Northrop opts out of tanker bid

Northrop Grumman has decided not to submit a bid to the Department of Defense to build the US Air Force’s next generation of aerial refuelling tankers, a move that means Boeing is the contender likely to win the contract.

Northrop Grumman said that it decided not to proceed after it emerged that the source selection methodology now favoured Boeing’s smaller refuelling tanker.

’We continue to believe that Northrop Grumman’s tanker represents the best value for the military and taxpayer – a belief supported by the selection of the A330 tanker design over the Boeing design in the last five consecutive tanker competitions around the globe. Regrettably, this means that the US Air Force will be operating a less-capable tanker than many of our allies in this vital mission area,’ said Wes Bush, chief executive officer and president of Northrop Grumman.

The European Commission noted the decision with interest. ’It is highly regrettable that a major potential supplier would feel unable to bid for a contract of this type. Open procurement markets guarantee better competition and better value for money for the taxpayer,’ said commissioner Karel De Gucht.

In February 2008, Northrop Grumman and EADS were selected and awarded the contract to provide aerial refuelling tankers for the US Air Force in a fair and transparent competition. The award was subsequently cancelled at the end of 2008.

The European Commissioner said that he would be extremely concerned if it were to emerge that the terms of tender were such as to inhibit open competition for the contract.

Nevertheless, Northrop Grumman will not protest the decision. ’While we feel we have substantial grounds to support a court ruling to overturn this revised source selection process, America’s service men and women have been forced to wait too long for new tankers. We feel a deep responsibility to their safety and to their ability to fulfil the missions our nation calls upon them to perform. Taking actions that would further delay the introduction of this urgent capability would also not be acting responsibly,’ said Bush.

The US defence trade balance with the EU has traditionally been significantly in favour of the US. In 2008 the US exported $5bn (£3.3bn) and imported only $2.2bn worth of defence material, in line with a historic ratio of double exports to imports.