Northrop may drop out of tanker bidding

Northrop Grumman has warned it won't bid for the massive Air Force refueling tanker program unless the Pentagon's draft request for proposals is rewritten.

Northrop CEO Wes Bush wrote to Pentagon acquisition chief Ashton Carter on Tuesday that since the Pentagon has declined to alter the request for proposals (RFP), "I must regrettably inform you that, absent a responsive set of changes in the final RFP, Northrop Grumman has determined that it cannot submit a bid."

Northrop and Airbus parent European Aeronautic Defence & Space (EADS) are teamed against Boeing in competing for the on-again, off-again contract, and they've offered a modified Airbus A330 that would be assembled in Alabama.

Boeing has said it would use either a 767, as it previously proposed, or a 777.

Northrop's letter says the Pentagon's responses to complaints that the RFP is tilted in favor of Boeing "suggest that the department is not planning to substantially address our concerns in the final release of the RFP."

The company said the draft RFP contains a "clear preference" for a smaller aircraft "with limited multirole capability," and is structured in a way that "places contractual and financial burdens on the company that we simply cannot accept," according to a copy of the letter provided by Northrop.

Without changes in the draft RFP, which is due to be finalized shortly, "Northrop Grumman cannot proceed to submit a bid to the Department," CEO Bush wrote.

Bloomberg News quoted an e-mail from Pentagon spokesman Bryan Whitman stating that "the Department regrets that Northrop Grumman and Airbus have taken themselves out of the tanker competition and hope they will return when the final request for proposals is issued."