Northrop Grumman to end bid for fuel tanker contract
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After fighting for nearly a decade to win one the largest military contracts in U.S. history, Northrop Grumman Corp. is expected to announce late Monday that it is dropping out of the competition to replace the aging Air Force fleet of Eisenhower-era aerial refueling tankers.
The Century City company, which is teamed with Airbus parent European Aeronautic Defense & Space Co., has in recent weeks complained that the odds are stacked against its bid for the contract, potentially worth about $35 billion.
Northrop was pitted against Chicago-based Boeing Co. to replace the tankers, which refuel warplanes in flight, in a competition that first started in 2001.
The announcement of the decision is expected after the market closes, according to a source familiar with the Northrop’s deliberations on the matter.
It was unclear how the move would affect the competition, which has been marred by delays and controversy. The Pentagon has had to cancel contracts twice, first won by Boeing and then by Northrop. The latest requirements for the third attempt were released Feb. 24.
Northrop had been threatening to pull out of the latest contest, saying that the Air Force wrote specifications that favor its rival, Boeing. Northrop officials said that the so-called Request for Proposal, which outlines the terms for the tanker and how contenders would be judged, call for a smaller aircraft that Boeing is offering.
Northrop won the previous competition in 2007 with a modified Airbus A330 because of the plane’s ability to haul more fuel, cargo and troops and carry out more medical evacuations.
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