Air Force gets OK to resume purchase of refueling planes

The Pentagon said Monday it has given the Air Force authority toresume a program for buying aerial-refueling planes that has been onhold since 2004.

The announcement directs the Air Force to start a competition thatis expected to pit Chicago-based Boeing Co. against a team ofNorthrop Grumman Corp. and the parent of European jet maker AirbusSAS.

A contract for the multibillion-dollar project -- which Boeing hasheld for decades -- could be awarded as soon as next year.

Boeing lost the tanker deal in 2004 amid revelations that it hadhired a top Air Force acquisitions official who had given the companypreferential treatment.

The deal would have allowed the Air Force to buy or lease 100Boeing 767 planes for use as tankers, but Congress killed it. The AirForce had said for more than a year that it probably would reopen thedeal to competition.

Under Monday's announcement, a request for information is expectedto be issued by the end of April, with a draft request for proposalexpected this fall and a final proposal due in January.

The contract is expected to be awarded in the summer of 2007, thePentagon said.

Pentagon officials have said they are aware a new tanker programwill face close scrutiny because of the scandal.

"We must ensure that this program models a traditional competitiveacquisition program, and that every step proceeds in a deliberate andtransparent fashion," Air Force Secretary Michael Wynne said.

Earlier this year, a report for the Air Force determined thatthere are a number of medium to large commercial-based aircraft thatcan meet the tanker program's needs to refuel planes in flight.

The report, conducted by the Rand Corp., said commercial planesbuilt by Boeing and Airbus are the most cost-effective candidates forconversion to aerial-refueling tankers.

Acceptable aircraft include the Boeing 747, 767, 777 and 787, andthe Airbus 330 and 340, the report said.

The report recommended that the Pentagon weigh other factorsbesides economics to determine how quickly to solicit bids.

The European Aeronautic Defence and Space Co., which owns 80percent of Airbus, has said it plans to team with Los Angeles-basedNorthrop Grumman to produce a new generation of refueling tankers.The contract could be worth at least $20 billion.

A spokeswoman for Boeing said the company was pleased the processwas moving forward.

"We feel confident that we will be ready for the competition. Welook forward to it," said spokeswoman Kerry Gildea.