the rules midstream to favor Northrop.

The Air Force contrived "to create the possibility of competition" between Boeing's 767 aircraft and the Northrop team's A330, Boeing said in its protest to the Government Accountability Office (GAO). Boeing, which has supplied the Air Force with tankers since 1956, released a summary of the protest Tuesday. The GAO, the investigative arm of Congress, has 100 days from the protest's filing to hand down a decision.

The Air Force faced "continuing pressure from Capitol Hill" to let Northrop-EADS compete for the contract, the Boeing protest said. The Air Force made changes to the bid requirements to accommodate Northrop-EADS and "this distortion of the procurement process" led to Northrop winning the contract.

Not so, said Paul Meyer, Northrop Grumman's vice president for the tanker program.

"I'm shocked at the assertion," he said on a conference call. "All sides had an opportunity to correct for the record any deficiencies they saw in the proposal process. Nothing was changed from the time" the request for the proposal was released.

In response to Boeing's claim that Northrop threatened to walk out of the competition if the Air Force didn't alter requirements, Meyer said, "we didn't threaten to withdraw but voiced our concerns with the Air Force before the final" bid request was released.

Boeing in its protest said the competitors "were assigned virtually identical ratings" in five categories used by the Air Force.

Northrop's Meyer said "at the summary level, if you look at the chart it would appear that" the two companies "are pretty close." However, details provided by the Air Force in briefings to Northrop "clearly show in four out of five criteria we won hands down."

Boeing said it would have offered its 777 aircraft as the basis for the tanker had the company known the Air Force wanted a larger plane, McGraw said.

The Air Force's bid requirements "didn't set size requirements but asked for a range of aircraft all the way up to and including the 777 platform," Northrop spokesman Randy Belote said in an interview. "For EADS, that included the A330 and A340 platforms."

The Air Force is "carefully" considering the protest and will present its position to the GAO after the agency completes its evaluation, Air Force spokeswoman Lieutenant Colonel Jennifer Cassidy said. in an e-mail.