Apr 11 2007

Northrop submits tanker bid

Mobile Press Register

By GEORGE TALBOT

Northrop Grumman Corp. said Tuesday it submitted its bid for a U.S. Air Force contract to build a new fleet of aerial refueling tankers, a project that could bring a 1,000-1,500-worker aircraft assembly plant to Mobile's Brookley Field Industrial Complex.

Los Angeles-based Northrop said its proposed KC-30 tanker "meets or exceeds the Air Force requirements ... far better than any competitor." The company is expected to be challenged by Chicago-based Boeing Co., which is offering a tanker based on its 767 commercial jet. Final bids are due Friday, according to the Air Force.

Northrop said its bid was 2½ years in the making and that it included input from more than 300 team members, including EADS North America Inc., its chief subcontractor, and General Electric Co., which will supply the KC-30's engines.

The Northrop team is pitching its KC-30, based on an Airbus A330 commercial jet, as a more versatile aircraft than Boeing's KC-767, a smaller plane that is more specialized as a refueler.

"The competition ... is as much a competition of vision as it is of aircraft," said Scott J. Seymour, corporate vice president and president of Northrop's Integrated Systems division. "The KC-30 tanker will provide our Air Force leaders and combatant commanders everything they have asked for in air-to-air refueling and more. More refueling capacity, more versatility against an uncertain future; more capability and more value per aircraft."

The Air Force wants the new tankers to replace its aging fleet of more than 500 KC-135 tankers, which average nearly 50 years in service. Air Force officials have said the tanker acquisition program is their top priority this year, and that they expect to pick a winner for the first phase of the replacement in October. The initial contract for 179 new tankers is estimated at $40 billion.

Northrop said the KC-30 can carry greater quantities of troops and cargo than the KC-767, and 45,000 pounds more fuel than the KC-135. The added size and capability means that 179 of the KC-30s would essentially replace 289 of the KC-135s, according to Northrop officials.

Still, analysts speculated that Boeing, which would assemble its tankers in Everett, Wash., and modify them for military use in Wichita, Kan., remains the favorite to win the work. Boeing declined to comment on Northrop's announcement Tuesday, but was expected to submit its own bid today.

"However this competition turns out, Northrop has done the Air Force a big favor by forcing them to rethink how they use their refuelers," said Loren Thompson, a defense analyst for the Lexington Institute.

Boeing four years ago won a $23.5 billion contract to lease 100 of its KC-767s to the Air Force, but the deal collapsed in scandal when it was revealed that a top Air Force acquisitions official conspired with the company to inflate the purchase price.

Northrop's bid proposal was so massive it was measured in pounds, not pages -- it was delivered on three shipping pallets, according to company officials. The time and expense to prepare the document "is an indication of how carefully they've studied this proposal. They wouldn't be bidding if they weren't convinced they could win," said U.S. Sen. Jeff Sessions, R-Mobile.

Other Alabama political leaders said they were pleased to see the competition moving forward.

"I believe an objective review of the choices by the Air Force will find the Northrop Grumman tanker offering both the best value and the most flexibility for the future," said U.S. Rep. Jo Bonner, R-Mobile.

Sen. Richard Shelby, R-Tuscaloosa, said the Air Force is under pressure to run a clean contest and choose the best airplane at the best price to taxpayers.

"The new tanker needs to meet the challenges we face today, but it also needs to confront the challenges we will face 30 years from now," Shelby said, adding that the KC-30 "has the flexibility to do just that by being a multi-mission aircraft with the ability to provide both air refueling and cargo capabilities."