Boeing gets $35 billion Air Force tanker order

By DONNA CASSATA, LOLITA C. BALDOR
The Associated Press

WASHINGTON — The Air Force said Thursday it has awarded Chicago-based Boeing Co. a $35 billion contract to build the next generation of airborne refueling tankers. The decision is a major blow to the European aviation giant the European Aeronautic Defence and Space Co.

The decision probably will end a decade-long cross-Atlantic struggle to replace the Air Force's fleet of 1950s-era air tankers.

"What we can tell you was that Boeing was a clear winner," said Deputy Defense Secretary William Lynn in announcing the decision at the Pentagon.

The announcement was a surprise as defense analysts and even some lawmakers had expected EADS to be awarded the contract. It also was a blow to the southern state of Alabama, which had been counting on EADS to assemble the aircraft at a long-shuttered military base in Mobile.

Production of the tankers will occur in Everett, Washington, Wichita, Kansas, and dozens of other states where hundreds of jobs will be created. Boeing has said the contract will create some 50,000 jobs.

Lawmakers who have lobbied for the contract were gleeful over the news.

"I'm in the middle of a blizzard, but it's all blue skies," said Kansas Sen. Pat Roberts.

Replacing the 1950s-era KC-135 planes — the equivalent of a flying gas station — is crucial for the military. Pilots who were not even born when the last aircraft was delivered in 1965 are operating air tankers that the Pentagon is struggling to keep in flying shape.

The refueling tankers allow jet fighters, supply planes and other aircraft to cover long distances, critical with fewer overseas bases and operations far from the United States in places like Iraq and Afghanistan.

The $35 billion contract calls for producing 179 new tankers. Boeing would base the tanker on its model 767 aircraft.

The amount could end up being a first installment on a $100 billion deal if the Air Force should decide to buy more aircraft.

Through the years, the Air Force's efforts to award the contract have been undone by Pentagon bungling and the criminal conviction of a top Defense Department official.

Initially, the Air Force had planned to lease and buy Boeing planes to serve as tankers, but that fell through. The Air Force later awarded a contract to Northrop and EADS, but in 2008 the Government Accountability Office upheld Boeing's protest of the contract.

The GAO said it found "a number of significant errors" in the Air Force's decision, including its failure to fairly judge the relative merits of each proposal.

The Air Force reopened the bidding in 2010 only to be embarrassed again as it mistakenly gave Boeing and EADS sensitive information that contained each other's confidential bids.

The contract has generated some of the fiercest and costliest lobbying in Washington. The two companies have spent millions on advertising, including radio and subway ads in the nation's capital, and hired dozens of lobbyists.

In the past year, Boeing has spent $5 million on print advertising to promote its version of the tanker, while EADS has shelled out $1.7 million to boost its prototype, according to Evan Tracey, president of the Campaign Media Analysis Group, which typically monitors advertising for political campaigns.

Can you see Rahm Emanuel's paw prints all over this deal? Here's hoping it truly is a win for job seeking Americans.