Boeing protest over tanker moves forward

Boeing, the loser in a $40 billion U.S. Air Force aerial-tanker competition won by Northrop Grumman, will be allowed to pursue its protest of the contest after a ruling by a federal agency.

The Government Accountability Office (GAO) rejected motions by Northrop and the Air Force to toss out parts of Boeing's complaint, spokesmen for the military service and the companies said Wednesday. The GAO declined to comment.

"The GAO denied the Air Force's request to dismiss some of Boeing's protest as untimely," Maj. Linda Pepin, a spokeswoman for the service, said in a statement. "As a result, the Air Force better understands the protest issues. The Air Force is satisfied with this result."

Los Angeles-based Northrop and Boeing have battled each other through the media and congressional hearings since the Air Force's Feb. 29 decision and Boeing's March 11 protest. The GAO has until mid-June to issue a final ruling.

The offensives continued Wednesday, with Northrop saying the GAO acted only after Boeing narrowed the complaint. Boeing denied it had backed off.

"We are encouraged that the company has streamlined its approach," Northrop spokesman Randy Belote said of Boeing in an e-mailed statement Wednesday. "We remain convinced that the Air Force process that led to Northrop Grumman's selection was fair, open and transparent."

He declined to elaborate on his statement that Boeing had scaled back the complaint.

"We haven't narrowed anything," Boeing spokesman Bill Barksdale said. "As a matter of fact, our case gets stronger the more information we see.'

GAO spokesman Chuck Young said the agency won't comment on whether Boeing narrowed its protest or confirm the Air Force and Northrop motions were turned down.

Northrop and Airbus parent European Aeronautic Defence & Space won the 179-plane program using an entry modeled after the Airbus A330 commercial jetliner.

Boeing's bid was based on its 767 commercial plane. Boeing says the Air Force made decisions that unfairly put its smaller entry at a disadvantage.

Northrop had sought to dismiss most of Boeing's protest on grounds that the issues raised were "untimely" and should have been questioned before Boeing bid.

Boeing has filed two supplemental protests since its original one.

Both companies "offered fair and reasonable prices" and "a reasonable business arrangement," according to Air Force documents on selection criteria reported by Bloomberg News on March 20. Northrop was deemed "more advantageous in mission capability" and "in key system requirements" and "program management," the documents said.

The service determined it would require 22 fewer Northrop tankers to meet certain combat scenarios than if it used the smaller Boeing jet, the documents said.

Information from Bloomberg News reporters Gopal Ratnam and Tony Capaccio is included in this report.