Boeing on Wednesday defended the Pentagon’s
bidding process for the controversial $35 billion tanker contract, saying
it did not favor the Chicago-based company.
Company officials were surprised when
Boeing’s only rival for the contract, Northrop Grumman and EADS North
America, pulled out of the competition on Monday, said Tim Keating,
Boeing’s senior vice president for government operations.
“It's just not the case that it
[the bidding process] tilted toward one side or the other,” Keating
The request for bids the Pentagon
issued almost two weeks ago favored neither competitor, he insisted.
Northrop Grumman blamed the Pentagon
bidding process when it pulled out this week. It said the process favored
the smaller refueling aircraft offered by Boeing, meaning the Northrop-EADS
team had little chance to win the contract even if it spent millions
on the competition.
The decision leaves Boeing as the
only bidder, and Boeing officials are already working to dispel any
perceptions that the company would take advantage of the situation.
“We remain in a competitive situation,”
Keating said Wednesday. “There is a contract we have to win. We have
not won it yet.”
Sources said the Pentagon had been
prepared for a scenario in which one of the competitors bowed out, but
it is unclear how the Pentagon will proceed.
The Pentagon can keep the request
for proposals on the current schedule, with the bids due May 10. The
Pentagon can also choose to truncate the request for proposals process
by sending out letters of intent to go to a sole source.
Boeing has repeatedly argued the contract
will create jobs at a time of high unemployment.
On Wednesday, a report commissioned
by Boeing found a Boeing-built tanker would create 10 times as many
new U.S. jobs as the one that Northrop and EADS would have built.
The study was released by Sonecon
LLC, a private consultancy headed by Robert Shapiro, a U.S. undersecretary
of commerce for economic affairs from 1997 to 2001.
Specifically, Shapiro’s study found
that Boeing would create between 62,605 and 70,706 new U.S. jobs over
the life of the contract. By contrast, the Northrop-EADS tanker would
have led to the creation of up to 7,080 new U.S. jobs, according to
The study was done before Northrop
announced its withdrawal.
The disparity in job numbers was attributed
to a higher level of investment in U.S. plants, property and equipment
by Boeing than by Northrop-EADS. The Shapiro study assumes that EADS,
the European consortium behind Airbus, would be the primary company
in the Northrop-EADS partnership for the tanker.
Northrop and EADS have long argued that they rely heavily on U.S. manufacturing and that their bid would lead to more than 48,000 direct and indirect jobs in the United States.
Silla Brush contributed to this article.