WASHINGTON (AFP) — Boeing on Tuesday officially challenged a US Air Force decision to award a huge aerial refueling tanker contract to Northrop Grumman and Europe's EADS, a move that temporarily freezes the deal.
The Boeing Company said it had filed the protest with the Government Accountability Office (GAO), asking the investigative arm of the US Congress to review the decision on the estimated 35-billion-dollar contract.
"Our analysis of the data presented by the air force shows that this competition was seriously flawed and resulted in the selection of the wrong airplane for the warfighter," Mark McGraw, vice president and program manager, Boeing Tanker Programs, said in a statement.
The filing of the protest suspends the contract and starts a 100-day period for the GAO to announce its finding on the matter.
"We'd love to get the decision overturned," McGraw said in a teleconference. "Obviously, we want some clarity in the process."
"It is the company's right to formally submit a protest," the US Air Force said in a statement, adding that it would "carefully evaluate (it), defend our source selection decision and allow the GAO to make its final decision."
On February 29, the contract to build up to 179 military refueling planes was awarded to Northrop Grumman Corporation and the European Aeronautic Defence and Space Company (EADS), parent of Airbus, Boeing's arch-rival in commercial aircraft.
The new air refueling tanker, dubbed the KC-45, will replace the air force's fleet of aging Boeing KC-135 tankers.
It was a stunning upset for Boeing, until now the sole supplier of air refueling planes to the US military.
The contract is for the initial phase of a fleet replacement project worth some 100 billion dollars over the next 30 years.
The award of the contract raised a furor among Boeing backers in the US Congress who charge that it will cost US jobs, and that the requirements were changed in a way that favored the larger Airbus plane.
The air force said both offers "were evaluated thoroughly ... The proposal from the winning offeror is the one the Air Force believes will provide the best value to the American taxpayer and to the warfighter."
The challenge carries long odds of succeeding -- and a risk of backfiring, analysts warned.
The GAO sided with only 27 percent of the 1,411 protests of contract decisions filed last year, data show.
Of those cases the GAO sent back to government procurement officials for further review, only 38 percent ultimately resulted in the protester gaining some form of relief.
A GAO rejection of Boeing's protest would make it difficult for Boeing supporters in Congress to push ahead with legislation pressuring the air force to revisit its decision or split the contract.
Investors on Tuesday punished Boeing shares, sending them down 1.3 percent to 73.40 dollars. Northrop Grumman shares rose 1.65 percent to 79.68.
Richard Safran, a Goldman Sachs analysts, noted the contract delay could well exceed 100 days.
"If the GAO sustains Boeing's protest, the air force could be forced to either re-evaluate the award or re-bid the contract, delaying an award by nine to 18 months," he said.
Reacting to Boeing's filing of the challenge, EADS chief executive Louis Gallois said the process was "exceptionally transparent, professional and fair."
He added that prime contractor Northrop Grumman was in charge of the legal aspects of the matter.
Separately, Northrop Grumman announced it had doubled its estimate of the jobs the contract would directly or indirectly create in the United States to 48,000, up from 25,000 initially predicted.
Norman Dicks, a Democratic US representative of Washington state, where Boeing has assembly operations, accused the air force of unfairly changing the evaluation criteria of the project mid-stream.
The changes were "made to advantage Airbus so they could compete. They could not even have competed if those changes had not been made in the criteria," Dicks said.
In May 2003, a similar tanker contract was awarded to Boeing, but it was annulled under allegations of procurement fraud, for which Boeing paid a record 615-million-dollar settlement to the US government.
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